Understanding Chargeback Reason Codes and Fees

This article will help you understand why chargebacks happen, how to prevent them, and how to fight them.

Understanding Chargeback Reason Codes

When you plan to fight a chargeback with compelling evidence, it’s important to understand the reason the transaction was disputed in the first place. The chargeback reason code not only gives you insight into why the chargeback was filed but also what evidence is needed to successfully fight the chargeback. Below are the most common chargeback reasons.

Reason Code: Fraud

What it means:

• The customer may have had their card stolen, and this transaction was not authorized by them.
• The customer doesn’t recognize your business when your transaction appears on their billing statement.
• Friendly Fraud:  the cardholder may have not authorized the transaction, but someone related to them or with access to their card may have authorized it.

Reason Code: Service Not Provided/Merchandise Not Received

What it means:

• The customer purchased a product or service, and it was never delivered.
• The customer experienced a delivery delay and the product wasn’t delivered when they expected it.
• The customer’s package was lost or damaged during transit, resulting in the product not being delivered.
• The product was shipped to an incorrect address, either by the merchant’s mistake or the customer entering the wrong details.
• The customer received an incomplete delivery and part of the package is missing.

Reason Code: Canceled Recurring Transactions

What it means:

• The customer canceled their subscription but continued to see a monthly charge on their statement.
• The customer attempted to cancel their subscription, but the process was too difficult.
• The customer misunderstood a free trial that rolled into a monthly recurring transaction.
• The customer could not get a hold of the merchant to cancel their subscription.

Reason Code: Not as Described or Defective Merchandise

What it means:

• The customer received their order, and it was broken or incomplete.
• The customer received their order, but it did not match the description of what they purchased online.
• The customer received their order, but it was a different item than what was ordered.
• The customer received counterfeit goods.
  
  

Reason Code: Refund Not Processed/Duplicate Transaction

What it means:

• The customer was promised a refund, but the funds were never refunded.
• The customer had a refund processed but did not receive the refund in a reasonable timeframe.
• The customer has more than one transaction for the same amount for the same purchase.
• The customer was charged twice for the same transaction but with two different payment methods (paid in cash but also had their card charged)

Now that you’re familiar with chargeback reasons, you’re ready to dispute your chargeback with confidence and all the right compelling evidence.

For any questions or assistance responding to disputes, contact Payments support.

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Understanding Chargeback Fees

When a customer files a chargeback on a transaction, the transaction total is debited back from you and a temporary credit is given to the customer. A chargeback fee is incurred for each chargeback received. This fee helps cover the costs of processing the chargeback, investigating the dispute, and any other related expenses

For more information about chargeback fees, please contact your Customer Success Manager.

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