Amex Reason Code- C32 - Goods or Services you Purchased are Defective

Issuing bank received a complaint from the customer that goods or services he purchased are defective, damaged or not fit the expectation of the customer. Customer claims that policies explained verbally by the merchant during purchase were different and that what he received was different than expected.

Some Causes

• Wrong merchandise/goods sent to the cardholder.
• During shipment, goods got damaged.
• The goods or services were described inaccurately.
• The services purchased by the cardholder weren’t canceled on time.
• The services did not perform as it was described.
• The returned merchandise was not accepted by the merchant.
• The returned merchandise accepted but merchant did not issue a credit to the cardholder.
• Counterfeit consumer goods.

Necessary Evidence

• If goods were returned or services were canceled, the merchant must provide the bank with all the information or evidence of the refund.
• If the merchant hasn’t received the returned goods or the cardholder has not canceled the service, inform the bank. The cardholder must make a valid effort to return merchandise or cancel the service. The merchant must ensure that the incoming shipments are recorded to later verify.
• If the cardholder’s complaint is legal and the merchant has received the goods, but have not refunded the amount, he must accept the chargeback. Do not process a credit until the chargeback has performed this function.
• If the goods were accurate and as described, provide the merchant bank with specific information and invoices to deny the cardholder’s claims.
• If merchandise was damaged and it was returned, provide evidence that it was repaired or replaced.

How to do Prevention?

• Make sure that the policies regarding the merchandise or services are explained clearly, these should be delivered in the manner they are supposed to be delivered or as mentioned in terms and policies.
• Make sure that orders are placed correctly and arrived perfectly. It must be reviewed and checked regularly during the delivery process.
• The staff must be trained from time to time on how to accurately file an order.
• The buyers must be notified of every cancellation request, credit or refund in order to reduce the possibilities of chargebacks.

Related Example-

Linda bought few beauty products online, however, upon arrival she finds few broken pieces in her kit. She decides to return the kit but the time passes by and she forgets to return it on time. She speaks to the merchant if she would be refunded or allowed to return the product after the dues date. Merchant refuses as the policy doesn’t accept returns after 30 days. Linda finds it difficult to use the product as decides to dispute the transaction in the hope of winning the chargeback under the Reason Code C32: Goods/Services Damaged or Defective

MasterCard Chargeback Reason Code 4849 - Questionable Merchant Activity

Description

Mastercard has been issued a global liability shift program for ecommerce transactions. A chargeback is filed for this reason when an acquirer bank processed a transaction for a credit card accepted and later recognized in the list of Mastercard violation.

Most Common Causes

The merchant:

• The transaction falls under the Global Security Bulletin of Mastercard.
• The acquirer name, acquirer ID, merchant name and its location are listed in the Global Security Bulletin under Global Merchant Audit Program (GMAP).
• The issue is not resolved within the time frame specified in the procedure manual and in security rules.
• The issuer did not report the transaction under SAFE within the time frame.
• The transaction is not processed within the specified period in merchant agreement.

Evidence Required

• If the first chargeback was correct and the acquirer bank failed to change the dispute properly, the issuer may continue the chargeback with the same reason code originally processed.
• If the acquirer bank lost data file requested submit the form found in the back of the procedure manual and security rules.
• If the situation requires any other reason, the issuer must process the arbitration chargeback using the proper reason code.

Prevention

• Process all the transactions at hybrid terminals.
• If found counterfeit fraud reports it to SAFE product user guide of Mastercard.
• Keep a record in a chip transaction and authorization message request should be approved by the issuer.
• Time frame for these chargebacks is 120 calendar days from the Global Security Bulletin publication date.
• If you’re looking any kind of information Chargeback Reason Code. You’re in the right place. Get more information visit website – Chargeback Reason Code

Exceeds Floor Limit – Not Authorized and Fraudulent Transaction - RC 4847

Merchant was unable to verify the authorization code of the transaction at the time of purchase. A card-not-present transaction occurs when cardholder files a complaint that he/she neither participated nor authorized a particular charge. A card-not-present transaction occurs on a fictitious account number on which owner’s authorization was not obtained. Telephone sales, mail-order, Internet/online sales, monthly subscriptions, recurring and prepayment transactions are examples of card-not-present transactions. Mostly this situation occurs when someone fraudulently uses someone else’s credit card and processes card-not-present transaction without the consent or permission of the cardholder. Sometimes, cardholder does not recognize a card-not-present transaction on his statement because of the invisible, unclear or confusing merchant or product name.

Most Common Causes

• POS device was not authorized for strip-read, online and face-to-face transactions, but only card-read or key-recorded transactions.
• The transaction was not approved.
• The card provided a service code of X2X (Positive Online Authorization-Only), but the transaction was not approved.
• The transaction amount passed the limit from the floor limit that was installed by MasterCard at the time of purchase and was not approved.
• The authorization request was denied or the transaction was made by an expired card.
• If not authorized by Technical fallback and CVM fallback transactions.
• The merchant processed a fictitious account number on which card owner’s authorization was not obtained.
• The merchant processed a transaction card owner did not participate in.
• The transaction is processed on the invalid card using an account number.
• A family member ordered from the primary cardholder’s account without his permission.
• It is also caused by the owner of the card not able to recognize purchase on the billing statement.

Evidence Required

• The merchant should provide the document that business did not need to authorization.
• The merchant may present the document that the cardholder obtained authorization for the transaction amount.
• Providing the amount that was authorized, authorization approval code, and the date of the authorization the merchant should document the incomplete authorization
• The transaction was below the issued floor limit and there was communicate failure to buyer or failure to POS device at the time of buying, the merchant should present document.

Prevention

• Make sure to obtain an authorized approval for all the e-commerce and recurring transactions regardless of the dollar amount.
• Read back the account number, especially for transactions made via phone. Always verify account number so that there are no errors or misunderstandings.

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Chargeback Reason Code - 4831- Account Number Mismatched

The buyer’s bank found incorrect transaction amount or account number mismatched with the posted information with them and the information on the order receipt. The transaction was processed with the incorrect account number, incorrect transaction amount and/or had an error while calculating transaction amount without cardholder’s permission or the merchant altered amount after the order was processed without notifying to the cardholder.

Most Common Causes 
If the merchant

• Entered wrong account number.
• Entered wrong transaction amount for that particular transaction.
• Altered the amount after getting the signature from the customer.
• Made a mistake while calculating the amount.
• Exchanged the amount after completing the transaction without taking permission from the cardholder.
• Increased the transaction amount without getting any consent from the cardholder.

Evidence Required

• Provide documents to the acquirer bank describing the product, the transaction amount and the account number on the order receipt are same as acquired information.
• Accept the chargeback, if account number or transaction amount is different from the order receipt and the information posted.
• If disputed chargeback for the incorrect transaction amount, the merchant should process a new transaction within 30 days from the original date, however, if chargeback already has performed its function never issue a refund for that particular transaction.
• No action needed if the customer dispute chargeback for the incorrect amount.

Prevention

• If the business accepts cards, swipe it or manually enter the account number, however, make sure that the account information is used from the face of the card on the order receipt.
• Ensure to use a standard printer to print the order receipt.
• If the cardholder has signed an order receipt, the merchant should not exchange or alter it.
• If chargeback was imposed on an incorrect amount, the merchant must try to communicate with cardholder to adjust the order receipt to show up the correct amount.
• Compare the key-entered to make sure that the transaction information typed is accurate.

Common Examples

Linda went grocery shopping and swiped her card to make the purchase. She didn’t realize and hit the option “yes” to the question if the amount was correct. Later she tallies her bill and cross-checks the amount to find out that ten more dollars have been added to the bill. She, therefore, goes ahead and disputes the charge with the help of her bank under the Reason Code 4831: Transaction Amount Differs

MasterCard Chargeback Reason Code - Account Number Not on File

When the charged credit card number doesn’t match to the actual card number used by the buyer bank. If the merchant provides documentation such as the print of the credit card showing accurate credit card number, magnetic stripe reading evidence and authorization or proof of credit issued, the chargeback may be reversed. Carefully recording the card number, properly entering key or swiping the card through the terminal can reduce chargebacks.

Most Common Causes

• The transaction was lesser than the applicable limit and authorized offline by the chip. The Cardholder Verification Method (CVM) provides pin signature or doesn’t flash anything if recognized by the card parameters.
• As revealed by Investigation, if appropriate account number was not entered on Electronic Warning Bulletin as prior to the payment to the merchant.
• If transaction recognized and authorized as a non-face-to-face sale and primary presentment was submitted using the correct account number.
• If transaction processed using the retired account number and later received an authorization.

Evidence Required

• Copy of printed Transaction Information Document.
• The merchant bank must provide adequate documentation to verify the presence of the card for the transaction that occurred at the point of Interaction (POI) terminal, which was not authorized at the point.
• If payment was made for an emergency, verify that the transaction was authorized, print authorization screen.

Prevention

• Always check the exclusion file before completing transactions below the floor limit. Most point of sell-out terminals automatically verifies the exclusion file when the card is swiped and the amount is entered.
• Merchant must verify with the acquirer to make sure their transaction-processing system automatically verifies the exclusion file for the under-floor-limit transactions and inform the sales staff to request for an approval if they are ever in suspicion of a transaction.
• Exclusion File transactions for the floor limit should be zero. All transactions require approval, regardless of the amount.

Common Examples

Linda checks her account once in a while. She does one day to find out a large amount of charge on her account that she doesn’t recognize at all. She calls the merchant through the descriptor and explains the situation. The merchant checks her information to find out that her account was mistakenly charged due to manual error and that she isn’t the person who bought services from them. Linda, therefore, disputes the charge under the Reason Code 4812: Account Number not on File

Card Issuer complaints authorization code was not accomplished.
The Merchant completed a Magnetic-Strip read transaction on a Visa Electron Card or a Visa Card in a registered positive Authorization Code account range and did not obtain Authorization.

Most Common Causes
In Europe Region (Intraregional Transaction), a Card with a Service Code that indicated either the card was invalid for the transaction type or online authorization was required.
Authorization was not accessed on a card in a service code limit.

Evidence Required

• Documentation to prove that the Service Code was valid for the Transaction or Authorization was obtained.
• Documentation to show that the account was not in a registered positive Authorization account range. This does not apply to a Visa Electron Card Transaction.

Prevention:
If transaction date and the transaction amount is different than the authorization date and authorization amount –

Chargeback Rights and Limitations

1. Minimum Chargeback amount:
a. For T&E Transaction, the US $25 or equivalent.
b. For Canada Domestic T&E Transaction, CAD $25
c. For all other Canada Domestic Transactions, CAD $10

Chargeback Time Limit
75 calendar days from the Transaction Date.

Re-presentment Time Limit
45 calendar days from the Chargeback Date.

Common Examples:
Linda lives in Amsterdam and is visiting her grandmother in Rome. She buys a beautiful necklace for her on the way in Austria. After a few days, the merchant from whom Linda bought the necklace receives a chargeback from her bank under the Reason Code 78: Ineligible Transaction/ Service Code Violation. The merchant gets confused and offers to provide the documentation proving that Linda’s card was a valid card and that authorization was approved at the point of sale. Get more information visit website – www.chargebackexpertz.com

Excellent Guidance for Chargeback Visa Reason Code 75

Issuer receives a complaint from the credit cardholder that the charge on his billing statement is not recognized. In other words, the customer is not aware of the particular transaction or the information on the statement does not belong to him, not correct or not recognizable.
This reason code is applicable to card present as well as card-not-present orders.

Most Common Causes

• If the cardholder’s billing statement is incorrect, i.e. the merchant store name or location is not recognizable or not matching to the information cardholder provided earlier to the merchant.
• If the buyer has forgotten the particular order.
• The customer is looking for a refund but he or she doesn’t want to go through the regular process.
• The cardholder does not recognize the billing descriptor.
• If someone else like family member used the card and cardholder is not aware of the transaction.

Evidence Required

• The cardholder has provided documentation and information that would help in recognizing the transaction. For example: Purchasing slip, Proof of Delivery or Delivery Note, Detail of trade or service purchased.
• An important factor while accepting cards. Ensure the name of the merchant, city and state is correct in the records. Also, mentioning “doing Business as” DBA is critical.

Prevention

• If the billing descriptor is set, then the chances are that the merchant won’t face such problem. In case merchant notices that disputes are increasing day by day, then it is better to check transaction procedures and contact processor so that the merchant account reflects the information that the cardholder will recognize.
• There should be a toll-free customer service number in the billing description. Ensure that the provided billing description is accurate and recognizable to the cardholder.
• Contact information should be mentioned clearly. This is the best way to communicate with the merchant and the cardholder. When cardholder does not recognize provided information or finds it difficult to reach the merchant, chances of dispute arises.
• Providing full contact information i.e. company name, complete mailing address, email address, and customer service phone number is an essential key to fewer chargebacks.

Common Example

Linda is fond of shopping. She was browsing through a number of online clothing store one day and spontaneously decides to buy few things from a store. A few days later she checks her account and finds out an un-recognizable charge. She tries to reach to the merchant but is unable to due to lack of descriptor, so she decides to put a dispute on the account under the Reason Code 75: Cardholder doesn’t Recognize

How to Manage Chargeback Reason Code 73?

Description

A transaction completed with an expired card i.e. unauthorized. Such transactions commonly do not receive an authorization approval from the buyer’s bank so—the merchant must not accept any card after the expiration date.

• If the card expires before the transaction date and doesn’t get the authorization.
• If the authorization approval was obtained but the card had expired.

Evidence Required

• The expiration date should be imprinted in front of the card. If the expiration date on the purchasing receipt shows the card had not expired at the time of the sale, send a copy of the purchasing receipt to your merchant bank. The chargeback is unacceptable neglectful of whether authorization was obtained.
• Inform your bank of the transaction date and amount, if the card was swiped or manually imprinted, and authorization approval was acquired. This type of chargeback automatically handles several merchant banks and the merchant never sees it.
• You did not get an authorization until the card has expired, accept the chargeback.
• A card is valid through the last day of the month shown so—the merchant should check the expiry date on all the cards. (e.g. if the date is 05/20, the card is valid through May 31, 2020 and expires on June 1, 2020.)
• Point-of-sale staff to check the expiration date of card before completing transactions regularly and if the card has expired, always get an authorization approval.

Prevention

• Merchant must always check the whether the expiration date provided by the cardholder is correct or not, if the transaction was a MO/TO or Internet transaction.
• The merchant should always check the expiration date on all cards. A card is valid through the last day of the month as shown.
• Always request an authorization for the card-not-present transaction.

Common Example

Linda is a merchant who is into electronic business. She has a decent website on which she sells screen guards and protectors for almost all the electronic devices. One fine day, one of her employees received a telephone order for a tablet screen protector. He took all the details but missed that the card with which the customer placed an order was expired. Linda realizes the mistake of her employment when she receives a chargeback from the buyer’s bank under the Reason Code 73: Expired Card. Get more information visit website – www.chargebackexpertz.com

Visa Chargeback Reason Code 62: Counterfeit Transaction

The bank received a written complaint from the customer claiming he did not authorize or participate in the transaction. In other words, the transaction was made with a forged credit card.

Buyer refused any participation or authorization in such transaction and claims his card is misused without his permission.

Most Common Causes

When the Merchant:

• Failed to compare the first four digits of the account number on the front of the card with the digits printed below or above the account number.
• Did not record the digits printed below or above the card on transaction receipt.
• Accepted a chip card, but processed the payment as a retreat transaction, via swipe, key-entry, or did not follow exercisable acceptance mechanics, or paper voucher.
• Received an authority approval without transmitting all expected data.

Evidence Required

• If the transaction was false , accept the chargebacks.
• If the card was swiped and transaction authorized at the point of sell out, provide your acquirer with a copy of the printed sales acknowledgment.
• Cardholder later denies authorization or participation in the Transaction.
• This chargeback may be reversed by providing an imprinted or swiped sales draft signed by the cardholder along with any other information connected to this transaction or proof that a credit came out.

Prevention

• Avoid fallback processing Choice (key-entered transactions, signature and provided card PIN)
• Check for other pointers on the card,Verify that the first four decorate numbers match the printed numbers on the visa card.
• If you key-enter a transaction because the magnetic strip cannot be read, be sure to get an imprint of the front of the card either on a manual sales receipt or sales receipt form, which should be undersigned by the customer.
• If you are suspected of a card or cardholder for any cause, inform your acquirer using the code for suspect or cheat.
• When a cardholder claims to have not authorized certain transactions. To prevent this type of fraud, the merchant should analysis all credit card securities before allowing the transaction to go through.

Common Examples

Linda went shopping with her friends on a long weekend holiday. The next day she checks her account to see how much she spent, but is left startled to see an unknown charge on her account. She contacts the merchant, but the merchant couldn’t help her remember the charge on which she thinks that her card has been forged and therefore files for a chargeback under the Reason Code 62: Counterfeit Transaction.

CREDIT CARD CHARGEBACKS 101: E-COMMERCE TECHNOLOGY

Getting paid via credit and debit cards is a great opportunity for merchants to grow their business, but it features some added responsibilities. Cardholders can dispute a transaction or deal up to 4 months after item purchase. This kind of dispute is termed a “chargeback.”

The term “chargebacks” applies to the process that takes place after a customer or buyer refuses to acknowledge the responsibility for a charge on his or her credit card or does not admit a credit or debit card purchase. This can be initiated by the issuing financial institution as a result of a technical concern, like no authorization approval code received. Chargebacks are something every entrepreneur wants to avert, as they can bring about loss.

The Reason Why You May Have Received a Chargeback

There are lots of logical reasons why chargebacks occur. Some of the most prevalent are when a customer:

Did not receive a product or service purchased.

Believes the service or product was damaged, defective or not as described.

Does not recognize the charge or business name on his credit card statement.

Was a victim of fraud—the credit card was used without consent or permission or even stolen.

What to Expect

The chargeback process involves several key players:

• The customer
• Issuing bank
• The payment brand (for instance Visa, MasterCard or America Express)
• The acquirer/processor (such as Charge.com, ACE Merchant Processing, Chase Paymentech, etc.)
• The merchant

If a customer claim is reasonable, the issuing bank is going to make a temporary credit payment to the customer and begins the chargeback process. Funds for the credit to the cardholder (customer) are debited from your merchant processing account during this process.

Ways to Prevent Chargebacks

Even though chargebacks are costly and unpleasant, they can be averted. The simplest way to prevent chargebacks is always to cultivate ideal practices or measures at the point of sale (P.O.S), which are implemented routinely by all personnel. For instance:

• At all times process a refund to the actual card number.
• Never refund by cash or check.
• If credit is due on multiple transactions, process each credit independently.
• Use a reliable merchant processing company.
• Have an effective chargeback management system. 

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How to Reduce and Manage Chargebacks for High Risk Accounts?

At any time, customer can file a chargeback under any reason code. Chargeback not only effect profits but also, the image of the business. Lesser the chargeback ratio better will be the reputation of the business. We, at Chargeback Expertz, provide tools and technology that prevents chargebacks and in case, you get one, we will help you fight that chargeback.

Chargeback Process

When a customer files a chargeback, this is done by opening dispute and asking issuer to reverse the charge. Then Credit Card Company will contact merchant’s bank who will notify merchant regarding the same. A detailed analysis and strategies are required to win a chargeback dispute. Chargebackexpertz provides merchant with the management tools to achieve substantial results.

Causes of Chargebacks

• Chargebacks can occur due to various reasons, but the most common ones are as follows:
• Item not received
• Item received is not as described
• Unauthorized transactions

Benefits Of Chargeback Expertz

• Reduced Risk
• Increased Profits
• Ensured Sustainability
• Customer Retention and Loyalty
• Recovered Revenue
• Improved Brand Name
• Improved Industrial Relationships
• Declined Chargebacks.

Tools and Strategies for Effective Chargeback Management

• Identify the source so that appropriate prevention technique can be applied.
• Management platform that audits, review and reports alerts.
• A customized action plan to reduce risk and chargeback issuance
• Challenge faulty customer behavior and friendly frauds

At Chargebackexpertz, we provide effective strategies to our clients to find the chargeback source, manage them and fight them in the most efficient way. The three major chargeback sources are:

• Merchant error
• Criminal fraud
• Chargeback fraud

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What is Payment Processor and How to Avoid Chargebacks?

Your payment processor can help avoid chargebacks using tools such as verified by Visa, CVV, and AVS for preventing frauds. In addition to these there are measures they consider to reduce number of chargebacks. Here are list of things that you can expect:

There are many players in overall process, the card brand, card owner, payment brand, processors, and the merchant. If customer has reasonable claim then card brand will send a temporary credit to the card owner and the process of chargeback starts. The funds are debited from merchant’s account during the process.

There will be a notification via mail, fax, or online management system about the chargeback. If you submit documentation on time and challenge the chargeback successfully in time assigned to you, then funds will be returned. But if documentations are not submitted, then you won’t get funds.

These were things that you can expect from banks that will handle your case, here is how your processor can handle your case and ensure to prevent chargebacks.

Processors helping business to avoid chargebacks

Blacklist: A list can help business owners to identify frauds, regardless of type of fraud committed. Merchants can enlist those who have caused trouble once. Merchants also have option to block cards that have been involved in some sort of fraud. Individual IP addresses, emails, or entire country can be banned. There aren’t many processors offering these facilities so merchants should check whether they have it.

Whitelists: Just like a blacklist, there is a whitelist that helps manage demographic of customers. A blacklist bans few individuals, but a white list bans entire population, allowing only few using a protective barrier. For example, a merchant may want to block all the countries except USA, UK, and Australia. Black and white lists help reduce risk and prevent transactions that merchant thinks will result in chargebacks. Consulting with the processor will help manage both white and black lists.

Limits: If a criminal try to run a card, it may go for many other purchases as well before detection. If there is one successful fraud attempt, then criminal will for sure want to try the same or different card. Having limits is essential because it help merchants monitor transaction frequency. For example, an IP address could be limited or prohibited from attempting to purchase for a short time. Velocity limits is type of tool usually provided by processor to control number of transactions.
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