Table of Contents
- What is Discover chargeback reason code DA?
- What causes code DA chargebacks?
- What's the time limit to respond to code DA chargebacks?
- How can merchants fight code DA chargebacks?
- How can merchants prevent code DA chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code DA, 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 DA may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code DA?
Discover chargeback reason code DA falls under the “Authorization” category. The shorthand description is “Declined Authorization.” This reason code is specified for transactions that were processed after authorization approval was requested and a “decline” response was sent back.
It happens all the time: A customer tries to pay with a credit card, and the card is declined. They’ll ask the merchant to run it again, insisting that the magnetic stripe is worn, or that the payment processing system is glitching, but the card is valid and the funds are available.
Sometimes this is true, and the transaction will be approved on the second or third attempt. If the card keeps getting declined, the customer might try to convince the merchant to force the transaction through, circumvent the authorization process, or find some other way to override the declined authorization.
This is always extremely risky for the merchant. Transactions processed without authorization are always subject to chargebacks and there is no effective way for merchants to fight them after the fact.
What causes code DA chargebacks?
Code DA chargebacks are most often caused by a merchant bypassing authorization to force through a declined transaction for one reason or another.
When a fraudster is trying to use a stolen credit card, they might try to find a merchant they can talk into running the card without authorization. When the real cardholder sees the transaction on their monthly statement, they will certainly file a chargeback.
Friendly fraud can occur when a cardholder gets a merchant to force a declined transaction through, and they realize that they can dispute the transaction and the merchant will have no way to prove that it was valid.
Merchant error can also be said to be the ultimate cause of many reason code DA chargebacks. Whenever a merchant bypasses the authorization step to force a declined transaction through, they’re taking a clear risk—one that frequently results in a chargeback.
What's the time limit to respond to code DA chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code DA.
How can merchants fight code DA chargebacks?
Merchants can fight code DA chargebacks if the dispute is erroneous and an approval response was received. The merchant's response should include a copy of the authorization response along with the transaction date and amount.
If the 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 DA chargebacks?
The easy way to prevent this kind of chargeback is to always get authorization approval before processing a transaction, and never force a declined card to go through.
The following tips can also help you avoid this kind of chargeback:
- If your point-of-sale terminal is having trouble reading a card because of equipment problems, or because the card is damaged, call Discover’s card authorization center and request authorization by providing the card information. If approval is granted, make sure the approval code is printed on the receipt in the correct location. If you get voice authorization over the phone, you may have to manually write it on the receipt.
- If you have had trouble receiving authorization responses, check in with your payment processor and make sure your point-of-sale systems are working properly.
- 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.