American Express Chargeback Reason Code C14: Card Member Disputes

chargeback reason code c14Merchants who receive a chargeback for a transaction placed with an American Express card may encounter reason code C14, which indicates a disputed transaction that the cardholder does not believe they should be responsible for paying. The actual underlying cause of this chargeback is usually either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code C14 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.

What is American Express Chargeback Reason Code C14?

American Express chargeback reason code C14 falls under the “Card Member Disputes” category. The shorthand description is “Paid by Other Means.” When you see this reason code, it means that the cardholder has claimed that they paid for their purchase with a different payment method, but the merchant charged their credit card anyway.

There is a wide range of reasons, valid and otherwise, why you might see this type of chargeback show up. The simplest explanation is usually the truth: that the cardholder changed their mind about how they wanted to pay for a purchase, but the merchant mistakenly went ahead and processed the credit card transaction already in progress instead of voiding it. However, some friendly fraudsters see this chargeback reason as a case of their word against the merchant’s, and may try to use it to help themselves to a “free” purchase.

What Scenarios Might Lead to This Chargeback?

When this chargeback is legitimate, it’s usually the merchant’s fault. It’s not uncommon for customers to pull out the wrong credit card, or realize that they’re coming close to their credit limit and should use a different card, or find some other reason to switch payment methods mid-purchase. No reasonable merchant would have a problem honoring this request, but it’s easy enough to be careless and leave a hanging transaction open, leaving the possibility that you might hit the wrong button or absent-mindedly finish processing it. In an ecommerce context, it’s possible for merchants to overlook a payment from a new third-party method and continue to bill a card on file instead.

Friendly fraudsters, however, will often claim that they paid for a purchase in cash, or some other hard-to-disprove method, but the merchant went ahead and charged their card anyway.

In addition, recurring billings or repeat purchases may confuse some cardholders, leading them to mistakenly request this type of chargeback.

Get the guide, Chargebacks 101: Understanding Chargebacks & Their Root Causes

What are the Important Timeframes?

The acquirer and/or merchant have 20 days to respond to this chargeback after it is filed. No special timeframes apply to the cardholder.

How Can Merchants Fight this Chargeback Code?

Merchants can fight this chargeback if the cardholder’s claims are false. Your chargeback response must include at least one of the following items:

  • If the alternate form of payment was for an unrelated charge, provide proof that the transaction was for a separate purchase.
  • If the cardholder agreed to use the card for payment, provide documentation that proves that the cardholder consented to have their card charged.
  • If you have already processed a refund for the transaction in question, provide documentation that proves you have credited the cardholder’s account.

How Can Merchants Prevent this Chargeback Code?

Meticulous documentation of payments and their methods is your best friend when it comes to avoiding this kind of chargeback. Remember to always write and keep receipts when a customer decides to pay in cash.

When a customer wants to change payment methods in the middle of a transaction, slow down and make sure that any credit card transactions in progress are canceled and cannot be finalized by accident.

These best practices can help:

  • Double check all transaction receipts before they are deposited.
  • If a customer wants to change to a different form of payment after initially offering a payment card, be sure to void the card transaction immediately.

About American Express Chargeback Reason Codes

Reason codes are alphanumeric codes that provide the justification for granting a chargeback. Pursuant to the Fair Credit Billing Act of 1974, cardholders have the right to dispute unauthorized or erroneous charges and issuing banks must reverse a disputed transaction of the cardholder’s claim is valid.

When a cardholder contacts their issuing bank to dispute a transaction and receive a chargeback, the dispute is assigned a reason code that most closely matches the substance of the cardholder’s claims. The reason code provides the merchant and other stakeholders in the dispute with a concise explanation for why a chargeback has been granted.

Each card network—Visa, Mastercard, American Express, and Discover—defines and maintains their own unique set of reason codes, which are applied to disputes by the banks that issue credit and debit cards under their brands.

As both a card network and an issuer, American Express specifies 34 reason codes under the categories of Fraud, Authorization, Processing Errors, Card Member Disputes, and Inquiry/Miscellaneous. Each American Express reason code consists of one or more letters, indicating the category, and a number that identifies the specific dispute reason.

Understanding chargeback reason codes is one of the most essential parts of effective chargeback management. Identifying the chargeback reason code and the evidence required to fight it is the first step in chargeback representment, and analyzing your chargeback reason codes can provide you with insights into what types of disputes are causing you the most trouble. With this information, you can determine the root causes of your chargebacks and take action to prevent them from reoccurring.