Table of Contents
- What is Discover chargeback reason code AT?
- What causes code AT chargebacks?
- What's the time limit to respond to code AT chargebacks?
- How can merchants fight code AT chargebacks?
- How can merchants prevent code AT chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code AT, which indicates an improperly authorized transaction that the cardholder does not believe they should be responsible for paying. The actual underlying cause of this chargeback may be true fraud, friendly fraud, or merchant error. Merchants who believe they have received an invalid chargeback under reason code AT may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code AT?
Discover chargeback reason code AT falls under the “Authorization” category. The shorthand description is “Authorization Noncompliance.” The use of this reason code indicates that a cardholder is disputing a charge that did not go through the required authorization approval process.
While obtaining authorization approval is usually fairly straightforward, there can be complications. System issues, card wear, ambiguous responses, and customer insistence can lead a merchant to send multiple authorization requests, or even attempt to bypass the process entirely.
Other reason codes exist for the fairly straightforward declined or absent authorization responses, but reason code AT may be used in more complex circumstances that do not easily fit the other authorization-related reason codes.
Reason code AT might be used when a transaction carries an authorization response that was sent after the card’s expiration date, when a transaction is forced through after an initial decline, or when no electronic authorization, voice approval, or account verification was provided.
What causes code AT chargebacks?
Code AT chargebacks are usually caused by a merchant processing a transaction without requesting authorization for whatever reason.
Authorization response codes will often alert merchants when a lost or stolen card is being used. Sometimes they will even instruct the merchant to hold on to the card. Fraudsters are aware of this and may try to convince merchants to run a card without authorizing it.
If the merchant does so, they will usually get hit with a chargeback when the cardholder notices the charge.
Forced authorization also shows up in friendly fraud schemes. The perpetrator uses their own card but comes up with some pretense to get the merchant to run it without authorization. Later, they can demand a chargeback, and the merchant has no solid grounds to contest their claim.
Merchant error can also be the underlying cause of this chargeback when merchants fail to follow the correct authorization procedures and submit transactions without approval, with different amounts than what was originally authorized, or at a later date than when the authorization was received.
What's the time limit to respond to code AT chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code AT.
How can merchants fight code AT chargebacks?
Merchants can fight this chargeback if proper authorization was, in fact, obtained. Your chargeback response should include a copy of the authorization response along with the transaction date and amount.
If your first authorization attempt was declined, you may end up having to accept the chargeback. When responding to this reason code, showing multiple subsequent attempts to obtain approval may not be accepted as valid evidence to reverse the chargeback.
How can merchants prevent code AT chargebacks?
The most reliable way to prevent this chargeback is to never submit a transaction that was not been properly authorized. If you have to run a card multiple times to try to get an approval response, that may be a red flag.
Never allow yourself to be talked into forcing an unauthorized transaction through.
The following best practices can help you avoid this kind of chargeback:
- Always get authorization approval for every transaction you process.
- Authorize and submit transactions on the same day whenever possible.
- Never process a transaction for more than the tolerance level allowed above the authorization amount.
- If a card is declined, cancel the transaction and ask the customer to provide an alternate form of payment.
- Train your staff carefully on the correct procedures for obtaining authorization approval.
About Discover 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 if 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, Discover specifies 26 reason codes under the categories of Fraud, Not Classified, Authorization, Expired, Processing Errors, Services, and Dispute Compliance. Most of Discover’s reason codes are a two-letter abbreviation of the dispute description.
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.