Chargeback Reason Codes

Chargeback reasons vary and your merchant account provider will note every one that you get using a "Reason Code." There are six chargeback classifications that will be discussed in separate posts:

• Non-Receipt of Information


• Fraud


• Authorization Errors


• Processing Errors


• Canceled or Returned


• Non-Receipt of Goods or Services

By giving a reason code for a chargeback, your merchant processing bank is helping you identify the root cause of the issue that produced a chargeback. We will also provide additional information for each type of chargeback.

• Definition. As the name suggests, chargebacks are defined and explained. It will help you understand how your customer's card issuer sees the charged-back transaction and what prompted them to issue the chargeback.


• Most Common Causes. This chapter will look at the chargeback from the merchant's perspective - what has been done that resulted in a chargeback.


• Merchant Actions. This chapter will discuss the concrete actions that merchants can take to help their merchant services providers remedy the chargeback and prevent it from recurring in the future. In some cases it will be advisable to just accept the chargeback and move on, this will also be discussed. Included also are actions that specific departments within your organization should take.
  
  
  
  • Back-Office Staff. These are the people who perform the operational and administration duties, as well as chargeback processing, within your organization.
  
  
  • Point-of-Sale Staff. These are the staff members that accept your customers' payments. In a card-present environment, they operate at a cash register and in a card-not-present environment they are responsible for reviewing and authorizing the electronically accepted orders.
  
  
  • Owner/Manager. The leaders of your organization are responsible for establishing the policies and procedures, as well as the management of the company and training of the personnel.
  
  
  
  

The action that a member of each of these groups should take is further classified by action type as follows:

• (PR) Possible Remedy. These actions concern the possible steps that can be taken to provide merchant account processing companies with supporting evidence in the representation process.


• (NR) No Remedy. In such cases you should simply accept the chargeback and move on, without losing any time and resources on a lost cause.


• (PM) Preventive Measures. After evaluating the cause of a chargeback, with the help of your credit card payment processing provider, you should implement certain measures to prevent this type of chargeback from recurring in the future.


• (CS) Customer Service. Your customer service department can usually address the underlying issue before it deteriorates to the point of generating a chargeback.