Understanding of MasterCard Chargeback Reason Codes

Now we are very familiar with the word ‘Chargebacks’ from the expert at Chargeback Expertz. Let us now get information about the basic explanation about MasterCard Chargeback Reason Codes. It will occur due to system error and fraud. Let’s see how to get prevention against a chargeback. In routine life, we shop many things – grocery, tickets, dining and many more things and we check these expenses while paying weekly or monthly bills from our card. Sometimes, cardholder finds that he/she didn’t purchase or take service and that bill is included at our expense. At that time, credit card holder disputes against that charge. If any merchant’s transaction volume is high, then it is necessary to take cautious steps to decrease the rate of Chargeback.

 

Overview of Chargeback Reason Codes :

Each transaction or deal has a unique receipt no. or order no. When any Chargeback occurs, that will be identified by the specific code. These numeric codes are varied by card network but serve the same purpose. It specifies the cause of dispute between the issuer and the merchant. The merchant should see each Chargeback as a learning experience for future business deals. There is some precise chargeback reason codes, particularly for MasterCard holder :

To apply for the Chargeback, the issuer must submit the First Chargeback or 1442 Message with the application Reason Code. Generally, the issuer can apply for the first chargeback for an applicable transaction within the decided time frame for the chosen Chargeback Services with Reason Code. Basically, the Chargeback time frame includes 180 days period.

 

Causes of Chargeback :

Let’s categorize Chargeback frauds by their three main causes – merchant error, criminal fraud and friendly fraud. The Chargeback Management System becomes more efficient by doing this categorization.

 

Codes Chargeback Reason

4801 Requested transaction data is not received

4802 Required information is illegal or missing

4808 Required authorization not obtained

4831 Transaction amount is different

4834 Duplicate order process

4835 Card is not valid or expired

4837 Fraud/No cardholder authorization

4840 Fraudulent transaction

4841/4850 Credit posted as purchase

4855 Nonreceipt of merchandise

4859 Service not rendered

4860 Credit not processed

4863 Cardholder does not recognize – Potential Fraud

4870/4871 Chip/PIN liability shift/ Counterfeit transaction

  1. Merchant error: There are several Chargeback related to merchant services than any other category and most of them are preventable. These errors are sorted by some of these codes: 4802, 4803, 4841, 4850, 4855, 4870, 4871 and many more. By doing best business practices and little extra efforts, any merchant will reduce chargebacks or profit loss.
  2. Criminal fraud: Unauthorized activity or criminal fraud is recognized as potential fraud and you should take the necessary steps to stop chargebacks. These frauds are sorted by codes: 4870, 4871, 4837, etc.
  3. Friendly fraud : Mistreatment, neglect of customer requirement – these all chargeback abuse are done by non hostile enemy known as friendly fraud. The fraud might have done accidently, while the consumer set out with intention to get something free. These codes are : 4855, 4841, 4850, 4863, 4837, etc.

 

The management of chargeback is complex and difficult, but using management efforts, it may be reduced.