Table of Contents
- What is Discover chargeback reason code CD?
- What causes code CD chargebacks?
- What's the time limit to respond to code CD chargebacks?
- How can merchants fight code CD chargebacks?
- How can merchants prevent code CD chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code CD, 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 is typically either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code CD may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code CD?
Discover chargeback reason code CD falls under the “Services” category. The shorthand description is “Credit/Debit Processed Incorrectly.” This code indicates that the cardholder claims a charge was posted to their account that was actually supposed to be a credit.
One of the best things a merchant can do to keep their customers happy and avoid chargebacks is to have a generous return and refund policy and process credit transactions promptly after informing a customer that they will be getting a refund. Refunds are always less costly and harmful than chargebacks, and they have the side benefit of increasing customer satisfaction and loyalty. However, the promise of a refund can turn into a big headache if the credit transaction is processed incorrectly.
What causes code CD chargebacks?
The usual cause of this chargeback is merchant error. The merchant intends to process a credit transaction to return funds to a customer, but they inadvertently submit a charge instead, debiting funds from the customer’s account.
As soon as the customer looks at their statement and sees the opposite of what they were expecting, they are sure to call Discover and ask for a chargeback.
It's possible for code CD chargebacks to be an attempt at friendly fraud, but if you keep good transaction records you shouldn’t have much trouble fighting a dispute based on such claims.
What's the time limit to respond to code CD chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code CD.
How can merchants fight code CD chargebacks?
Merchants can fight this chargeback with evidence that the transaction was not intended to be a credit or that the cardholder has already been refunded for the error.
Your chargeback response should include at least one of the following elements:
- Proof that the debit transaction was legitimate and that the customer agreed to and authorized it.
- Transaction receipts showing that the disputed transaction was posted correctly.
- Evidence that you have already provided a credit to the customer’s account to correct the error and refund them any money due.
How can merchants prevent code CD chargebacks?
Careful and diligent payment processing procedures can help you avoid making the kind of mistakes that can lead to this chargeback.
Use up-to-date, user-friendly payment processing terminals and software to make it clear for your staff what type of transaction they are making, during and after processing.
The following tips can help you avoid processing error chargebacks:
- When you assure a customer that a refund is coming, process it as soon as possible.
- If you accidentally make a duplicate or erroneous transaction, reverse it immediately or issue a credit to make up for it.
- Double-check your calculations and the final refund amount before finalizing a credit transaction.
- Train your staff on the proper procedures for processing credits, debits, and transaction reversals.
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.