Table of Contents
- What is Discover chargeback reason code NC?
- What causes code NC chargebacks?
- What's the time limit to respond to code NC chargebacks?
- How can merchants fight code NC chargebacks?
- How can merchants prevent code NC chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code NC, which indicates an invalid transaction that does not fit within any of the other established chargeback reason codes. 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 NC may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code NC?
Discover chargeback reason code NC falls under the “Not Classified” category. The shorthand description is “Not Classified.” This reason code can be used for any claim of an invalid transaction that does not fall within any other reason code classified by Discover.
This is an unusual reason code that isn't tied to any particular circumstance or scenario. While most disputes will fit within one of the other established reason codes, Discover reserves this code for all other disputes that may involve complicated, unusual, or unprecedented claims on the part of the cardholder.
It's most commonly applied when there is a lengthy unresolved dispute involving multiple specific claims that would not be adequately captured by a single reason code.
What causes code NC chargebacks?
Because code NC chargebacks are a catch-all for disputes that don't fit another reason code, the root cause could be anything—true fraud, friendly fraud, or merchant error. Merchants will need to examine the details of the dispute to determine the likely cause.
Cardholders can be granted this chargeback up to 365 days from the ordering date for credit card, debit card, and prepaid identity known card transactions. When you have a long, ongoing dispute with a customer, make sure to keep copies of all records and correspondence for at least a year, as you never know if this chargeback might eventually be filed against you.
What's the time limit to respond to code NC chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code NC.
How can merchants fight code NC chargebacks?
Merchants can fight code NC chargebacks if they can prove that the cardholder's claims are false and they are not entitled to a chargeback. What evidence will be required varies based on the specifics of the claim.
Your chargeback response may include the following:
- Documentation signed by the cardholder indicating their agreement to the terms of the sale and the payment card charge.
- Evidence that the product or services purchased were received by the cardholder and that the card sale was completed accurately and appropriately.
- If the merchant has already provided a refund to resolve this dispute, provide proof that the cardholder’s account has been credited.
How can merchants prevent code NC chargebacks?
The right prevention methods for this chargeback reason code will vary greatly depending on the nature of the claim and the facts thereof. As a general rule, it's always best not to get dragged into a lengthy and complicated dispute with a cardholder.
Such disputes are always likely to end in chargebacks and often the simplest and least costly way to resolve them is to give the cardholder a full refund and send them on their way.
The following best practices can help you avoid this kind of chargeback:
- Don't make false or exaggerated claims about your product or service.
- Provide detailed tracking information and delivery confirmation for all shipments.
- Make your return and refund policies generous and flexible, and post them where your customers are likely to see them prior to completing a purchase.
- Provide attentive, thoughtful, round-the-clock customer service.
- Block customers who have raised lengthy bad-faith disputes with you in the past.
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.