Chargeback reason codes
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Chargeback reason codes
Gain a better understanding of the nature of your chargebacks and effectively manage them

The chargeback reason codes were established to standardize the list of acceptable reasons a bank may submit a card chargeback or a direct debit chargeback on behalf of its customer.

These codes are assigned by issuing banks at the creation of a chargeback, based on the nature of the issue. Understanding the specific reason for a chargeback is crucial for merchants to identify improvements in their business practices to prevent future chargebacks.

Reason codes are essential in the chargeback process and serve as a vital tool for both merchants and card issuers in managing disputes and maintaining trust in the payment system. Below are the details and classification of these codes for the four major card schemes.

It’s important for merchants to be aware of the time limits associated with chargeback reason codes. These time limits determine how long a cardholder has to initiate a chargeback following a transaction. Each card scheme sets its own time limits for chargeback disputes, typically ranging from 60 to 120 days from the transaction date. Chargebacks initiated outside this timeframe may be rejected by the issuing bank, allowing the merchant to retain the funds.

Visa

Visa’s Reason Codes follow a format of two digits, a period, and a third digit. The first two digits indicate which category the reason code falls under: 10 for Fraud, 11 for Authorization, 12 for Processing Errors, and 13 for Customer Disputes. The third digit indicates the specific reason within this category.

Fraud

Authorization

Processing errors

Customer disputes

Mastercard

Instead of having a different code for each individual reason like the other card networks, Mastercard uses a single code for all Authorization-Related Chargebacks, one for all Point of Interaction Error chargebacks, and one for all Cardholder Disputes chargebacks. Mastercard’s reason codes are listed as four-digit numbers, with all initial chargebacks received by the merchant beginning with 48. For transactions processed through the Single Message System, the 48 is omitted, leaving only the two digits that indicate the reason code.

Fraud

Authorization

Point of Interaction Error

Customer disputes

American Express

American Express has a more extensive list of reason codes, consisting of a letter followed by two numbers. The letter signifies the category: A for Authorization, C for Card Member Dispute, F for Fraud, and P for Processing Errors. Codes beginning with R indicate the merchant’s response (or lack thereof) to a request, while M indicates the merchant authorized the chargeback. The two-digit number specifies the exact reason.

Fraud

Authorization

Processing errors

Inquiry/Miscellaneous

Customer disputes

Discover

Discover’s reason codes do not follow a specific pattern, mostly being two-character codes. For instance, in the fraud category, all codes start with UA (Unauthorized) followed by two digits. While some codes are intuitive, like NA (No Authorization) or EX (Expired Card), others like AW (Changed Amount) and AA (Cardholder Does Not Recognize) may not be immediately clear.

Fraud

Authorization

Processing errors

Not classified

Expired

Customer disputes

Dispute compliance