Table of Contents
- What is Discover chargeback reason code IN?
- What causes code IN chargebacks?
- What's the time limit to respond to code IN chargebacks?
- How can merchants fight code IN chargebacks?
- How can merchants prevent code IN chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code IN, 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 usually merchant error. Merchants who believe they have received an invalid chargeback under reason code IN may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code IN?
Discover chargeback reason code IN falls under the “Processing Errors” category. The shorthand description is “Invalid Card Number.” This reason code applies when a merchant somehow manages to process a transaction against an invalid, unassigned, or otherwise incorrect card number.
While it would be difficult to place a transaction with a nonexistent card number, chargeback reason codes are designed to capture a wide range of eventualities.
What causes code IN chargebacks?
The most likely explanation when you encounter a chargeback with this reason code is that the merchant or customer mistyped the card number when entering it for processing.
While most payment processing software and point-of-sale terminals will have safeguards designed to enforce proper authorization and prevent such errors from occurring, it is possible for a merchant to manually key in a card number and force a transaction to circumvent the authorization step. Under these conditions, it can be possible for a transaction to be submitted against an invalid number.
It may be somewhat more common for merchants to process transactions against expired or closed accounts, which can also lead to chargebacks bearing this reason code.
There are also potential issues involving fraudsters or internet trolls entering fake credit card numbers into a checkout, which can cause problems in the back end processing system.
What's the time limit to respond to code IN chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code IN.
How can merchants fight code IN chargebacks?
Merchants can fight code IN chargebacks by providing evidence that it was filed in error and the card number in question was valid at the time of the transaction.
Your response may include the following:
- Proof that the card number is accurate and was not listed on the negative file at the time that downtime authorization services were used to obtain an authorization response for the transaction.
- A copy of the authorization approval code sent in response.
- A copy of the cardholder’s signature, if required for the transaction type.
How can merchants prevent code IN chargebacks?
Code IN chargebacks are best prevented by avoiding using manually keyed transactions and by always obtaining authorization when processing a payment.
Code IN chargebacks aren't usually filed based on cardholder claims. If Discover believes you have processed a charge against an invalid or nonexistent number, you can assume they’ve done some investigation and come to a solid conclusion. For that reason, prevention ahead of time is usually going to be more beneficial than trying to fight these chargebacks.
It’s best to avoid manually keying in transactions. Payment processing systems will almost always require proper authorization and catch invalid card numbers long before a transaction can be submitted.
When you have no choice but to key in payment credentials manually, enter them carefully and check them for errors. Make sure that the numbers you are looking at are legible and ask for clarification from the cardholder, if possible, whenever there is any ambiguity.
The following best practices can help you avoid this kind of chargeback:
- Always obtain an authorization approval response before completing a transaction.
- Double-check all the numbers and data entered for a transaction before processing.
- Review customer-entered payment credentials for accuracy before processing.
- Double-check the expiration date on every payment card you process.
- Process all transactions in a timely manner.
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.