A Comprehensive Guide to Visa and Mastercard Chargeback Reason Codes for High-Risk Merchants

Introduction

Chargebacks are a common issue that merchants face, often leading to financial losses and administrative headaches. Understanding the reason codes for chargebacks issued by major credit card companies like Visa and Mastercard can help you effectively dispute them and protect your business. In this guide, we'll delve into these reason codes and offer actionable advice on how to respond.

What Are Chargeback Reason Codes?

Chargeback reason codes are specific identifiers used by credit card companies to categorize the reason for a chargeback. These codes help merchants understand why a chargeback has occurred and how to potentially dispute it.

Visa Chargeback Reason Codes (below are several examples)

Unauthorized Transactions

Reason Code 10.4: Cardholder did not authorize or participate in the transaction.

**How to Respond**: Provide evidence that the cardholder participated in the transaction. This could include signed receipts, online verification, or other proof of authorization.

Quality of Goods or Services

Reason Code 13.1: Goods or services were not as described.

**How to Respond**: Offer proof that the goods or services were delivered as described. This could include product descriptions, photographs, or customer correspondence.

Processing Errors

Reason Code 12.1: Duplicate processing of a transaction.

**How to Respond**: Show evidence that the transaction was only processed once, such as transaction logs or payment gateway records.

Mastercard Chargeback Reason Codes

Fraudulent Transactions

Reason Code 4837: No cardholder authorization.

**How to Respond**: Provide evidence of cardholder authorization. This could include a signed receipt, online verification, or other proof of authorization. Fraud based Chargebacks are tougher to respond to, unfortunately.

Quality of Goods or Services

Reason Code 4853: Defective or not as described.

**How to Respond**: Provide evidence that the product was delivered as described or offer a refund.

Authorization Issues

Reason Code 4808: Authorization-related chargeback.

**How to Respond**: Provide evidence that proper authorization was obtained, such as authorization codes or transaction logs.

Tips for Responding to Chargebacks

**Keep Detailed Records**: Always maintain comprehensive records of transactions, customer interactions, and authorizations.

**Act Promptly**: Time is of the essence when disputing a chargeback. Respond as quickly as possible with all required documentation.

**Consult with Experts**: If you're unsure how to proceed, consult with payment processing experts who can guide you through the dispute process. There are 3rd party solutions providers, such as https://midigator.com/ or https://chargebacks911.com/

**AVS/CVV**: Simple solutions such as Address Verification and CVV are often asked of customers, but not required for transaction approval. These very simple fraud-based solutions can help address many dispute problems.

Conclusion

Understanding Visa and Mastercard chargeback reason codes is crucial for merchants looking to protect their business from financial losses. By knowing what each code means and how to effectively respond, you can increase your chances of successfully disputing chargebacks.

Lastly, you can also learn a LOT about your processing performance by doing a deep dive into all of your most common reason codes. We have helped many merchants avoid termination or payment problems simply by understanding common reason codes and making business decisions to help reduce or eliminate disputes that are easily resolved when you understand why disputes are occurring.

Additional Resources

For more information, you can refer to the official guidelines provided by [Visa](https://www.visa.com) and [Mastercard](https://www.mastercard.com).