Each chargeback received a numeric code which is known as the “reason code”. Reason codes are just what they sound like, an identification code used to categorize why a transaction is being refuted by the card holder. These codes are given by the card issuer at the point of time that the customer disputes a given transaction. This system of codes helps both merchants and the payment acquirer to diagnose errors and improve overall customer satisfaction. Below is a generalized list of Visa and MasterCard reason codes.

Merchants need to pay special attention to the reason codes on the chargebacks they receive to help better understand their business. By reviewing your chargebacks it’s possible to determine, for example if you have an issue with your warehouse where it’s common for your shipments to either have the wrong product or constantly arriving late. This can be determined by looking at the specific reason codes tied to each of the disputed transactions.

Reason codes vary by bank network, but fall in four general categories:

• Technical - Expired authorization, non-sufficient funds, or bank processing error.
• Clerical - Duplicate billing, incorrect amount billed, or refund never issued.
• Quality - Consumer claims to have never received the goods as promised at the time of purchase.
• Fraud - Consumer claims they did not authorize the purchase, or identity theft.

Fraudulent Transactions & Other Chargeback Types

One of the most common and damaging reasons for a merchant to receive a chargeback is because a transaction was processed on their site without actual card holder authorization. In cases such as this the merchant is held responsible for the charge. Mostly, fraudulent card transactions originate with criminals who gain access to secure payment card data and set up schemes to exploit that information by buying goods with the stolen cards.

Chargebacks can also result from a customer dispute over credit. This type of chargeback is usually described as credit not processed. A customer may have returned merchandise to a merchant in return for credit, but credit was never posted to the account. In this example, the merchant is responsible for issuing credit to its customer, and would be charged back.

Other types of chargebacks are related to technical problems between the merchant and the issuing bank, whereby a customer was charged twice for a single transaction (duplicate processing) or other various mistakes.
Another reason for chargebacks is when a customer does not receive the item they paid for. In this case, a chargeback is initiated and the payment to the merchant is reversed.

This is just scratching the surface of why and how chargebacks can be filed. But, most importantly it’s key to remember that chargebacks need to be reviewed and monitored to ensure you’re not unnecessarily losing money and being taken advantage of.

Reason Codes:

**Visa Chargeback Codes**

• 30 Services not provided or Merchandise not received
• 41 Cancelled recurring transaction
• 53 Not as Described or Defective merchandise
• 57 Fraudulent multiple transactions <-- Impacted by new Visa rule change April 2011
• 60 Requested copy illegible or Invalid
• 62 Counterfeit transaction <-- Impacted by new Visa rule change April 2011
• 70 Account number on exception file
• 71 Declined authorization
• 72 No authorization obtained
• 73 Expired card
• 74 Late presentment
• 75 Cardholder does not recognize transaction
• 76 Incorrect transaction code
• 77 Non-matching account number
• 79 Requested transaction information not received
• 80 Incorrect transaction amount or account number
• 81 Fraudulent transaction (Card present) <-- Impacted by new Visa rule change April 2011
• 82 Duplicate
• 83 Fraudulent transaction (Card not present) <-- Impacted by new Visa rule change April 2011
• 85 Credit not processed
• 86 Paid by other means
• 90 Services not rendered (ATM or Visa travel/money)
• 93 Risk identification service (RIS)
• 96 Transaction exceeds limited amount

**MasterCard Chargeback Codes**

• 4801 Requested transaction information not received
• 4802 Requested / Required information illegible or missing
• 4807 Warning bulletin file
• 4808 Requested / Required authorization not obtained
• 4812 Account number not on file
• 4831 Transaction amount differs
• 4834 Duplicate processing
• 4835 Card not valid or expired
• 4837 No cardholder authorization
• 4840 Fraudulent processing of transaction
• 4841 Canceled recurring transaction
• 4842 Late presentation
• 4846 Correct transaction currency code not provided
• 4847 Requested/Required Authorization Not Obtained and Fraudulent Transaction
• 4849 Questionable merchant activity
• 4850 Credit posted as a purchase
• 4853 Cardholder disputes - Services / merchandise defective or not as described
• 4854 Cardholder disputes - Not classified in other category (US cardholders only)
• 4855 Non receipt of merchandise
• 4857 Card activated telephone transaction
• 4859 Services not rendered
• 4860 Credit not processed
• 4862 Counterfeit Transaction - Magnetic stripe POS fraud
• 4863 Cardholder does not recognize - potential fraud (US Only)
• 4870 Chip Liability Shift
• 4871 Chip/PIN Liability Shift
• 4999 Domestic Chargeback Dispute (Europe Region Only)