risk control tool
Reason code query for chargeback
What is the reason code for chargeback?
A deep understanding of chargeback reason codes can effectively and continuously reduce chargebacks and lower the chargeback rate
The chargeback reason code is a code (usually two to four digits) provided by the issuing bank to match the reason for chargeback disputes when the merchant receives such disputes. It is used to determine the reason for the chargeback dispute
The chargeback reason code serves as a crucial tool for merchants in handling chargeback disputes. It assists merchants in swiftly pinpointing issues, comprehending the underlying reasons, and implementing appropriate measures to resolve them
Chargeback Reason Codes by Card Network
Each international card scheme, including VISA, MasterCard, American Express, etc., has its own reason code system. Although the chargeback reason code systems vary across different card schemes, the underlying reasons for chargebacks are essentially the same
Regardless of the name or numerical combination used, these reason codes mostly share the same fundamental purpose: to identify and describe the underlying motivations behind transaction disputes
Reason code for American Express chargeback
The chargeback reason codes for American Express (AE) are similar to those of VISA, utilizing four categories, with an additional “Other” category added
For example, “No Cardmember Authorization” corresponds to reason code F14; “F” stands for the “fraud” category, and 14 represents a specific claim
Discover chargeback reason code
Unlike the other three decks, Discover uses a reason code system arranged alphabetically
Some reason codes are easily identifiable. For instance, the reason code “DP” stands for “Duplicate Processing”. However, others are harder to recognize at a glance, such as “RM” which represents “Quality Discrepancy”
What is the purpose of a chargeback reason code?
The chargeback reason code can assist merchants in determining the reason for the chargeback received, enabling them to take appropriate measures to resolve the chargeback and prevent similar chargeback disputes from arising in the future
Most chargebacks can be traced back to the following four reasons: fraud, authorization issues, processing errors, or customer disputes
Conduct a periodic inventory of the received chargeback disputes to see if they are concentrated in specific categories. Then, targeted measures can be taken to address these recurring issues
Analysis like this can help you improve customer satisfaction and reduce the chargeback rate
Merchants who continuously receive chargebacks due to unauthorized transactions should conduct transaction security checks. Implementing anti-fraud management or other risk control solutions, such as 3DS authentication, during checkout can effectively reduce such chargebacks.
If you receive a chargeback due to buyer dissatisfaction, you should inspect your product quality, customer service processes, and other procedures. Are there any delays in shipping or packaging errors? Is the product quality consistent? Have there been any excessive marketing promotions?