Table of Contents
- What is Discover chargeback reason code PM?
- What causes code PM chargebacks?
- What's the time limit to respond to code PM chargebacks?
- How can merchants fight code PM chargebacks?
- How can merchants prevent code PM chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code PM, 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 either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code PM may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code PM?
Discover chargeback reason code PM falls under the “Services” category. The shorthand description is “Paid by Other Means.” This code indicates the cardholder is claiming that they paid for their purchase using another method of payment, meaning that the Discover charge is a duplicate.
It’s not uncommon for customers to change their minds about a payment method midway through a transaction and provide cash or a different card. Merchants who forget to void transactions already in progress may end up mistakenly processing duplicate charges on both payment methods.
What causes code PM chargebacks?
Code PM chargebacks are usually caused by a merchant forgetting to void a credit card transaction after a customer asks to use a different payment method.
When making a purchase, customers often hand over the wrong payment card by mistake. If the card they handed over is nearing its limit, is a company card, or shouldn't be used for some other reason, they may ask to switch to another method of payment after the card has already been read.
When merchants assist a customer in switching payment methods mid-transaction, confusion or distraction can lead them to leave the original transaction open and complete it instead of voiding it.
In eCommerce, customers may submit a one-off payment for a bill or recurring transaction even though the merchant has a different payment card on file. If the merchant goes ahead and processes the card on file, it may create a duplicate payment that leads to this chargeback.
Friendly fraudsters may falsely claim that a card payment was a duplicate because they changed their minds and gave the merchant cash instead, believing that the merchant will be unable to disprove their claim.
What's the time limit to respond to code PM chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code PM.
How can merchants fight code PM chargebacks?
Merchants can fight code PM chargebacks by providing evidence that the charge is tied to a legitimate, approved purchase that was not paid for using another method.
Your chargeback response should include at least one of the following items:
- If the alternate payment was related to a different purchase, provide proof that the charges reflect separate transactions.
- If the cardholder intended to pay with the card used in the disputed transaction, provide documentation (signed, if applicable) that proves that the cardholder authorized the charge on that card.
- If you have already processed a refund for the transaction in question, provide documentation that proves you have credited the cardholder’s account.
How can merchants prevent code PM chargebacks?
The best way to avoid code PM chargebacks is to pay close attention when processing transactions and document all payments and payment methods received. Provide receipts for all cash payments and keep copies of them.
When a customer wants to change payment methods in the middle of a transaction, stop and make sure the transaction in progress is voided and can't be submitted by accident.
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.