Understanding Credit Card Chargeback Reason Codes

No ecommerce business wants to get hit with a chargeback, but almost every business is likely to experience them at some point. These refund requests can have serious repercussions on a company’s bottom line, reputation and ability to process credit card transactions.

Chargebacks have grown into a huge problem for retailers, costing the ecommerce industry about US$125 billion. Every $100 in chargebacks actually costs a company $240. That’s due, in part, to the work businesses must do to dispute them.


“Chargeback management typically falls on team members who have other jobs, which means they have to stop doing what drives the business to research transaction details, determine the correct process with the payment processor, and continue to monitor the process through disposition. That’s why many companies feel they need a full-time resource just to handle chargebacks.”


Chris Ballenger, CEO of ChargebackOps, a ClearSale Company


For enterprise and midsize ecommerce businesses, the allocation of a part-time resource might be possible. But small businesses already have a skeleton crew. Someone has to stop doing their day-to-day job to handle chargebacks.

It’s not surprising at all. Rampant fraud has forced companies to take a defensive stance against chargebacks.

Disputing Chargebacks Is No Simple Task

Not only is it time-consuming to fight a chargeback, but it can also be downright complicated. If you’re pulling resources from other teams, they’ll already be working from a disadvantage.

To win a chargeback dispute, you need expertise in several areas. 

How the Chargeback Process Works

Back in the days when payment methods were limited to credit cards and PayPal, the process was fairly consistent. Granted, you have to pay attention to timeframes. The time window for Visa is different than PayPal, but both publish their processes to make it a bit easier to follow.

With the introduction of alternative payment options, such as Klarna, Venmo and niche buy now, pay later solutions, the process isn’t so easy to follow.


“Many niche payment solutions use software that isn’t as well-tested as established card networks. There’s often no infrastructure for fighting a dispute or system that will tell you the status of a chargeback. In some cases, businesses are notified of a customer claim against a charge and are given an almost impossible timeline before the chargeback can no longer be disputed. It’s quite challenging.”

Alan Hubbs, COO of ChargebackOps, a ClearSale Company 


It’s also critical to know which transaction data will help make your case against a chargeback.

Which data is required to win a dispute?

Central to making a case against a chargeback is having the right documentation — evidence that the customer actually made the purchase. This can include business records, such as sales receipts, order forms and tracking numbers. Depending on the industry and type of product or service, you may need additional data, like:

  • Correspondence between the customer and the merchant’s customer service department
  • AVS and CVV match from the customer’s credit card
  • Geolocation
  • Saved email invoices
  • Saved transcripts/screenshots of all customer service communications
  • Proof the customer logged in, downloaded, viewed and used a digital order (using IP address)
  • Evidence the customer accepted the merchant’s service, return and refund policies
  • Documentation showing the customer was notified about any upcoming recurring purchases
  • Screenshots of a customer’s public social media account that shows the disputed goods being used

You also need to know deadlines.

How much time do you have to dispute a chargeback?

We mentioned earlier that the timeframes for various payment methods vary when it comes to chargebacks. In the United States, customers have as long as four months to raise the red flag about a charge on their statement. In countries like the United KingdomAsia and Europe, customers have even more time.

But ecommerce businesses have considerably less time to respond:

  • Visa gives businesses 30 days.
  • PayPal has a 10-day window for businesses.
  • Mastercard allows for 45 days.
  • American Express gives businesses only 20 days.
  • Discover has a window of 20 days.

Equally important is the need to understand why a chargeback has been initiated, which means you have to have at least a cursory knowledge of chargeback reason codes.


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Understanding Chargeback Reason Codes

Although each card network has its own chargeback reason codes, their end goal is the same: Clearly describe why a customer is disputing a transaction. And when companies recognize this, they’re better able to identify trends and areas of weakness, evaluate the legitimacy of chargeback claims, prevent future chargebacks, and improve customer satisfaction.

Here’s a list of the most common chargeback reason codes by processor.


Visa Chargeback Codes

Visa uses four main categories — authorization, consumer disputes, fraud and processing errors — to organize its chargeback reason codes.


Chargeback Reason



Declined Authorization


The cardholder claimed they declined authorization of the card-not-present transaction.

No Authorization


The business didn’t obtain a valid authorization.


Consumer Disputes

Chargeback Reason



Services Not Provided or Merchandise Not Received


A cardholder tells the card issuer they didn’t receive an order on time or at all.

Canceled Recurring Transaction


A customer asked a business to cancel a recurring transaction but the business failed to do so.

Not as Described/Defective Merchandise


A customer believed the product or service didn’t match the description or reported the product as damaged.

Counterfeit Merchandise


The merchandise was identified as counterfeit by the owner of the intellectual property, a government agency, or a neutral third-party expert.



The cardholder claims a purchased item or service was misrepresented and alleges false advertising.

Original Credit Transaction Not Accepted


The cardholder didn’t recognize the transaction based on the information provided on their statement.



Chargeback Reason



EMV Liability Shift Counterfeit Transaction Fraud


The cardholder claimed they didn’t authorize or participate in the transaction.

EMV Liability Shift Non-Counterfeit Fraud


The cardholder claims this activity was fraudulent but blames the merchant’s EMV terminal (card-present).

Other Fraud – Card-Present Environment


A fraudulent transaction was made using the actual credit card, according to the cardholder.

Card-Absent Environment


The cardholder claims an unauthorized transaction occurred without the physical card involved.

Visa Fraud Monitoring Program


Visa’s Fraud Monitoring Program flagged the transaction.


Processing Errors

Chargeback Reason



Incorrect Amount


The cardholder claimed the amount charged was not correct.

Duplicate Processing


The cardholder did make one purchase but the charge was duplicated without authorization.

Paid by Other Means


A single transaction was processed two or more times.


Mastercard Chargeback Codes

Mastercard chargeback reason codes are grouped into four major categories: Authorization, cardholder disputes, fraud and point-of-interaction errors.


Chargeback Reason



Authorization-Related Chargeback


The authorization code for the transaction at the time of the original sale couldn’t be verified.


Cardholder Disputes

Chargeback Reason



Installment Billing Dispute


The cardholder contested the installment billing charges.

Cardholder Dispute



The cardholder reported that the goods or services received were not as described/counterfeit.



Chargeback Reason



No Cardholder Authorization


Cardholders reported they didn’t initiate a transaction.

Questionable Business Activity


A business violated the terms of the Questionable Business Audit Program or threatened the cardholder if they refused to complete the transaction.

EMV Chip Liability Shift

EMV Chip/Pin Liability Shift



The cardholder claimed to not have participated in or authorized a transaction. For counterfeit transactions, liability remained with the party that didn’t invest in chip technology.


Point-of-Interaction Errors

Chargeback Reason



Point of Interaction Error


The cardholder paid twice for the same transaction using two different forms of payment.

Transaction Amount Differs


The cardholder claims the amount they agreed to pay differs from the amount charged.

Late Presentment


The issuer cannot verify that a transaction was deposited within 30 days of the date a valid authorization code was obtained.

Point-of-Interaction Currency Conversion


The cardholder claims the converted amount of charge on an international transaction is incorrect.

Duplication/Paid by Other Means


The cardholder is disputing a transaction because they paid using a different method than the merchant originally accepted.



American Express Chargeback Codes

American Express uses four main categories — authorization, processing errors, fraud and card member disputes — to classify their chargeback reason codes.


Chargeback Reason



Charge Amount Exceeds Authorization Amount


The charged amount was greater than the amount of the approval.

No Valid Authorization


There was no valid authorization approval for the charge the business submitted.

Authorization Approval Expired


The authorization approval expired before the charge was submitted.


Processing Errors

Chargeback Reason



Incorrect Charge Amount


The transaction amount the business submitted was different from the amount agreed to by the cardholder.

Late Submission


The business didn’t submit the charge within the established timeframe.

Duplicate Charge


A charge for a transaction was submitted more than once.



Chargeback Reason



No Card Member Authorization


The cardholder denied the charge, and the business couldn’t prove otherwise.

Card Not Present


The cardholder denied they placed an order online, by mail or over the phone.

EMV Counterfeit


The cardholder claims that they did not participate in a sale involving a counterfeit chip card. In this case, the sale was not processed as a chip transaction.

EMV List/Stolen/Non-Received


The cardholder claims that a fraudulent transaction was made using their actual American Express credit card.

Fraud Full Recourse Program


The charge was flagged by the Amex Fraud Full Recourse Program. This can happen to merchants in a high-risk credit card processing category.

Immediate Chargeback Program


This merchant program allows Amex to process disputes as soon as a cardholder files a chargeback.

Partial Immediate Chargeback Program


Amex placed the merchant in its Partial Immediate Chargeback Program. The cardholder files a chargeback with a merchant in this program.


Card Member Dispute

Chargeback Reason



Goods/Services Not Received or Only Partially Received


The cardholder claimed they didn’t receive the goods or services or only partially received the order.

Canceled Recurring Billing


The cardholder reported they canceled or attempted to cancel a recurring subscription for goods or services.

Goods/Services Not As Described


The cardholder claimed the goods or services received are materially different from the description provided at the time of the transaction.

Goods/Services Damaged or Defective


The cardholder says that they received defective or damaged goods. This can happen if there is damage during the shipping process.


ClearSale Offers End-to-End Chargeback Services With ChargebackOps Acquisition

How ClearSale Helps Companies Reduce & Dispute Chargebacks

Chargebacks may be chalked up to the cost of doing business for some companies, but the costs and risks of a dangerously high chargeback rate can mark the end of some ecommerce businesses – especially for small businesses.

You need a partner with options to meet your company’s specific needs. At ClearSale, we offer clients a suite of chargeback protection solutions catered to their unique needs and to safeguard their bottom line.

End-to-End Chargeback Management

Regardless of size, your ecommerce business may benefit most from comprehensive chargeback management that includes a chargeback reversal approach designed to recover financial losses. 

With our acquisition of chargeback management provider ChargebackOps, we can offer companies chargeback mitigation and resolution services including:

  • Training fraud analyst teams. 
  • Conducting data audits and gathering compelling evidence.
  • Drafting timely responses to banks and card issuers.

Where it makes sense, this approach also offers companies operational insights that can help improve internal processes that may be contributing to fraud risk and subsequent chargebacks.

By choosing a customized chargeback management approach, ecommerce businesses can also breathe a little easier knowing they’re protected against the increase in fraud attempts and poised for long-term financial success. Contact ClearSale today to learn more about our chargeback services.


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