Chargeback Reason Codes

Understanding chargeback reason codes is essential for subscription businesses and e-commerce merchants who want to minimize revenue loss and maintain healthy payment processing relationships. Each card network defines hundreds of codes representing very specific reasons for dispute claims, many of which overlap across all networks, but the key to effective chargeback management lies in recognizing patterns and implementing data-driven prevention strategies.

Understanding chargeback reason codes is essential for subscription businesses and e-commerce merchants who want to minimize revenue loss and maintain healthy payment processing relationships. Each card network defines hundreds of codes representing very specific reasons for dispute claims, many of which overlap across all networks, but the key to effective chargeback management lies in recognizing patterns and implementing data-driven prevention strategies.

Chargeback reason codes serve as the foundational language of the payment dispute ecosystem, providing merchants with critical intelligence about why customers are challenging transactions. These alphanumeric identifiers, ranging from simple two-digit numbers to complex letter-number combinations, represent more than just administrative categorization—they reveal underlying patterns in customer behavior, operational weaknesses, and market dynamics that can significantly impact business profitability. For subscription businesses operating in today’s competitive landscape, understanding these codes transcends basic compliance; it becomes a strategic advantage for building resilient recurring revenue models.

The financial implications of chargebacks extend far beyond the immediate disputed amount. Industry research indicates that each chargeback typically costs merchants between 2.5 to 4 times the original transaction value when accounting for chargeback fees, operational costs, inventory loss, and administrative overhead. For subscription businesses, these costs are compounded by the potential loss of customer lifetime value and the complex challenge of recovering recurring revenue streams once customer relationships are damaged.

Cards

Visa Chargeback Reason Codes

Visa is the world’s largest card network and therefore the one merchants will be dealing with most often, both when accepting payments and when those payments turn into chargebacks. For subscription businesses, Visa’s streamlined reason code system under the Visa Claims Resolution (VCR) initiative is particularly important to understand.

The VCR system categorizes all Visa reason codes into four clear categories, making it easier for merchants to quickly identify the dispute type and implement appropriate response strategies. This is especially valuable for subscription businesses that process recurring transactions and need to identify patterns in dispute behavior.

Fraud

Description
 EMV Liability Shift Counterfeit Fraud

Time Limit (Issuer/Cardholder)
 120 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder has a chip card and someone made a counterfeit copy of it
  • You processed a transaction with the counterfeit card on a terminal that wasn’t EMV-compliant
  • The transaction should have used chip reading technology that would have detected the fraud
  • Liability shifted to merchant due to improper EMV processing

Transaction Modifiers

  • EMV Liability Shift Counterfeit Fraud

Prevention Steps

  • Only use EMV-compliant terminals and keep them updated
  • Always use the correct cardholder verification method—signature, PIN, etc.
  • Create an electronic or manual imprint for every card-present transaction
  • Train staff to always attempt chip reading before falling back to swipe

Description
 EMV Liability Shift Non-Counterfeit Fraud

Time Limit (Issuer/Cardholder)
 120 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder has a PIN-preferring chip card, but you didn’t use a chip-reading device to process the transaction
  • You used a chip-reading device that wasn’t PIN compliant
  • The cardholder claims the purchase was unauthorized

Transaction Modifiers

  • EMV Liability Shift Non-Counterfeit Fraud

Prevention Steps

  • Only use EMV-compliant terminals
  • Always use the correct cardholder verification method—signature, PIN, etc.
  • Create an electronic or manual imprint for every card-present transaction
  • Train staff on proper chip transaction procedures

Description
 Other Fraud: Card-Present Environment/Condition

Time Limit (Issuer/Cardholder)
 120 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims the transaction was unauthorized and it was either a key-entered or unattended transaction
  • Card was manually entered without proper verification procedures
  • Fraudulent use of stolen card in physical environment

Transaction Modifiers

  • Other Fraud – Card Present Environment

Prevention Steps

  • Use fallback options—like manually entering transaction data—as a last resort
  • If you do perform a key-entered transaction, make a manual imprint of the card
  • Make sure you differentiate between card-absent and card-present transactions during clearing
  • Verify cardholder identity through proper ID checks

Description
 Other Fraud – Card-Absent Environment

Time Limit (Issuer/Cardholder)
 120 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims a card-not-present transaction was unauthorized
  • Account takeover resulting in unauthorized purchases
  • Identity theft with stolen card information
  • Family member disputes after discovering charges

Transaction Modifiers

  • Other Fraud – Card Absent Environment

Prevention Steps

  • Consider using all the tools available to you—including Visa Secure, card security code (CVV2), and Address Verification Service (AVS)
  • Use pre-sale fraud detection service providers that can help verify the cardholder’s identity
  • Use a billing descriptor that is easily recognized by the cardholder
  • Always submit an authorization request, no matter the transaction amount
  • Make sure you differentiate between card-absent and card-present transactions during clearing

Description
 Visa Fraud Monitoring Program

Time Limit (Issuer/Cardholder)
 120 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • Your business is enrolled in the Visa Fraud Monitoring Program and the issuer was allowed to dispute the fraudulent transaction
  • Merchant fraud rates exceeded Visa thresholds

Transaction Modifiers

  • Visa Fraud Monitoring Program

Prevention Steps

  • Monitor your fraud-to-transaction ratio and take necessary steps to prevent breaching thresholds established by Visa
  • Implement robust fraud detection and prevention tools
  • Review and improve authentication processes

Authorization

Description
 Card Recovery Bulletin

Time Limit (Issuer/Cardholder)
 75 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The transaction was above your floor limit, but you didn’t request authorization
  • Since the authorization process wasn’t used, you didn’t realize the account number was listed in the Card Recovery Bulletin
  • The transaction should have been terminated

Transaction Modifiers

  • Card Recovery Bulletin or Exception File

Prevention Steps

  • Always send an authorization request before processing a transaction if the amount is above your floor limit
  • Check the Card Recovery Bulletin if the transaction is below your floor limit
  • If you process transactions with multiple authorizations, make sure you fully understand Visa’s rules and regulations

Description
 Declined Authorization

Time Limit (Issuer/Cardholder)
 75 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • You received a Decline or Pickup authorization response, but chose to complete the transaction anyway
  • Multiple authorization attempts after initial decline

Transaction Modifiers

  • Declined Authorization

Prevention Steps

  • If you receive a Decline or Pickup authorization response, either terminate the transaction or submit a second authorization request
  • Never proceed without authorization
  • If you process transactions with multiple authorizations, make sure you fully understand Visa’s rules and regulations

Description
 No Authorization

Time Limit (Issuer/Cardholder)
 75 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The transaction was processed without any attempt to gain authorization
  • Authorization was requested after the fact or for a different amount

Transaction Modifiers

  • No Authorization

Prevention Steps

  • Always send an authorization request before processing a transaction if the amount is above your floor limit
  • If you process transactions with multiple authorizations, make sure you fully understand Visa’s rules and regulations

Processing Errors

Description
 Late Presentment

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant does not process a transaction in a timely manner; the account was no longer in good standing at the time of processing

Transaction Modifiers

  • Late Presentment

Prevention Steps

  • Make sure you send completed transactions to your payment processor within the timeframe specified in your merchant agreement
  • A good practice is to submit transactions on the day of the sale or as soon as possible

Description
 Incorrect Transaction Code

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant processed a debit instead of a credit, processed a credit instead of processing a reversal
  • In some other way processed a transaction that differed from the obtained authorization

Transaction Modifiers

  • Incorrect Transaction Code

Prevention Steps

  • Hold regular staff training sessions to ensure everyone on your team knows how to correctly process transactions, refunds, and adjustments

Description
 Incorrect Currency

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The transaction currency differs from the currency transmitted through Visa
  • The cardholder was not advised or did not agree that Dynamic Currency Conversion (DCC) would occur

Transaction Modifiers

  • Incorrect Currency

Prevention Steps

  • Don’t automatically apply Dynamic Currency Conversion (DCC) to transactions
  • Give customers the option to select the service if they are interested, but don’t require its use
  • Have systems in place to manage multiple currencies

Description
 Incorrect Account Number

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The transaction was processed to an incorrect account number
  • The adjustment was processed more than 45 days from transaction date
  • An adjustment was posted to a “closed” or “non-sufficient funds” account more than 10 days after the transaction date

Transaction Modifiers

  • Incorrect Transaction Account Number

Prevention Steps

  • Always request authorization before completing a transaction
  • If an authorization request is denied, stop the transaction and ask for an alternate form of payment
  • Always swipe or dip a card—only use fall-back options in emergency situations

Description
 Incorrect Amount

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims the transaction amount is incorrect
  • An error was made entering numbers manually; the amount of the transaction was changed without the cardholder’s consent

Transaction Modifiers

  • Incorrect Transaction Amount

Prevention Steps

  • Unless authorized, never change the amount of a completed transaction without the cardholder’s consent
  • Use caution when entering handwritten transaction information
  • Always swipe or dip a card—only use fall-back options in emergency situations

Description
 Duplicate Processing/Paid By Other Means

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant tries to submit multiple batches at one time; the transaction has multiple receipts
  • The transaction is duplicated in the merchant’s system
  • The transaction was processed but the cardholder paid for the same merchandise or service by other means

Transaction Modifiers

  • Duplicate Processing or Paid by Other Means

Prevention Steps

  • If you notice a duplicate transaction, issue a credit as soon as possible
  • Double check all transaction receipts before they are deposited
  • Only send batches one time
  • If the customer wants to change to a different form of payment after initially offering the payment card, be sure to void the charge

Description
 Invalid Data

Time Limit (Issuer/Cardholder)
 75 days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant submits an authorization request containing an incorrect transaction date, MCC, merchant or transaction type indicator, country or state code, or other required field

Transaction Modifiers

  • Invalid Data

Prevention Steps

  • Supply all necessary information with each authorization request, including transaction date, MCC, transaction type indicator, country code, and state code
  • Make sure your correct MCC is used in the authorization request and it matches what will be sent with transaction clearing

Consumer Disputes

Description
 Merchandise/Services Not Received

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The customer claims you didn’t provide the goods or services as promised
  • The merchant delays delivery; the merchant charges the cardholder prior to shipping or delivery
  • The merchant ships on time or has the product available for pick-up but does not inform the customer

Transaction Modifiers

  • Services Not Provided or Merchandise Not Received

Prevention Steps

  • Abide by the delivery date you promised
  • Have merchandise ready for pickup at the time you specified it would be available
  • Make sure you accurately describe the services that will be provided
  • Don’t charge the card until the merchandise has been shipped
  • Notify the customer as soon as possible if merchandise is out of stock or the delivery will be delayed

Description
 Cancelled Recurring Transaction

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims you processed a recurring transaction after they requested a cancellation
  • You processed a recurring transaction on an account that had been closed
  • The cardholder withdraws permission to charge the account or cancels payment for subscription

Transaction Modifiers

  • Cancelled Recurring Transaction

Prevention Steps

  • Make sure qualified cancellation and non-renewal requests are fulfilled promptly
  • Send a notification after you’ve cancelled the recurring payment
  • If new fees are incurred after the cancellation, communicate with the cardholder about how those charges should be handled
  • Clearly and concisely communicate your cancellation policy and make it easy for customers to find the information
  • Remind customers of upcoming charges, especially if a significant amount of time passes between each recurring billing cycle

Description
 Not As Described Or Defective Merchandise/Services

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims goods or services provided didn’t match the description listed or verbally provided at the time of purchase
  • Were defective or damaged, or the quality wasn’t what was expected
  • The merchandise was damaged in transit; the merchandise does not match the merchant’s description

Transaction Modifiers

  • Not as Described or Defective Merchandise/Services

Prevention Steps

  • Make sure all service and merchandise descriptions are complete, accurate, and not misleading
  • Use the correct size boxes and sufficient packing material so items won’t break in transit
  • Make sure your fulfillment department is familiar with your merchandise, has a complete understanding of what has been purchased, and knows what to ship
  • Resolve the issue yourself. Don’t refer the cardholder to the manufacturer instead

Description
 Counterfeit Merchandise

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant is unaware of the counterfeit merchandise; the customer fraudulently claims the goods are not genuine
  • (Note: This reason code supersedes merchants’ return policy)

Transaction Modifiers

  • Counterfeit Merchandise

Prevention Steps

  • Only sell genuine merchandise
  • Make sure all product descriptions are complete, accurate, and not misleading

Description
 Misrepresentation

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant’s product descriptions are vague, inaccurate, or insufficient
  • Examples of typical merchant types for this dispute include: timeshare reseller, debt consolidation, credit repair, foreclosure relief services, investment products, and the like

Transaction Modifiers

  • Misrepresentation of the purchased good and/or service

Prevention Steps

  • Make sure all descriptions of the services or merchandise are complete, accurate, and not misleading
  • Clearly and concisely communicate your terms of service and make it easy for customers to find the information
  • Fully comply with all of Visa’s requirements for free trials, introductory offers, and upsells

Description
 Credit Not Processed

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The merchant didn’t credit the account; the merchant issued the credit but not in time to be posted to the customer’s most recent statement
  • The customer misunderstood the return policy; the merchant processed a transaction receipt that should have been voided

Transaction Modifiers

  • Credit Not Processed

Prevention Steps

  • Take care not to accidentally process transactions that should be voided or cancelled
  • Adhere to any promises for credits or refunds
  • Fulfill all qualified cancellations or refund requests promptly so the credit will appear on the cardholder’s next statement

Description
 Cancelled Merchandise/Services

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims to have returned merchandise or cancelled a service, but credit hasn’t been applied to the cardholder’s statement yet
  • The merchant has not yet issued a due credit; issued the credit but it hasn’t posted to the customer’s account yet

Transaction Modifiers

  • Cancelled Merchandise/Services

Prevention Steps

  • If you never received returned merchandise from the cardholder, provide documentation that proves inaction on the cardholder’s part
  • If you received returned merchandise but didn’t accept it because it violated your return policy, provide documentation that proves you refused delivery
  • If the cardholder didn’t abide by your cancellation policy, provide documentation that proves why you didn’t fulfill the cancellation requisition

Description
 Original Credit Transaction Not Accepted

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder did not accept the credit or local laws prohibit the issuer from allowing original credit transactions (OCTs)

Transaction Modifiers

  • Original Credit Transaction Not Accepted

Prevention Steps

  • Maintain accurate records
  • Familiarize yourself with usage laws for areas you serve

Description
 Non-Receipt of Cash or Load Transaction Value

Time Limit (Issuer/Cardholder)
 120 Days

Time Limit (Acquirer/Merchant)
 30 days (cut to 20 days in 2019)

Typical Causes

  • The cardholder claims not to have received cash or only received a partial amount from an ATM withdrawal
  • Or, the cardholder did not receive the correct load transaction value

Transaction Modifiers

  • Non-Receipt of Cash or Load Transaction Value at ATM

Prevention Steps

  • Reconcile ATMs promptly
  • Adjust out-of-balance ATMs
  • Process a credit as soon as possible if you notice a discrepancy

Mastercard Chargeback Reason Codes

Mastercard recently reworked its list of reason codes, consolidating many of them into larger categories. Instead of having a different code for each individual reason like the other card networks, Mastercard now uses a single code for all Authorization-Related Chargebacks, one for all Point of Interaction Error chargebacks, and one for all Cardholder Disputes chargebacks.

This consolidation approach benefits subscription businesses by simplifying dispute categorization, though it requires more detailed analysis of the underlying dispute reasons to implement targeted prevention strategies.

Fraud

Description
 No Cardholder Authorization

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The cardholder claims the transaction was unauthorized
  • The transaction was placed by someone who had fraudulently obtained the account information
  • The cardholder didn’t recognize the transaction (billing descriptor) on the credit card statement
  • A family member used the account without the primary cardholder’s knowledge

Transaction Modifiers

  • Digital Goods Download
  • Site to Store
  • CNP Airline Transaction
  • Customer Profile
  • Recurring Transaction

Prevention Steps

  • Consider using all the tools available to you—including Mastercard SecureCode, CVC2, and Address Verification Service (AVS)
  • Use pre-sale fraud detection service providers that can help verify the cardholder’s identity, detect potential criminal activity, and reduce the risk of accepting unauthorized transaction
  • Use a billing descriptor that is easily recognized by the cardholder
  • Always submit an authorization request, no matter the transaction amount
  • Make sure you differentiate between card-absent and card-present transactions during clearing by noting internet, phone, or mail orders

Description
 Fraudulent Processing of Transactions

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The cardholder claims to have authorized one card-present transaction with you, but one or more additional transactions conducted in the next 15 minutes were not authorized

Transaction Modifiers

  • Multiple unauthorized transactions

Prevention Steps

  • If you notice a duplicate transaction, issue a credit as soon as possible
  • Double check all transaction receipts before they are deposited
  • Only send batches one time
  • If the customer wants to change to a different form of payment after initially offering the payment card, be sure to void the charge

Description
 Questionable Merchant Activity

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • This transaction is listed in a Mastercard Announcement under the Global Merchant Audit Program (GMAP)
  • This transaction violates Mastercard’s rules or the merchant was on a Mastercard security list
  • The acquirer processed a transaction for a merchant that later was listed in a MasterCard Global Security Bulletin

Transaction Modifiers

  • GMAP violation
  • Security bulletin listing

Prevention Steps

  • Always adhere to Mastercard rules and regulations
  • Maintain accurate records
  • Check transactions against the Mastercard Global Security Bulletin list

Description
 Cardholder Does Not Recognize—Potential Fraud

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The cardholder claims not to recognize a card-not-present transaction

Transaction Modifiers

  • Card-not-present transaction

Prevention Steps

  • Consider using all the tools available to you—including Mastercard SecureCode, CVC2, and Address Verification Service (AVS)
  • Use pre-sale fraud detection service providers that can help verify the cardholder’s identity, detect potential criminal activity, and reduce the risk of accepting unauthorized transaction
  • Use a billing descriptor that is easily recognized by the cardholder
  • Make sure you differentiate between card-absent and card-present transactions during authorization and clearing

Description
 Chip Liability Shift

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The cardholder has a chip card and someone made a counterfeit copy of it
  • You processed a transaction with the counterfeit card on a terminal that wasn’t EMV-compliant rather than using a chip reading device that would have detected the fraud
  • Now, the cardholder claims the purchase was unauthorized

Transaction Modifiers

  • EMV Liability Shift

Prevention Steps

  • Only use EMV-compliant terminals
  • Always use the correct cardholder verification method—signature, PIN, etc.
  • Create an electronic or manual imprint for every card-present transaction

Description
 Chip/PIN Liability Shift

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • A chip card was issued, but the cardholder claims not to have possession of it
  • You processed a transaction without obtaining the cardholder’s PIN, and now the cardholder claims the purchase was unauthorized

Transaction Modifiers

  • Chip/PIN Liability Shift

Prevention Steps

  • Only use EMV-compliant terminals
  • Always use the correct cardholder verification method—signature, PIN, etc.
  • Create an electronic or manual imprint for every card-present transaction

Authorization

Description
 Warning Bulletin File

Time Limit (Issuer/Cardholder)
 45 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • Transaction processed with card listed in warning bulletin
  • Failed to check card status before processing

Transaction Modifiers

  • Warning Bulletin File

Prevention Steps

  • Check card recovery bulletin for all transactions
  • Implement automated card status verification
  • Train staff on proper authorization procedures

Description
 Authorization-Related Chargeback

Time Limit (Issuer/Cardholder)
 90 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The merchant didn’t obtain authorization or attempted to obtain authorization after the transaction date
  • The merchant attempted to “force” the transaction
  • The merchant re-swiped the card multiple times after an initial authorization decline

Transaction Modifiers

  • Authorization required but not obtained

Prevention Steps

  • Confirm authorization on all transactions
  • Make sure terminals are chip-compliant
  • Do not override declined transactions

Processing Errors

Description
 Account Number Not On File

Time Limit (Issuer/Cardholder)
 45 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • Transaction processed to invalid or unassigned account number
  • Account number does not match issuer records

Transaction Modifiers

  • Invalid account number

Prevention Steps

  • Verify account numbers before processing
  • Use proper card reading technology
  • Implement account validation systems
  • Check authorization responses carefully

Description
 Transaction Amount Differs

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • Final amount different from authorized amount
  • Unauthorized amount modifications
  • Processing errors in amount calculation

Transaction Modifiers

  • Amount variance

Prevention Steps

  • Double check calculations and the final transaction amount before processing
  • Don’t change the transaction amount without the cardholder’s consent
  • Void any transactions if the cardholder wishes to use a different payment method

Description
 Point-of-Interaction Error

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The merchant submitted a single batch of transactions multiple times
  • The merchant deposited both copies of the sales receipt (merchant and sales copy)
  • The merchant created two sales receipts for a single transaction
  • The merchant deposited a receipt with more than one acquirer

Transaction Modifiers

  • DCC Selected by Merchant
  • DCC Unknown/Refused
  • Late Presentment
  • Incorrect Transaction Amount

Prevention Steps

  • Review transaction receipts before depositing
  • Submit a batch only one time
  • Credit any duplicate transactions
  • Deposit receipts with only one acquirer
  • Train staff on the proper procedures for handling credits

Description
 Late Presentment

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • You presented the transaction more than seven calendar days after the transaction date and the account is now permanently closed
  • The transaction wasn’t processed in a timely fashion and the account has since been closed

Transaction Modifiers

  • Late Presentment

Prevention Steps

  • Always send an authorization request before processing a transaction
  • Present transactions to the issuer within the specified time limit
  • Send completed transactions to your card processor as soon as possible (preferably on day of the sale)

Description
 Correct Transaction Currency Code Not Provided

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The cardholder claims you didn’t give the option to pick a currency or you used POI currency conversion incorrectly
  • The transaction currency differs from the currency transmitted through Visa
  • The cardholder was not advised or did not agree that Dynamic Currency Conversion (DCC) would occur

Transaction Modifiers

  • DCC Selected by Merchant
  • DCC Unknown/Refused

Prevention Steps

  • Don’t automatically apply dynamic currency conversion to transactions. Give customers the option to select the service if they are interested, but don’t require its use
  • Have systems in place to manage multiple currencies. Make sure staff are trained on procedures
  • Inform cardholders of the use of currency conversion and applicable fees
  • Always give the cardholder the option to make the purchase using local currency

Consumer Disputes

Description
 Cardholder Dispute

Time Limit (Issuer/Cardholder)
 120 calendar days

Time Limit (Acquirer/Merchant)
 45 calendar days

Typical Causes

  • The merchant sent the wrong item; the item was damaged during shipping
  • The merchant inaccurately described the products or services; the merchant didn’t perform the services as described
  • The merchant did not accept a product return; the merchant sold counterfeit products
  • The quality of goods or services wasn’t adequate

Transaction Modifiers

  • Counterfeit Merchandise
  • Credit Not Processed
  • Digital Goods Purchase of USD 25 or Less
  • Non-Receipt
  • Not As Described/Defective
  • Recurring Transaction
  • Timeshare Cancellation
  • Transaction Not Completed

Prevention Steps

  • Clearly explain the situations that might cause you to charge the card including charges for loss, theft, or damage
  • Have the cardholder read and agree to terms of service before processing the original transaction
  • Double check orders to ensure the correct item is shipped
  • Provide honest, detailed product descriptions
  • Accept returns from cardholders and issue credit promptly
  • Never sell counterfeit products

Description Cardholder Dispute—Not Elsewhere Classified (U.S. Region Only)

Time Limit (Issuer/Cardholder) 120 calendar days or 60 calendar days from first learning about the dispute from the cardholder

Time Limit (Acquirer/Merchant) 45 calendar days

Typical Causes

  • The cardholder has made an unsuccessful good-faith effort to resolve a dispute with the merchant

Transaction Modifiers

  • Not Elsewhere Classified

Prevention Steps

  • Resolve all customer complaints as quickly as possible

Description Goods or Services Not Provided

Time Limit (Issuer/Cardholder) 120 calendar days

Time Limit (Acquirer/Merchant) 45 calendar days

Typical Causes

  • Customer did not receive ordered goods or services
  • Delayed delivery without notification
  • Services not activated or provided

Transaction Modifiers

  • Digital Goods Purchase of USD 25 or Less
  • European Transaction for Travel Services

Prevention Steps

  • Provide delivery tracking and confirmation
  • Notify customers of delays
  • Ensure service activation
  • For subscriptions: Confirm access and usage

Description Addendum, No-show, or ATM Dispute

Time Limit (Issuer/Cardholder) 120 calendar days

Time Limit (Acquirer/Merchant) 45 calendar days

Typical Causes

  • The cardholder claims not to have received cash or only received a partial amount from an ATM withdrawal

Transaction Modifiers

  • ATM Transaction

Prevention Steps

  • Reconcile ATMs promptly
  • Adjust out-of-balance ATMs
  • Process a credit as soon as possible if you notice a discrepancy

Description Credit Not Processed

Time Limit (Issuer/Cardholder) 120 calendar days

Time Limit (Acquirer/Merchant) 45 calendar days

Typical Causes

  • Customer entitled to refund but credit not issued
  • Refund processing delayed or failed
  • Credit promised but not delivered

Transaction Modifiers

  • Credit Not Processed

Prevention Steps

  • Process refunds and credits promptly
  • Clearly communicate refund policies
  • Provide refund confirmation to customers
  • Track and follow up on credit processing

Description Canceled Recurring or Digital Goods Transactions

Time Limit (Issuer/Cardholder) 120 calendar days

Time Limit (Acquirer/Merchant) 45 calendar days

Typical Causes

  • Cardholder claims the merchant continued to bill the card after a recurring transaction was cancelled, or without explicit consent from the cardholder
  • Cardholder did not understand the original terms of the transaction
  • Cardholder received goods/used services after cancelling the recurring transaction

Transaction Modifiers

  • Recurring Transaction – Digital Goods

Prevention Steps

  • Make sure qualified cancellation and non-renewal requests are fulfilled promptly
  • Send a notification after you’ve cancelled the recurring payment
  • Clearly and concisely communicate your cancellation policy and make it easy for customers to find the information
  • Remind customers of upcoming charges, especially if a significant amount of time passes between each recurring billing cycle

American Express Chargeback Reason Codes

American Express is both the card network and the issuer for most of its cards, which can make the dispute process faster and easier in many cases. However, it also means there’s no arbitration process by which merchants can appeal the bank’s decision and have it judged by a neutral party.

For subscription businesses targeting premium customers, understanding American Express disputes is crucial as their cardholders have significantly higher spending volumes and expectations for service quality.

Fraud

Description Missing Imprint

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a transaction without using the magnetic stripe or chip card data, and the cardholder claims he or she didn’t participate in the purchase
  • Note: This reason code should not be used for card-not-present transactions or charges that qualify for the keyed-no imprint program

Transaction Modifiers

  • Missing Imprint

Prevention Steps

  • Create an electronic or manual imprint for every card-present transaction
  • Use fallback options—like manually entering transaction data—as a last resort
  • If you do perform a key-entered transaction, make a manual imprint of the card
  • Only use EMV-compliant terminals

Description Missing Signature

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The merchant neglected to give the cardholder a copy of the signed receipt
  • Signature on the receipt is invisible or not prominent due to light ink, ribbed or colored paper, or fading
  • The original order receipt is mishandled or is scanned at a smaller size

Transaction Modifiers

  • Missing Signature

Prevention Steps

  • Scan or make copies of the order receipt at actual size
  • Maintain full ink/toner in machines
  • Print and keep a copy of the order receipt
  • Always provide cardholder with a copy of the receipt

Description No Card Member Authorization

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims he or she has previously shopped with the merchant but didn’t participate in this particular purchase

Transaction Modifiers

  • No Authorization

Prevention Steps

  • Consider using fraud detection tools such as CID and Address Verification Service (AVS)
  • Use pre-sale fraud detection service providers that can help verify the cardholder’s identity, detect potential criminal activity, and reduce the risk of accepting an authorized transaction
  • Use a billing descriptor that is easily recognized by the cardholder
  • Always submit an authorization request, no matter the transaction amount

Description Card Not Present

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a mail order, telephone order, or internet order, and the cardholder claims he or she didn’t participate in the purchase

Transaction Modifiers

  • Airline Transaction

Prevention Steps

  • Consider using fraud detection tools such as card security code (CID) and Address Verification Service (AVS)
  • Use pre-sale fraud detection service providers that can help verify the cardholder’s identity, detect potential criminal activity, and reduce the risk of accepting an unauthorized transaction
  • Use a billing descriptor that is easily recognized by the cardholder
  • Always submit an authorization request, no matter the transaction amount

Description EMV Counterfeit

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a transaction with a counterfeit card, and the cardholder claims he or she didn’t participate in the purchase
  • The counterfeit card wasn’t detected because either the POS wasn’t chip-and-PIN enabled or the transaction was manually keyed

Transaction Modifiers

  • EMV Counterfeit

Prevention Steps

  • Only use EMV-compliant terminals
  • Always use the correct cardholder verification method—signature, PIN, etc.
  • Make sure you differentiate between card-not-present and card-present transactions during clearing by noting internet, phone, or mail orders

Description EMV Lost/Stolen/Non-Received

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a transaction but the cardholder denies participating in it because the card was lost, stolen, or never received
  • The fraud wasn’t detected because either the POS was not chip-and-PIN enabled or the transaction was manually keyed

Transaction Modifiers

  • EMV Lost/Stolen/Non-Received

Prevention Steps

  • Only use EMV-compliant terminals
  • Always use the correct cardholder verification method—signature, PIN, etc.
  • Make sure you differentiate between card-not-present and card-present transactions during clearing by noting internet, phone, or mail orders

Description Fraud Full Recourse Program

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder denies authorizing the charge and the merchant has been placed in the Fraud Full Recourse Program

Transaction Modifiers

  • Fraud Full Recourse Program

Prevention Steps

  • Proof that you had not been placed in the Fraud Full Recourse Program at the time of the Chargeback, or
  • Proof that a credit which directly offsets the disputed charge has already been processed

Description Immediate Chargeback Program / Partial Immediate Chargeback Program

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder has disputed the charge and the merchant has been placed in the Immediate Chargeback Program or Partial Immediate Chargeback Program

Transaction Modifiers

  • Immediate Chargeback Program
  • Partial Immediate Chargeback Program

Prevention Steps

  • Issue credits/refunds within 7 calendar days
  • Ensure your refund/cancellation policies clearly state time frames of when credits will be issued

Authorization

Description Charge Amount Exceeds Authorization Amount

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The amount of the authorization approval was less than the amount you charged the card

Transaction Modifiers

  • Amount Exceeds Authorization

Prevention Steps

  • Don’t change the amount of a transaction once authorization has been requested and approved
  • If you add gratuities to transactions, don’t exceed the acceptable limit

Description No Valid Authorization

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • An authorization approval before processing the transaction was not received
  • The request was either declined or the card had expired

Transaction Modifiers

  • No Authorization

Prevention Steps

  • Always send an authorization request before processing a transaction
  • If you receive a “decline” authorization response, either terminate the transaction or submit a second authorization request
  • Never proceed without authorization
  • Check the card’s expiration date before processing the transaction

Description Authorization Approval Expired

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The authorization approval expired before you charged the card

Transaction Modifiers

  • Expired Authorization

Prevention Steps

  • Make sure you send completed transactions to your payment processor within the timeframe specified in your merchant agreement
  • A good practice is to submit transactions on the day of the sale or as soon as possible

Processing Errors

Description Unassigned Card Number

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a transaction using an invalid or otherwise incorrect card number
  • Note: Resubmission of the transaction if you can provide the correct card number

Transaction Modifiers

  • Unassigned Card Number

Prevention Steps

  • Always request authorization before completing a transaction
  • If an authorization request is denied, stop the transaction and ask for an alternate form of payment
  • Always swipe or dip a card—only use fall-back options in emergency situations

Description Credit Processed as Charge

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a transaction, but the cardholder claims it should have been a refund

Transaction Modifiers

  • Credit Processed as Charge

Prevention Steps

  • Take care not to accidentally process transactions that should be voided or cancelled
  • Adhere to any promises for credits or refunds
  • Fulfill all qualified cancellations or refund requests promptly so the credit will appear on the cardholder’s next statement
  • If you notice a duplicate transaction, issue a credit as soon as possible

Description Charge Processed as Credit

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a refund, but the cardholder claims it should have been a transaction

Transaction Modifiers

  • Charge Processed as Credit

Prevention Steps

  • Take care not to accidentally process transactions that should be voided or cancelled
  • Double check all transaction receipts before they are deposited

Description Incorrect Charge Amount

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The transaction amount you processed differs from the amount the cardholder agreed to pay

Transaction Modifiers

  • Incorrect Amount

Prevention Steps

  • Unless authorized, never change the amount of a completed transaction without the cardholder’s consent
  • Use caution when entering handwritten transaction information
  • Always swipe or dip a card—only use fall-back options in emergency situations

Description Late Submission

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The transaction was not submitted within the required time frame

Transaction Modifiers

  • Late Submission

Prevention Steps

  • Make sure you send completed transactions to your payment processor within the timeframe specified in your merchant agreement
  • A good practice is to submit transactions on the day of the sale or as soon as possible

Description Duplicate Charge

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • A single transaction was submitted more than once

Transaction Modifiers

  • Duplicate Charge

Prevention Steps

  • If you notice a duplicate transaction, issue a credit as soon as possible
  • Double check all transaction receipts before they are deposited
  • Only send batches one time
  • If the customer wants to change to a different form of payment after initially offering the payment card, be sure to void the charge

Description Non-Matching Card Number

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The card number in the submission does not match the card number used for the original transaction

Transaction Modifiers

  • Non-Matching Card Number

Prevention Steps

  • Use caution when entering handwritten transaction information
  • Always swipe or dip a card—only use fall-back options in emergency situations

Description Currency Discrepancy

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Processed a transaction but didn’t use the correct currency

Transaction Modifiers

  • Currency Discrepancy

Prevention Steps

  • Have systems in place to manage multiple currencies. Make sure staff are trained on procedures
  • Don’t automatically convert currencies for international shoppers. Allow customers to opt-in to a conversion service if they are interested, but don’t require its use

Card Member Disputes

Description Credit Not Processed

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims you were supposed to provide a refund, but a credit hasn’t been applied to the card yet

Transaction Modifiers

  • Credit Not Processed

Prevention Steps

  • Make sure your refund or cancellation policy clearly explains what the cardholder is expected to do, and make the policy easy to find
  • Adhere to any promises for credits or refunds
  • Fulfill all qualified cancellations or refund requests promptly so the credit will appear on the cardholder’s next statement
  • If you will be crediting the cardholder for a reduced amount, communicate the difference before processing the credit

Description Goods/Services Returned or Refused

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims to have returned merchandise, but you didn’t provide a refund
  • Or, the cardholder refused to accept the services offered or the delivery of goods, but you didn’t provide a credit

Transaction Modifiers

  • Returned or Refused

Prevention Steps

  • For card-present transactions, clearly disclose the return policy on the transaction receipt
  • For card-present transactions, print the words “no refunds” or “in-store credit only” on all copies of the transaction receipt if you do not allow returns or have a limited return policy
  • For online transactions, clearly disclose the return policy, either on the checkout page that contains the final purchase amount or on the checkout page near the submit button
  • Don’t accept delivery of returned merchandise if it doesn’t comply with your policy

Description Goods/Services Canceled

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims that the goods or services ordered were cancelled, but you didn’t provide a refund

Transaction Modifiers

  • Canceled

Prevention Steps

  • For card-present transactions, clearly disclose the cancellation policy on the transaction receipt
  • For online transactions, clearly disclose the cancellation policy, either on the checkout page that contains the final purchase amount or on the checkout page near the submit button
  • Fulfill all qualified cancellations requests promptly so the credit will appear on the cardholder’s next statement
  • If you will be crediting the cardholder for a reduced amount, communicate the difference before processing the credit

Description Goods/Services Not Received or Only Partially Received

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims not to have received the goods or services
  • Or, the cardholder only partially received what was promised

Transaction Modifiers

  • Airline Transaction
  • Digital Goods Download
  • Site to Store

Prevention Steps

  • Abide by the delivery date you promised
  • Have merchandise ready for pickup at the time you specified it would be available
  • Make sure you accurately describe the services that will be provided
  • Don’t charge the card until the merchandise has been shipped
  • Notify the customer as soon as possible if merchandise is out of stock or the delivery will be delayed

Description Paid by Other Means

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims to have paid with a different payment method

Transaction Modifiers

  • Other Payment Method

Prevention Steps

  • Double check all transaction receipts before they are deposited
  • If the customer wants to change to a different form of payment after initially offering the payment card, be sure to void the charge

Description “No Show” or CARDeposit Canceled

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Cardholder was billed for lodging services that were allegedly canceled

Transaction Modifiers

  • No Show
  • CARDeposit Canceled

Prevention Steps

  • Always inform the cardholder of your cancellation policy at the time of the reservation
  • Log all confirmation and cancellation numbers as required by the CARDeposit programs

Description Canceled Recurring Billing

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims to have cancelled a recurring billing transaction but was still charged
  • Or, the cardholder tried to cancel the transaction but was unable to

Transaction Modifiers

  • Canceled Recurring

Prevention Steps

  • Make sure qualified cancellation and non-renewal requests are fulfilled promptly
  • Send a notification after you’ve cancelled the recurring payment
  • If new fees are incurred after the cancellation, communicate with the cardholder about how those charges should be handled
  • Clearly and concisely communicate your cancellation policy and make it easy for customers to find the information
  • Remind customers of upcoming charges, especially if a significant amount of time passes between each recurring billing cycle

Description Goods/Services Not As Described

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims to have received goods or services that were different from what was offered at the time of the purchase

Transaction Modifiers

  • Not As Described

Prevention Steps

  • Make sure all service and merchandise descriptions are complete, accurate, and not misleading
  • Make sure your fulfillment department is familiar with your merchandise, has a complete understanding of what has been purchased, and knows what to ship
  • Provide exceptional customer service and promptly acknowledge customers when they make contact
  • If the cardholder contacts you to resolve the issue, promptly fulfill all valid requests for replacements or refunds

Description Goods/Services Damaged or Defective

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The cardholder claims to have received goods or services that were damaged or defective

Transaction Modifiers

  • Damaged or Defective

Prevention Steps

  • Provide exceptional customer service and promptly acknowledge customers when they make contact
  • If the cardholder contacts you to resolve the issue, promptly fulfill all valid requests for replacements or refunds
  • Use the correct size boxes and sufficient packing material so items won’t break in transit
  • Resolve the issue yourself. Don’t refer the cardholder to the manufacturer instead

Inquiry/Miscellaneous

Description Insufficient Reply

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • American Express sent an inquiry to learn more about the transaction, but you didn’t provide enough information

Transaction Modifiers

  • Insufficient Reply

Prevention Steps

  • Maintain complete and accurate records for each transaction you process
  • Make sure you can access this information quickly and easily

Description No Reply

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • American Express sent an inquiry to learn more about the transaction, but you didn’t reply within the specified time frame

Transaction Modifiers

  • No Reply

Prevention Steps

  • Maintain complete and accurate records for each transaction you process
  • Make sure you can access this information quickly and easily

Description Chargeback Authorization

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • American Express sent an inquiry to learn more about the transaction, and you responded by authorizing American Express to proceed with a chargeback

Transaction Modifiers

  • Authorized Chargeback

Prevention Steps

  • Maintain complete and accurate records for each transaction you process
  • Make sure you can access this information quickly and easily

Description Vehicle Rental – Capital Damages

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • Cardholder misunderstood responsibility for capital damages
  • Cardholder disagrees with charges
  • Total damages exceed 110% of the agreed-upon amount
  • The merchant made an error in calculating the total

Transaction Modifiers

  • Vehicle Rental
  • Capital Damages

Prevention Steps

  • Maintain proof that the cardholder agreed to and signed an acknowledgment of responsibility for capital damages
  • Make sure total charges do not exceed 110% of the agreed-upon amount

Description Vehicle Rental – Theft or Loss of Use

Time Limit (Issuer/Cardholder) not applicable

Time Limit (Acquirer/Merchant) 20 days

Typical Causes

  • The merchant bills the cardholder for AMX-covered costs

Transaction Modifiers

  • Vehicle Rental
  • Theft or Loss

Prevention Steps

  • Maintain proof that charges were valid and not for theft, loss of use, or other fees
  • Maintain proof that a credit which directly offsets the disputed charge has already been processed

Discover Chargeback Reason Codes

Most Discover cards are issued by Discover Bank, meaning Discover operates as both the issuer and the card network in any transaction, as well as in any chargeback. This means the process is often more streamlined than it would be with a third-party card network like Visa or Mastercard, but it also means there’s no arbitration process by which merchants can appeal the bank’s decision and have it judged by a neutral party.

Fraud

Typical Causes:

  • Cardholder denies authorizing online, phone, or mail transaction
  • Fraudulent use of stolen card information
  • Account takeover fraud

Prevention Steps:

  • Use Address Verification Service and CVV verification
  • Implement fraud detection systems
  • Maintain clear billing descriptors
  • Send transaction confirmations
  • For subscriptions: Implement account security measures

Authorization

Typical Causes:

  • Transaction processed without authorization
  • Authorization request not submitted
  • Delayed authorization request

Prevention Steps:

  • Always obtain authorization before processing
  • Submit authorization requests promptly
  • Implement automated authorization systems
  • Train staff on authorization requirements

Typical Causes:

  • Transaction processed despite declined authorization
  • Multiple authorization attempts after decline
  • Override of declined authorization

Prevention Steps:

  • Respect declined authorizations
  • Request alternative payment methods
  • Avoid multiple authorization attempts
  • Implement authorization controls

Typical Causes:

  • Authorization not obtained when required
  • Non-compliance with authorization procedures
  • Authorization response ignored

Prevention Steps:

  • Obtain authorization for all required transactions
  • Follow proper authorization procedures
  • Respect authorization responses
  • Implement compliance monitoring

Processing Errors

Typical Causes:

  • Invalid or unassigned card number used
  • Data entry errors in card number
  • Expired or inactive card

Prevention Steps:

  • Verify card numbers before processing
  • Use card validation algorithms
  • Check card expiration dates
  • Implement card verification systems

Consumer Disputes

Typical Causes:

  • Unclear billing descriptor
  • Customer forgot about transaction
  • Family member made purchase without knowledge

Prevention Steps:

  • Use clear, recognizable billing descriptors
  • Send transaction confirmations
  • Provide customer service contact information
  • For subscriptions: Send regular account statements

Typical Causes:

  • Recurring billing continued after cancellation
  • Customer unaware of recurring charges
  • Cancellation not processed

Prevention Steps:

  • Send renewal notifications before billing
  • Make cancellation procedures clear and easy
  • Process cancellations immediately
  • Provide cancellation confirmations
  • For subscriptions: Implement proactive customer communication

Typical Causes:

  • Transaction amount different from authorization
  • Amount changed without customer consent
  • Processing errors in amount

Prevention Steps:

  • Ensure transaction amounts match authorization
  • Obtain consent for amount changes
  • Implement amount verification procedures
  • Document any amount adjustments

Typical Causes:

  • Customer did not receive ordered goods or services
  • Delivery failed or delayed
  • Service not activated or provided

Prevention Steps:

  • Provide delivery tracking and confirmation
  • Ensure timely delivery and service activation
  • Don’t charge until goods are shipped
  • For digital services: Confirm access and provide usage logs

Typical Causes:

  • Products defective or not as described
  • Service quality below expectations
  • Quality control failures

Prevention Steps:

  • Maintain high quality standards
  • Provide accurate product descriptions
  • Handle quality complaints promptly
  • Offer satisfaction guarantees