Table of Contents
- What is Discover chargeback reason code LP?
- What causes code LP chargebacks?
- What's the time limit to respond to code LP chargebacks?
- How can merchants fight code LP chargebacks?
- How can merchants prevent code LP chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code LP, 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 LP may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code LP?
Discover chargeback reason code LP falls under the “Processing Errors” category. The shorthand description is “Late Presentation.” This means that a chargeback was filed because the transaction wasn't completed prior to the deadline.
This could be because the merchant didn't process the transaction in a timely manner, the account was no longer in good standing at the time the transaction was completed, or that the transaction was delayed due to issues with the point-of-sale system.
Payment card transactions involve a multi-step process. Before you can complete and submit the transaction, you have to send an authorization approval request. Both of these steps need to be initiated by the merchant, even if the payment processing system automates it. That means that time can elapse between when a transaction is started, when authorization is requested and received, and when the transaction is finalized.
If you allow too much time to pass between these steps, the transaction may no longer be valid and you can find yourself liable for this type of chargeback.
What causes code LP chargebacks?
Code LP chargebacks are almost always caused by the merchant either forgetting or waiting too long to complete a transaction.
Most of the time it's a relatively simple and straightforward process to initiate and complete a transaction within the span of a minute or two. However, this is not always the case. Sometimes customers or point-of-sale system issues will interrupt a transaction before it can be completed. Some merchants may initiate a transaction and wait to complete it because they are unsure of some of the details, or the transaction is contingent on some unresolved decision or event, such as product availability or order fulfillment.
Whatever the reason, long delays in completing and submitting a transaction can cause merchants to miss the applicable processing deadlines.
If the customer has any reason to dispute the charge and Discover finds that it was not processed in a timely manner, it will be very difficult to fight this chargeback.
What's the time limit to respond to code LP chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code LP.
How can merchants fight code LP chargebacks?
- Evidence of compliance with delayed presentment requirements.
- Proof that you received a valid authorization approval response code within the applicable number of calendar days to the ship date, expected delivery date, or processing attempt.
- Proof that the cardholder approved the long delay in processing.
How can merchants prevent code LP chargebacks?
Merchants can prevent code LP chargeback by processing transactions immediately, or if processing must be delayed, being well-informed of the applicable rules and deadlines.
If a transaction is interrupted and the customer is still available, or if the payment credentials can be re-run, it may be safest to cancel the existing transaction and start over. When delaying processing, use an authorization hold to ensure funds will be available.
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.