Fraud

Description

Fraud – Card Present Transaction

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. A fraudulent transaction was made using the actual credit card, according to the cardholder.
  2. Merchant processed the order without authorization; The credit card was not swiped through the magnetic stripe reader; a card-not-present transaction was not identified as such; the cardholder did not approve or participate in the transaction.

Prevention Steps

  1. Wait to receive authorization before finishing transaction
  2. Wait to receive authorization before finishing transaction
  3. Strengthen internal fraud prevention policies and procedures for suspicious activity
  4. Provide timely responses to all retrieval requests

Learn More about Discover Chargeback Reason Code UA01: Fraud

Description

Fraud – Card Not Present Transaction

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. Cardholder claims a fraudulent transaction was made in a card-absence environment.
  2. The merchant does not request authorization; the merchant makes multiple attempts on a card that is declined, or otherwise attempts to force, circumvent, or override a declined authorization.

Prevention Steps

  1. Obtain authorization
  2. Discontinue the transaction if a card has been declined
  3. Ask for an alternate form of payment
  4. Never force an authorization

Learn More about Discover Chargeback Reason Code UA02: Fraud

Description

Fraud – Chip Counterfeit Transaction

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder claims to not have been involved in a transaction that was processed using an EMV/chip terminal.
  2. The merchant's card processor did not transmit the full chip data; a chip-reading terminal was not actually used; a transaction was made fraudulently by an unauthorized person.

Prevention Steps

  1. Upgrade to compliant terminals
  2. Obtain approval for all transactions
  3. Make sure to obtain the correct Cardholder Verification Method (CVM), such as a signature or PIN
  4. Train staff on the proper handling of terminal issue

Learn More about Discover Chargeback Reason Code UA05: Fraud

Description

Fraud – Chip and PIN Transaction

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder claims to not have been involved in a transaction that was processed using a hybrid card at a stripe-only terminal of a chip-capable terminal not equipped with a PIN pad.
  2. The merchant's card processor did not transmit the full chip data; a transaction was made fraudulently by an unauthorized person.

Prevention Steps

  1. Upgrade to compliant terminals
  2. Obtain approval for all transactions
  3. Make sure to obtain the correct Cardholder Verification Method (CVM), such as a signature or PIN
  4. Train staff on the proper handling of terminal issue

Learn More about Discover Chargeback Reason Code UA06: Fraud

Description

Request Transaction Receipt (swiped card transactions)

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. Issuer requests documents for a transaction the cardholder claims was fraudulent (card-present.)
  2. Transaction signature does not match the card signature; cardholder discovers fraud; merchant did not obtain authorization; card imprint is not legible and/or does not have proper security features; receipt or other transaction documents are illegible.

Prevention Steps

  1. Always obtain authorization
  2. Make sure all card-present transactions are either chip-read or magnetic stripe-read
  3. Obtain an imprint or perform additional validation, such as PIN
  4. Always obtain legible signed receipt, and provide customer with a copy

Learn More about Discover Chargeback Reason Code UA10: Fraud

Description

Cardholder claims fraud (swiped transaction, no signature)

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder claims this activity was fraudulent (card-present).
  2. Merchant did not obtain signature on a transaction; cardholder discovers fraud; merchant did not obtain authorization; card imprint is not legible and/or does not have proper security features; receipt or other transaction documents are illegible.

Prevention Steps

  1. Merchant should obtain cardholder’s authorization at the time of sale.
  2. Merchant should obtain cardholder’s signature at the transaction receipt
  3. If electronic machine or the terminal cannot recognize/read the card’s magnetic stripe, request authorization by key entering the account number. Be sure the key-entered account number matches the account number on the card. Use a manual printer to print the information from the face of the card at the order receipt that is signed by the cardholder.
  4. Suppose your terminal is not working, ,call your center for authorization approval and mention approval code on the order receipt in the space provided. Use a manual printer to print the information from the face of the card at the order receipt that is signed by the cardholder.

Learn More about Discover Chargeback Reason Code UA11: Fraud

Authorization

Description

No Authorization

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The transaction was processed without authorization.
  2. The merchant does not request authorization; the merchant waits a day or more before requesting authorization; the merchant requests authorization for one amount, then adds a tip to the total before processing.

Prevention Steps

  1. Always authorize every transaction
  2. Obtain authorization on the day of the transaction 
  3. Don't add the tip to a previously authorized amount

Learn More about Discover Chargeback Reason Code NA: Authorization

Description

Declined Authorization

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. A declined transaction is presented for processing.
  2. The merchant does not request authorization; the merchant makes multiple attempts on a card that is declined, or otherwise attempts to force, circumvent, or override a declined authorization

Prevention Steps

  1. Obtain authorization
  2. Discontinue the transaction if a card has been declined
  3. Ask for an alternate form of payment
  4. Never force an authorization

Learn More about Discover Chargeback Reason Code DA: Authorization

Description

Authorization Noncompliance

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The transaction was processed without a positive authorization response and/or contains an authorization response beyond the card's expiration date.
  2. Transaction was processed without electronic authorization, voice approval, or account verification; the transaction was forced after initially being declined.

Prevention Steps

  1. Always obtain authorization
  2. Do not force a transaction when a declined authorization has been received
  3. Do not process a transaction for more than the allowed tolerance level above the authorization amount

Learn More about Discover Chargeback Reason Code AT: Authorization

Processing Errors

Description

Invalid Card Number

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The card number used for the transaction is not assigned to a valid account, or not assigned to the cardholder.
  2. The merchant mistypes or calculates incorrectly; card has expired.

Prevention Steps

Double check calculations and the final transaction amount before processing Double-check expiration date

Learn More about Discover Chargeback Reason Code IN: Processing Errors

Description

Late Presentation

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The transaction was completed past the required time limits.
  2. The merchant does not process a transaction in a timely manner; the account was no longer in good standing at the time of processing; the transaction was delayed due to a POS system issue.

Prevention Steps

Send completed transactions to your card processor as soon as possible (preferably on day of the sale)

Learn More about Discover Chargeback Reason Code LP: Processing Errors

Card Member Disputes

Inquiry/Miscellaneous

Not Classified

Description

Not Classified

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. Any claims of invalid transactions which do not fall under any other classification.
  2. The merchant's attempts to resolve the issue were unsuccessful; other reasons specific to the claim.

Prevention Steps

Will fluctuate depending on the claim The cardholder may also initiate this chargeback up to 365 days from the ordering date for the credit card transaction, Debit Card Transactions and Prepaid Identity Known Card Transactions.

Learn More about Discover Chargeback Reason Code NC: Not Classified

Expired

Description

Expired Card

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder challenges the validity of a transaction because the card had expired at the time.
  2. Card expired before the transaction date; the merchant processed the transaction without authorization; the card was valid at the time of transaction but expired before the transaction was processed.

Prevention Steps

  1. Always check the expiration date on all cards
  2. Double check customer's claim of expiration on card-not-present transactions
  3. Always request authorization
  4. Do not force transactions

Learn More about Discover Chargeback Reason Code EX: Expired

Services

Description

Good Faith Investigation

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The merchant accepted responsibility in response to a Good Faith Investigation Ticket Retrieval Request.
  2. Evidence may be submitted to Discover that the cardholder received duplicate credits, if you've applied a credit to the card account in response to a Good Faith Inquiry and a chargeback was also processed because you accepted responsibility for the card transaction. In all other cases, this chargeback is final and non-appealable.

Learn More about Discover Chargeback Reason Code 5: Services

Description

Does Not Recognize

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder claims that he or she does not recognize the transaction appearing on the cardholder statement.
  2. The cardholder’s billing statement is incorrect; the buyer has forgotten the transaction; the cardholder does not recognize the billing descriptor; the customer wants a refund without going through the regular process; the customer was not aware that a family member used the card.

Prevention Steps

  1. Create clear billing descriptors
  2. Add Customer Service contact information to the descriptor
  3. Streamline returns policy for user friendliness

Learn More about Discover Chargeback Reason Code AA: Services

Description

Recurring Payments

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder claims to have been charged for a canceled recurring transaction.
  2. The cardholder withdraws permission to charge the account or cancels payment for subscription; merchant neglects to cancel a recurring transaction; merchant processes a transaction after being notified the cardholder's account was closed; merchant raises the charge amount without informing the cardholder.

Prevention Steps

  1. Terminate recurring transactions when the cardholder requests cancelation
  2. Consider a no-strings-attached cancelation policy
  3. Don't increase the transaction amount without the cardholder's consent
  4. Don't prematurely bill the cardholder
  5. Send notifications for upcoming charges

Learn More about Discover Chargeback Reason Code AP: Services

Description

Altered Amount

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The amount in the authorization does not match the amount from the transaction (includes cash advance transactions).
  2. The system posted a different amount to the cardholder’s account; ATM dispensed an amount different from the amount charged to the account (less any set fees or service charges); cardholder approved the for a cash advance or ATM transaction, but a different amount was dispensed/charged to the account; cardholder did not request cash over, but cash over was charged to the account.

Prevention Steps

  1. Double check calculations and the final transaction amount before processing
  2. Don't change the transaction amount without the cardholder's consent
  3. Reconcile recorded cash over amounts with actual cash distributed

Learn More about Discover Chargeback Reason Code AW: Services

Description

Credit/Debit Posted Incorrectly

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder was debited for a transaction that should have been a credit.
  2. The merchant processed a debit instead of a credit, processed a credit instead of processing a reversal, or in some other way processed a transaction that differed from the obtained authorization.

Prevention Steps

  1. Double check calculations and the final transaction amount before processing
  2. Train staff on the proper procedures for processing credits, debits, and reversals

Learn More about Discover Chargeback Reason Code CD: Services

Description

Duplicate Processing

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. A single transaction processed two or more times.
  2. The merchant tries to submit multiple batches at one time; the transaction has multiple receipts; the transaction is duplicated in the merchant's system; the transaction was processed but the cardholder paid for the same merchandise or service by other means.

Prevention Steps

  1. Review transaction receipts before depositing 
  2. Submit a batch only one time
  3. Credit any duplicate transactions
  4. Train staff on the proper procedures for handling credits

Learn More about Discover Chargeback Reason Code DP: Services

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. A requested sales receipt was provided but was not legible.
  2. The receipt is unreadable due to light ink, ribbed or colored paper, or fading; the original order receipt is mishandled or is scanned at a smaller size.

Prevention Steps

  1. If the Transaction Documentation is required to display a Card print or issuer cannot receive the card transaction amount from the cardholder for any reason.
  2. The Merchant bank may submit the Card Sale on the correct Card Number in the resolve of the Dispute.
  3. Issuers may receive Invalid Card Number Disputes during the times stipulated.

Learn More about Discover Chargeback Reason Code IC: Services

Description

Non-Receipt of Cash from ATM

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

Cardholder did not receive the full cash withdrawal at an ATM.

Prevention Steps

  1. Reconcile ATMs in a timely manner
  2. Adjust any out of balance machines promptly
  3. In case of a discrepancy, process a credit/reversal as soon as possible

Learn More about Discover Chargeback Reason Code NF: Services

Description

Paid by Other Means

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. Cardholder was charged for a transaction that was processed using an alternate form of payment.
  2. The merchant didn't void multiple transactions.

Prevention Steps

  1. Double check calculations, transaction amounts, and payment type before processing
  2. Void any transactions if the cardholder wishes to use a different payment method

Learn More about Discover Chargeback Reason Code PM: Services

Description

Non-Receipt of Goods, Services, or Cash

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. Non-Receipt of Goods or Services
  2. The merchant delays delivery; the merchant charges the cardholder prior to shipping or delivery; the merchant ships on time or has the product available for pick-up but does not inform the customer; the cardholder fraudulently claims the goods or service did not arrive.

Prevention Steps

  1. Provide goods and services as promised
  2. Don't charge the cardholder's account until after the product has been shipped
  3. Let cardholders know when the product has been shipped and the estimated date for delivery
  4. Use delivery confirmation
  5. Make sure products are available for pick up when specified

Learn More about Discover Chargeback Reason Code RG: Services

Description

Cardholder Disputes Quality of Goods or Services

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

  1. The cardholder claims that the goods or services were defective or not as described prior to the transaction.
  2. The merchandise was damaged upon its arrival; the merchandise does not match the merchant's description; the cardholder disputes the quality of the product; the cardholder fraudulently claims the merchandise is damaged.

Prevention Steps

  1. Double check orders to ensure the correct item is shipped
  2. Package items carefully to avoid damage during shipping
  3. Package items carefully to avoid damage during shipping
  4. Accept returns from cardholders and issue credit promptly
  5. Never sell counterfeit products

Learn More about Discover Chargeback Reason Code RM: Services

Description

Credit Not Processed

Time Limit (Issuer/Cardholder)

120 Days recommended

Time Limit (Acquirer/Merchant)

not applicable

Typical Causes

The cardholder refused delivery of goods or services or returned merchandise and credit was not processed.

Prevention Steps

  1. Process all credit vouchers promptly
  2. Properly disclose special refund policies on the sales draft in prominently near the cardholder’s signature
  3. Consider updating returns policy

Learn More about Discover Chargeback Reason Code RN2: Services

Dispute Compliance

Description

Dispute Compliance

Typical Causes

The acquirer or merchant did not comply with the applicable Operating Regulations.

Learn More about Discover Chargeback Reason Code DC: Dispute Compliance

Point-of-Interaction Error

Cardholder Disputes

Consumer Disputes