We’ll cut straight to the chase: chargeback reason codes should never be confusing, overwhelming, or frustrating. The key to removing the doubt and confusion around reason codes lies in having easy access to the right information.
Chargeback reason codes provide the reasons for the chargebacks you’re dealing with. Each chargeback comes with its own chargeback reason code. It’s in the chargeback reason code details that you can learn why the chargeback was filed, the amount of time you have to file a chargeback dispute, and the compelling evidence requirements for the dispute.
We are on your side and want to empower you with access to information about all things chargebacks. There should be zero confusion, frustration, or fear with this critical aspect of managing your finances.
Credit Card Companies and Chargeback Reason Codes
Most of the confusion over reason codes comes from the lack of similarity across credit card companies. Each credit card company has its own reason code format and numbering system. Don’t ever assume that a reason code from Visa means the same thing as reason code for Mastercard.
Each chargeback reason code is two, three, or four digits and includes a short description detailing the chargeback. Here’s a look at the reason codes for the same scenario from the major credit card companies:
- Visa: Reason Code 30 Services not provided or merchandise not received.
- Mastercard: Reason Code 4859 Service not rendered.
- Discover: Reason Code 4755 Non-receipts of goods or services.
- American Express: Reason Code C08 Goods or services not received or partially received.
This clearly demonstrates how and why it’s easy to get confused when dealing with reason codes. The above example illustrates that one scenario – the customer didn’t receive the order – can have four distinct reason codes and descriptions.
Remind yourself of this example when you’re struggling to interpret chargeback details. It may not be possible for you to know every aspect of reason codes. However, when you have easy access to the information that can answer your questions and enable a successful chargeback representment, you’re ahead of the game.
Chargeback Reason Code Categories
The 151 chargeback reason codes across the four major credit card companies can generally be grouped into five different categories. Knowing these categories helps you further understand the chargeback and identify any problems within your payment solution, customer service, and sales processes.
- Fraud or No Authorization. Applies when real fraud has occurred and the customer’s card has been violated, or when the customer doesn’t remember the transaction but doesn’t believe their card has been compromised. For example, the customer’s card was charged multiple times for one transaction.
- Cancel Recurring Billing. The customer is disputing the renewal of subscription services such as a food delivery service or newspaper delivery. For example, the customer cancelled the subscription but was still charged for an outstanding balance.
- Products or Services. This category applies to claims related to the quality of the merchandise or services received. For example, the customer claims the product doesn’t match the online description.
- Liability Shift. This category applies to any chargebacks related to non-chip credit cards.
- Other. A broad category that captures any chargeback claims that do not fit in the above categories. For example, there isn’t a reason code for the customer’s dispute or the cardholder is disputing the exchange rate for an international transaction.
Reading the category descriptions carefully provides some insight into ways you can improve your processes to prevent chargebacks. Pay attention to the types of chargebacks you receive, and look for patterns that highlight problems within your solution. For example, perhaps your website descriptions are out-of-date, or it is complicated for your customers to cancel subscriptions, or there are holes in your fraud prevention solution making it easy for credit card fraud.
Chargeback Reason Code Resources
We urge you to browse the following Verifi and non-Verifi resources for more information about chargeback reason codes. Remember knowing the reason code details is critical in a successful chargeback representment.
- Shining Light on the Mystery of Chargeback Reason Codes
- Visa Representment Changes
- Guide to Chargeback Management
- Chargeback Management Guidelines for Visa Merchants
- Mastercard Chargeback Guide
- Discover Global Network
- American Express: How to Manage and Help Prevent Disputes
You can contact us at any time to ask us your questions about chargeback reason codes. We are here to help you – there should be no mystery when it comes to chargebacks and reason codes.