Understanding Chargeback Reason Codes

Justt Understanding Chargeback Reason Codes

When preventing and fighting chargebacks, it’s important merchants know their cause. If merchants don’t understand the reason for a chargeback, they cannot determine whether to fight it and what evidence to submit or whether to let it go.

determine whether to fight it and what evidence to submit or whether to let it go

This is where reason codes come to the rescue. While reason codes don’t give all the details about a chargeback, they are crucial in fighting chargebacks successfully, and merchants should become  familiar with them.

What is a reason code?

A reason code is an alphanumeric string of text an issuing bank attaches to a chargeback dispute to explain its cause. Major card networks including Visa, MasterCard, Discover and American Express have different reason code systems. Some payment service providers like PayPal and Stripe have their own reason codes as well. However, issuing banks categorize disputes based on the card network.

Four reason code categories

Reason code categories have evolved over the years, and more changes are expected in the future. The two largest card networks,Visa and MasterCard, group theirs into four:

Four reason code categories justt.ai
  • Authorization
  • Consumer Disputes
  • Fraud
  • Processing Errors

American Express and Discover include other categories as well, such as “Inquiry/Miscellaneous” and “Service Dispute.”


Authorization disputes are associated with authorization problems. For instance, in transactions where authorization was needed but wasn’t received. This category also includes disputes cases where authorization requests got a decline response, but the merchant completed the transaction. 

AMEX (American Express) DiscoverVisaMasterCard
A01 – Charge Amount Exceeds Authorization AmountAT – Authorization Noncompliance11.1 – Card Recovery Bulletin4807 - Warning Bulletin
A02 – No Valid Authorization11.2 – Declined Authorization4808 – Authorization-Related Chargeback
A08 – Authorization Approval Expired11.3 – No Authorization4812- Account Number Not On File
Justt.ai Consumer Disputes goods not received

Consumer Disputes

This category represents chargebacks a cardholder initiates regarding merchant, service, or product issues. Consumer Disputes are also known are Card Member Disputes, Service Chargebacks, and Cardholder Disputes. Reasons for filing a dispute under this category vary but may include canceled recurring billing and goods not received.

AMEX (American Express)DiscoverVisaMasterCard
C02 – Credit Not Processed05 – Good Faith Investigation13.1 – Services/Merchandise Not Received4853 – Cardholder Dispute
C05 – Goods/Services CancelledAP – Recurring Payments13.3 – Not as Described or Defective Merchandise/Services4854 – Cardholder Dispute – Not Elsewhere Classified (U.S. Region Only)
C08 – Goods/Services Not Received or Only Partially ReceivedAW – Altered Amount13.4 – Counterfeit Merchandise4855 – Goods/Services Not Provided


Disputes in this category are associated with fraudulent transactions. Reason codes for EMV, no cardholder authorization, card present and card not present fraud are under this Fraud category.

AMEX (American Express)DiscoverVisaMasterCard
F10 – Missing ImprintUA01 Fraud – Card Present Transaction10.1 - EMV Liability Shift Counterfeit Fraud4837 - No Cardholder Authorization
F14 - Missing SignatureUA02 Fraud – Card Not Present Transaction10.2 - EMV Liability Shift Non-Counterfeit Fraud4840 - Fraudulent Processing of Transactions
F29 - Card Not PresentUA06 Fraud – Chip and PIN Transaction10.4 Fraud – Card-Absent Environment4863 - Cardholder Does Not Recognize—Potential Fraud
Processing Errors includes disputes related to duplicate processing, late presentment, invalid card numbers and more. Justt.ai

Processing Errors

Also known as Point-of-Interaction Errors, Processing Errors includes disputes related to duplicate processing, late presentment, invalid card numbers, incorrect charge amounts and credit processed as a charge.

AMEX (American Express)DiscoverVisaMasterCard
P01 - Unassigned Card NumberIN - Invalid Card Number12.1 - Late Presentment4834 - Point-of-Interaction Error
P03 - Credit Processed as ChargeLP - Late Presentation12.2 - Incorrect Transaction Code4831 - Transaction Amount Differs
P04 - Charge Processed as Credit12.3 - Incorrect Currency4842 - Late Presentment

Reason codes used in friendly fraud

Reason codes were created to help merchants better understand why their customers file disputes. In theory, this works, but the codes don’t necessarily give the whole story in reality.

This is because some customers abuse the chargeback process to commit friendly fraud. When a customer is honest about a dispute, the reason code is relevant. But in the case of friendly fraud, the reason code is a disguise for the real motive.

Some reason codes that don’t paint a clear picture and cardholders can hide behind include:

  • 13.1 (Merchandise Not Received) – does this mean the package got lost in shipping? Or is the cardholder cyber shoplifting? 
  • 4837 (No Cardholder Authorization) – did the cardholder forget the transaction? Or did a fraudster break through security defenses?
  • 13.7 Cancelled Services/Merchandise – is the merchant cancellation policy difficult to locate? Or did the cardholder forget to cancel?

Get proactive

Chargeback reason codes can be confusing and complicated. As such, it’s best to work with a professional chargeback mitigation company. Justt offers an end-to-end solution to help you identify the true causes behind chargeback reason codes, and fight false chargebacks.

Chargeback Reason Codes FAQs

What are chargeback reason codes?

It’s an alphanumeric string of text provided by an issuing bank following a chargeback that describes the reason for the dispute. Different card networks have different dispute code systems.

How many chargeback reason codes are there?

Between the four major card networks, there are 151 unique reason codes.

What evidence do I need to fight a chargeback?

Different chargeback reason codes need different evidence. The most common compelling evidence used include: 

  • Purchase receipts
  • Shipping records and confirmation of deliveries
  • IP address
  • Communication with the customer
  • Record of identity verification methods the customer used
What happens if a merchant does not respond to a dispute?

If a merchant doesn’t respond, the issuing bank issues a chargeback, resulting in lost revenue and costly chargeback fees.

What is chargeback arbitration?

It’s the final stage of chargeback resolution where the losing party (the merchant or cardholder) challenges the issuing bank’s decision by submitting more evidence to the card network. Although card networks have similar regulations for chargeback arbitration, the steps, terminologies, and time frames vary.

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