Guide to MasterCard Chargeback Reason Codes

We introduced Visa chargeback reasons in one of our previous blog posts. Similarly to Visa, Mastercard has its special codes for chargeback reasons. Mastercard chargebacks are classified into 4 categories: Authorization, Cardholder disputes, Fraud, and Point-of-Interaction errors.

This article will focus on the most frequent Mastercard chargeback reasons to help you understand them better.

1. Authorization-related chargebacks:

• 4808: Requested/Required authorization not obtained

2. Cardholder Dispute chargebacks:

• 4853:Goods or Services Were Either Not as Described or Defective
• 4853:Goods or Services Not Provided
• 4853: Cardholder Dispute of a Recurring Transaction
• 4853:Credit Not Processed

3. Fraud-related chargebacks:

• 4837: No Cardholder Authorization
• 4863: Cardholder Does Not Recognize

4. Point-of-Interaction errors:

• 4834: Cardholder Debited More than Once for the Same Goods or Services

4808: Requested/required authorization not obtained

You may receive this chargeback in case a transaction had to be authorized, but authorization was not obtained. It means that you have processed a transaction without authorization. Authorization is the process of communication between the merchant’s website and the cardholder’s issuing bank. The issuing bank checks whether a card has sufficient funds, and whether it is not lost or stolen. Then, it can either approve or decline the transaction. If a transaction was authorized, you should provide evidence to dispute the chargeback.

4853: Goods or services not as described or defective

A cardholder may file a chargeback with this reason if the following conditions apply:

• The cardholder’s order arrived damaged;
• The purchased goods appeared to be not as described by the merchant, i.e. the quality, colour, size or quantity does not reflect the description;
• The merchant promised a refund on their website but did not issue one to the cardholder.

If you decide to prove that goods match the description, or you have already resolved the conflict with the cardholder directly, you should collect and provide evidence. Always make sure the descriptions on your website are not misleading.

4853: Goods or services not provided

If a cardholder did not receive the order they purchased, they have the right to file a chargeback. This MasterCard chargeback code also applies to travel services which were not provided by a travel agency. To prevent chargebacks with this reason, you should agree with the customer on the expected delivery date in advance. If you delivered the order in time, you have the right to dispute the chargeback and provide compelling evidence. NB: This chargeback reason was previously known as 4855.

4853: Cardholder dispute of a recurring transaction

Merchants who process recurring payments should be aware of this chargeback reason. A customer may file a chargeback if they stopped recurring billing (cancelled a subscription or membership) in their account, but the merchant was still charging the customer’s card. The cardholder may not even know that they have agreed to recurring payments. Therefore, all the terms and conditions should be clearly stated on the merchant’s website, and the cardholder should know how to cancel their subscription to a service. NB: MasterCard also codes this reason as 4841 (Canceled Recurring or Digital Goods Transactions); however, they will eventually remove it.

4853: Credit not processed

If a merchant does not properly disclose their refund policy, they may have to deal with chargebacks. A customer can dispute the payment if the merchant received the returned product but did not issue a refund. In order to avoid chargebacks, make your refund policy easily accessible on your website and indicate all the conditions for a refund or no refund. NB: MasterCard also codes this reason as 4860; however, they will eventually remove it.

4837: No cardholder authorization

A payment card might have been used fraudulently, i.e. without the genuine cardholder’s permission. In such a case the real cardholder can file a chargeback and state that they did not authorize the charge.

4863: Cardholder does not recognize

This chargeback reason code means that the cardholder was not able to recognize the charge on their bank statement and believes that the transaction was fraudulent. After the issuing bank’s unsuccessful attempt to identify the transaction for the cardholder, the chargeback process begins. To avoid this chargeback, we recommend you to make a clear and recognizable description which appears on your customer’s bank account statement.

4834: Cardholder debited more than once for the same goods or services

You can receive this chargeback if your customer claims that their card was charged more than once for the same order. This chargeback code also applies if the cardholder paid by other means, but the merchant charged the card as well. Be careful not to enter the same transaction into the terminal more than once. If you see duplicate payments, ask the customer whether one of them should be refunded.

Summing up

Cardinity immediately informs merchants about received chargebacks. It should be noted that Cardinity does not participate in decision-making. Thus, we cannot make any influence on the issuing bank’s verdict regarding chargebacks. However, merchants have the right to dispute chargebacks by providing compelling evidence. We forward the dispute documents to the issuing bank on your behalf. In case you have already issued a refund, provide the necessary proof showing the refund amount and date. Feel free to read our other blog posts on chargebacks and learn how to minimize your chargeback ratio.

Source: MasterCard Chargeback Guide (September 24, 2019)