All Chargeback Reason Codes: The Definitive Reference for Merchants

When a customer’s items don’t arrive or they’re overcharged, they often reach out to the business first. If the customer can’t get help through the merchant, they may decide to file a chargeback instead. 

For the merchant, chargebacks are more costly than basic returns and involve an onerous investigation process. Each one is assigned a chargeback reason code, which signifies why the chargeback dispute is happening. By understanding the chargeback codes, you can figure out the type of response and documentation you need.

TL;DR

• Chargeback reason codes are standardized codes that explain why a chargeback is occurring.
• By using these codes, you can figure out the type of evidence you need to gather.
• Each payment network has different chargeback codes, so you should look up the appropriate codes for each network.
• Better return policies, good customer service, and clear shipping timelines are just a few of the things you can do to prevent chargebacks. 
• For the latest chargeback prevention tools, reach out to PayCompass for expert guidance and support.

What Are Chargeback Reason Codes? 

In an average year, there are over 238 million chargebacks. Unfortunately, merchants only win around 45% of them.

Each of these chargebacks comes with a code. These chargeback reason codes explain why the chargeback occurred. For example, many chargebacks occur due to fraud or a lack of authorization. With this information, merchants can determine the best way to respond.

Types of Chargeback Reason Codes for Each Payment Network

If you’re reviewing a customer dispute, the following chargeback codes can help. We’ll dive into each kind of code, what it means, and how you can respond.

Chargeback Reason Codes for Visa

With Visa chargeback codes, merchants typically have 30 days to respond. You can support your case with transaction receipts, proof that the magnetic strip or chip was read, return policies, cancellation policies, and other documentation. 

Visa Chargeback Codes: Fraud

If a customer says that their transaction was fraudulent, you’ll end up getting one of the following chargeback reason codes. For example, the customer may see a charge on their account that they don’t recognize and assume that their card was stolen.

• 10.1 (EMV Liability Shift Counterfeit Fraud): This happens when a chipped card is used for a card-not-present transaction when the terminal should have processed it as a chip transaction. 
• 10.2 (EMV Liability Shift Non-Counterfeit Fraud): A chip card was used to process a chip transaction, but the cardholder says the card was lost, stolen, or never received. 
• 10.3 (Other Fraud: Card-Present Environment): While the card was present, the number was manually keyed in. Later, the cardholder claims they didn’t authorize the transaction. 
• 10.4 (Other Fraud: Card-Absent Environment): When these chargeback codes appear, it means that the card wasn’t present and the number was manually keyed in.
• 10.5 (Visa Fraud Monitoring Program): If the Visa Fraud Monitoring Program flags a transaction, the merchant has 30 days to respond.

Visa Chargeback Codes: Authorization Errors

These credit card chargeback codes occur if there is an error during the authorization process.

• 11.1 (Card Recovery Bulletin): This error code often appears if a transaction was processed for a card that’s on the Card Recovery Bulletin.
• 11.2 (Declined Authorization): If the issuer declines the transaction and you process it anyway, you’ll get this code. 
• 11.3 (No Authorization or Late Presentment): This code is for when a transaction was processed without correct authorization or the authorization expired.

Visa Chargeback Codes: Processing Errors

With the following Visa chargeback reason codes, Visa doesn’t assign liability automatically because these codes stem from errors that occur while processing the transaction.

• 12.2 (Incorrect Transaction Code): This chargeback code happens when the wrong transaction code is used, such as debiting instead of charging an account. 
• 12.3 (Incorrect Currency): When this code shows up, it means that something about the currency is incorrect. 
• 12.4 (Incorrect Account Number): You have 30 days to respond if the incorrect account number was used. 
• 12.5 (Incorrect Amount): The authorization amount doesn’t match the transaction amount.
• 12.6.1 (Duplicate Processing): This code appears if  the same transaction was processed twice. 
• 12.6.2 (Paid by Other Means): If the customer already paid with cash or another method, this code will appear.
• 12.7 (Invalid Data): If the date or other information appears invalid, you’ll need to provide receipts or documentation that demonstrates the transaction used valid data. 

Visa Chargeback Codes: Cardholder Disputes 

As the name suggests, these Visa chargeback reason codes are used when customers dispute transactions.

• 13.1 (Merchandise or Services Not Received): The customer claims the product or services weren’t received. 
• 13.2 (Canceled Recurring Transaction): This happens if the customer says they were charged for a recurring transaction they already canceled. 
• 13.3 (Not as Described or Defective Merchandise and Services): You’ll see this code if the merchandise was defective or not the way they were described in the product listing.
• 13.4 (Counterfeit Merchandise): If the customer says your goods are counterfeit, you have 30 days to show otherwise.
• 13.5 (Misrepresentation): These chargeback codes show up if goods are misrepresented or falsely advertised. 
• 13.6 (Credit Not Processed): This code occurs if the customer says a credit wasn’t processed on their account. 
• 13.7 (Canceled Merchandise or Services): You’ll get this code if the customer canceled the services or merchandise that they subsequently received.
• 13.8 (Original Credit Transaction Not Accepted): This code occurs when an original credit transaction isn’t accepted.
• 13.9 (Non-Receipt of Cash at an ATM): If the customer says they didn’t receive all of their cash from the ATM, you’ll need to show the transaction time, a payment credential, and other proof.

Chargeback Reason Codes for Mastercard

Mastercard chargeback reason codes can appear for multiple reasons. You’ll generally have 45 days to respond with proof, such as receipts, return policies, cancellation policies, transaction times, proof of delivery, and similar documentation.

Mastercard Chargeback Codes: Authorization (4808)

This is the chargeback reason codes list for authorization-related issues. You can receive a 4808 error code for some of the following reasons.

• The account number isn’t on file.
• The required authorization wasn’t obtained.
• There were multiple authorization requests.
• The chargeback protection period has expired.
• The transaction used a CAT 3 device.
• A transit first ride risk (FRR) claim is involved.

Mastercard Chargeback Codes: Point-of-Interaction Error (4834)

All 4834 chargeback reason codes indicate a point-of-interaction error. This type of error code can appear for multiple reasons.

• The cardholder was debited multiple times for the same purchase.
• The transaction amount is different from the purchase amount.
• The ATM distributed cash incorrectly, or the ATM debited the account multiple times.
• The cardholder says the transaction was unauthorized due to theft or loss.
• The transaction currency was incorrect or wrongly calculated.
• The merchant surcharge was incorrect or not allowed.
• The cardholder believes they have already paid through alternate means.
• The charge was an unreasonable amount for the transaction.
• The transaction was not sent to Mastercard in the required amount of time.

Mastercard Chargeback Codes: Cardholder Disputes (4853)

With these Mastercard chargeback reason codes, there may be a range of different reasons for the code appearing. 4853 codes indicate the customer disputes the transaction in some way.

• The goods or services were either defective or weren’t the way they were originally described.
• The merchant didn’t provide the goods or services.
• The travel or entertainment services weren’t provided or described properly, and the merchant gave a voucher.
• The customer paid more than they should have for the transaction because a credit should have been processed on their account.
• The customer says they received counterfeit goods.
• The cardholder disputes recurring charges.
• The travel or entertainment services purchased were canceled or returned, but a credit wasn’t processed on the customer’s account.
• The original transaction was valid, but the cardholder filed an addendum dispute because an additional transaction wasn’t valid.
• There was a no-show hotel charge.
• The cardholder was charged for a timeshare that they canceled on time according to Mastercard’s rules.
• The cardholder should have received a credit, but they were charged instead.

Mastercard Chargeback Codes: Fraud-Related Charges

There are several fraud-related codes that can sometimes show up, which is why chargeback prevention is so essential for merchants.

• 4837 (No Cardholder Authorization): This code appears if the cardholder doesn’t authorize the transaction.
• 4849 (Questionable Merchant Activity): Sometimes, this code appears if the merchant is on Mastercard’s security list or they break one of Mastercard’s rules.
• 4870 (Chip Liability Shift): This code means the transaction was fraudulent and wasn’t discovered because the chip card wasn’t processed as a chip card.
• 4871 (Chip Liability Shift Lost/Stolen): This code means a chip card was lost, stolen, or never received by the cardholder. As a result, someone else was able to use it for a fraudulent purpose.

Mastercard Chargeback Codes: Miscellaneous Charges

Sometimes, you may receive a few other miscellaneous chargeback codes.

• 4850 (Installment Billing Disputes): This code means the customer disputes the installment billing arrangement.
• 4854 (Cardholder Dispute Not Classified Elsewhere): If the dispute doesn’t fall under any other code, this option is used.

Chargeback Reason Codes for American Express 

If you receive American Express chargeback codes, you generally have 20 days to respond. Unlike Visa and Mastercard, American Express is the issuing bank and the card network. Because of this, American Express has an added incentive to keep cardholders happy, not merchants.

American Express Chargeback Codes: Authorization

The first chargeback reason codes list involves transactions that feature some type of authorization problem.

• A01 (Charge Amount Exceeds Authorization Amount): This code means the customer was charged more than they authorized.
• A02 (No Valid Authorization): The card was declined or the authorization expired.
• A08 (Authorization Approval Expired): The authorization approval expired before the transaction was complete.

American Express Chargeback Codes: Cardmember Dispute

Cardmembers can dispute transactions for multiple reasons.

• C02 (Credit Not Processed): A credit should have been made on the cardholder’s account and it wasn’t.
• C04 (Goods/Services Returned or Refused): A refund should have been issued after the cardholder returned or refused the goods and services.
• C05 (Goods/Services Canceled): The cardholder canceled their order.
• C08 (Goods/Services Not Received or Only Partially Received): This code means the cardholder didn’t receive everything they paid for.
• C14 (Paid by Other Means): You’ll see this code if the customer paid by cash, check, or another method, but their card was still charged.
• C18 (“No Show” or CARDeposit Canceled): This code appears if the customer canceled their lodging and was still charged.
• C28 (Canceled Recurring Billing): When customers are charged for recurring payments that they already canceled, this code will appear.
• C31 (Goods and Services Not as Described): Cardholders file these disputes for inaccurate and falsely advertised goods and services.
• C32 (Goods and Services Damaged or Defective): This code appears when a customer receives defective goods.
• M10 (Vehicle Rental: Capital Damages): You’ll see this code if the cardholder disputes how much they were billed for damages to a rental car.
• M49 (Vehicle Rental: Theft or Loss of Use): This code is used if the cardholder believes they were incorrectly charged for a stolen rental vehicle.

American Express Chargeback Codes: Fraud

These codes appear whenever fraud occurs during the chargeback process. With chargeback management and fraud prevention techniques, you can reduce these kinds of chargebacks.

• FR2 (Fraud Full Recourse Program): American Express flagged the transaction as a potential chargeback.
• FR4 (Immediate Chargeback Program): If a merchant is a part of this program, all non-fraud chargebacks are immediately processed this way.
• FR6 (Partial Immediate Chargeback Program): This is the same as FR4, except it is only for low-value disputes.
• F10 (Missing Imprint): The cardholder wasn’t given a copy of the imprint and wasn’t present for the purchase.
• F14 (Multiple ROCs): While the cardholder authorized the first transaction, they denied subsequent, repeated transactions.
• F24 (No Cardmember Authorization): The cardholder denies participating in the transaction.
• F29 (Card Not Present): This code means the card wasn’t present when the unauthorized transaction happened.
• F30 (EMV Counterfeit): This means that the cardholder claims the transaction was unauthorized. This is only for transactions involving chip cards where the chip isn’t used.
• F31 (EMV Lost/Stolen/Non-received): Although the actual card was used, it was stolen or used in an unauthorized way.

American Express Chargeback Codes: Miscellaneous 

The next American Express chargeback codes are for a range of situations and involve how the merchant responds to the inquiry. 

• R03 (Insufficient Reply): The merchant did not supply sufficient supporting documentation.
• R13 (No Reply): American Express didn’t receive any chargeback response from the merchant.
• M01 (Chargeback Authorization): The merchant allowed American Express to process the chargeback.

American Express Chargeback Codes: Processing Errors

Finally, standard processing errors can lead to some of the following credit card chargeback codes.

• P01 (Unassigned Card Number): The card number used isn’t attached to a valid account or doesn’t exist.
• P03 (Credit Processed as a Charge): The transaction should have been processed as a credit and not a charge.
• P04 (Charge Processed as a Credit): This is for situations when the cardholder should have been charged, but it was processed as a credit instead.
• P05 (Incorrect Charge Amount): The amount charged doesn’t match the transaction amount.
• P07 (Late Submission): For whatever reason, the charge was not turned in within the required timeframe.
• P08 (Duplicate Charge): The same charge was incorrectly repeated.
• P22 (Non-Matching Card Number): These credit card chargeback codes are for situations where the card number doesn’t match the account or isn’t a valid card number.
• P23 (Currency Discrepancy): If this code is present, it means the merchant made some kind of currency conversion or settlement error.

Chargeback Reason Codes for Discover

Most Discover chargeback reason codes occur for similar reasons. Outright fraud, processing errors, and incorrect card numbers are just a few of the most common causes for these chargeback reason codes.

Discover Chargeback Codes: Cardholder Dispute

The first set of Discover chargeback reason codes focuses on cardholder disputes, such as unrecognized transactions or altered amounts.

• AA (Cardholder Does Not Recognize): This code means that the cardholder doesn’t recognize the charge on their account.
• AP (Canceled Recurring Transaction): When this code appears, it means the cardholder canceled a recurring transaction and was charged anyway.
• AW (Altered Amount): This is for transactions where the amount is different from what it should be.
• CD (Credit Posted as Card Sale): The cardholder should have been credited the amount instead of being charged.
• DP (Duplicate Processing): This appears when the cardholder was charged multiple times for the same transaction.
• NF (Non-Receipt of Cash From ATM): When this code occurs, it means the cardholder didn’t receive the funds they should have from the ATM.
• PM (Paid by Other Means): This means the customer already paid through a different method, such as cash or check.
• RG (Non-Receipt of Goods or Services): Although the transaction was paid for, the goods and services were never received.
• RM (Quality Discrepancy): The quality of the goods or services wasn’t the same as what was advertised.
• RN2 (Credit Not Received): Because the cardholder refused delivery of the goods or services, they should have received a credit for the purchase.
• 05 (Good Faith Investigation): For whatever reason, the cardholder or issuer questions whether the transaction is legitimate or not.

Discover Express Chargeback Codes: Processing Errors

The following chargeback reason codes list involves different kinds of processing errors.

• AT (Authorization Non-compliance): The transaction was processed, even though it didn’t receive a positive authorization response.
• IN (Invalid Card Number): This code means the card number that was used wasn’t assigned to a valid account.
• LP (Late Presentment): The merchant didn’t complete the transaction in a timely manner.

Discover Chargeback Codes: Fraud

Finally, the following credit card chargeback codes mean that some kind of fraud occurred.

• UA01 (Fraud: Card Present Environment): While the card was present, the cardholder didn’t authorize its use.
• UA02 (Fraud: Card-Not-Present Environment): The merchant may have attempted to process a card multiple times after it was declined or tried to override the decline in some way. 
• UA05 (Fraud: Counterfeit Chip Transaction): This code is when the cardholder says they weren’t present for a transaction that used a chip. 
• UA06 (Fraud: Chip-and-Pin Transaction): The cardholder says they weren’t involved in a transaction at a chip-enabled terminal that didn’t require a PIN.

Why Chargeback Reason Codes Exist

Ultimately, credit card chargeback codes exist to bring order and clarity to the dispute process. They tell you why a dispute is occurring, so you can know what type of evidence you need in order to address it. Through chargeback reason codes, card networks improve the transparency involved in the dispute process.

How You Can Prevent Chargebacks From Happening in the Future

As a merchant, you can prevent future chargebacks by adopting a few proactive measures.

• Use an address verification service (AVS), device fingerprinting, and layered fraud tools.
• Create a clear, easy-to-find refund policy.
• Be flexible about returns and cancellations, so customers don’t have to resort to chargebacks.
• Make sure that your billing name is a name your customers will recognize.
• Communicate clearly about your shipping timeline.
• Consider processing payments when items ship if you expect shipping to be delayed.
• Offer excellent customer service.
• Create clear, accurate product descriptions.
• Send reminders before recurring payments are processed.
• Maintain excellent records.

How PayCompass Can Help You Minimize Disputed Transactions

PayCompass can support merchants through our state-of-the-art tools and guidance. Through our comprehensive chargeback prevention program and fraud detection, we can help you reduce disputes as much as possible. When disputes do occur, our documentation, logging, and dispute management tools can help you effectively navigate chargebacks.

Final Thoughts

Chargeback reason codes are an indicator of why chargebacks are occurring. If you see the same chargeback codes over and over again, it’s time to reevaluate your processes and make some changes. Through preventative measures, you can reduce the chargebacks your company receives and lower your payment processing costs. 

To learn more about credit card chargeback codes and the latest chargeback prevention tools, reach out to our payment processing experts today.