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Chargeback Reasons

A chargeback occurs when a customer contacts a credit card Issuing Bank to initiate a refund for a purchase they made on their credit card. The reasons why chargebacks arise can vary greatly but generally, they are the result of a customer being dissatisfied with their purchase.

The most common reasons for chargebacks and how to resolve them are as follows:

1. Cancelled recurring transaction (Visa/MasterCard Reason Code: 41)
Merchant continued to charge cardholder’s account for recurring transaction after receiving a notice of cancellation.
Note: for merchants with variable recurring transaction amounts. When you set up the customer’s recurring billing, you should have disclosed that this charge would be for a variable amount and permitted the cardholder to set a range of approved charges. If a charge exceeded this amount and you did not notify the cardholder in advance, they are able to successfully dispute the charge using the above reason code. If the customer disputed the charge using that reason code, we recommend you contact the cardholder directly to obtain payment and determine if this recurring service should be cancelled.

Tips to Solve:     Provide the documentation by the due date to preserve your rights.
Represent the chargeback regardless of whether the customer states they will cancel the chargeback (to preserve your rights).
Issue credits to the account used in the purchase and not by check or money order.

2. Service not provided or merchandise not received (Visa Code: 30, MasterCard Code: 55)
Cardholder acknowledges participating in the transaction and claims one of the following occurred:
Cardholder did not receive merchandise or other item of value that was shipped
Merchant was unwilling or unable to provide purchased services
Services were paid for using another method
Cardholder did not receive merchandise at the agreed upon location or by the agreed upon delivery date.
If the credit issued was a partial credit, be sure to include an explanation as to why full credit was not issued.

Tips to Solve
If available, provide a signed delivery receipt or similar document by the due date to preserve your rights.
Represent the chargeback regardless of whether the customer states they will cancel the chargeback (to preserve your rights).
Issue credits to the account used in the purchase and not by check or money order.

Duplicate processing (Visa Reason Code: 82, MasterCard Reason Code: 34)
;A single transaction was presented two or more times to the issuer for the same cardholder account number, similar transaction amounts and similar clearing data. If the same transaction was processed by different acquirers, the issuer is required to dispute the transaction that posted last.

For express payment service (EPS) or small ticket transactions, the amounts must be the same.

Tips to Solve
Provide two different signed receipts or invoices. If sales receipt does not contain detail of items purchased, include an itemized list.
For Contactless and Small Ticket transactions, signatures are not required just detail of what was purchased.

Fraudulent multiple transactions (Visa Reason Code: 57)
The issuer receives a written complaint from its cardholder who acknowledges participation in at least one transaction at the same merchant location where the other transaction(s) allegedly involving the cardholder took place, but states that:
He/she neither participated in nor authorized the other transaction(s), and
The card was in his/her possession at the time(s) of the other transaction(s).

Tips to Solve:
Always keep a copy of the signed sales draft and or invoices for all transactions that the cardholder participated in, provide to the issuer when requested.
No authorization (Visa Reason Code: 72, MasterCard Reason Code: 47)
Transaction exceeds the floor limit and an authorization was not obtained on the transaction, or transaction is an online check card transaction or an original adjustment.

Tips to Solve:
Authorization code along with date and amount of authorization, if other than the transaction date and amount.
Incorrect transaction amount or account number (Visa Reason Code: 80)
Used under any of the following circumstances:
Merchant processed an incorrect transaction amount
Merchant processed an account number that did not match the one on the transaction receipt
Cardholder’s transaction receipt contains an addition or transposition number
Transaction receipt was altered without cardholder’s permission.

Tips to Solve:
A signed sales receipt with imprint or swipe to show that cardholder agreed to the amount or that card number was correct. A written rebuttal is required if amount was altered after cardholder signed the receipt.
Fraudulent transaction – Card-not-present environment (Visa Reason Code: 83)
A transaction was processed in a card-not-present environment without the cardholder’s permission or with a fictitious account number.
Also may be used on an e-commerce transaction in which the issuer responded to an authentication request with the CAVV but the acquirer did not provide value in the authorization request.

Tips to Solve:
Invoice with ship to/bill to addresses, AVS results, CVV2 results if applicable, and signed proof of delivery.
If T&E, proof that the sale was a properly processed “no show” transaction.

Credit not processed (Visa Reason Code: 85, MasterCard Reason Code: 60)
The merchant issued a credit transaction receipt or refund acknowledgement but the transaction was not processed through interchange, or
The cardholder returned merchandise or cancelled a sale but did not receive a credit receipt or refund acknowledgement.

Tips to Solve:
A written rebuttal addressing the cardholder’s claim and any supporting documentation to prove the case, such as a signed contract or return policy.