Table of Contents
- What is Discover chargeback reason code RG?
- What causes code RG chargebacks?
- What's the time limit to respond to code RG chargebacks?
- How can merchants fight code RG chargebacks?
- How can merchants prevent code RG chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code RG, which indicates a disputed 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 RG may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code RG?
Discover chargeback reason code RG falls under the “Services” category. The shorthand description is “Non-Receipt of Goods, Services, or Cash.” This code indicates that the cardholder claims the merchant did not deliver the goods or services they paid for.
What causes code RG chargebacks?
Code RG chargebacks can result from a failure to deliver on the part of the merchant, a dissatisfied customer unable to get or unwilling to seek a refund, or a deliberate attempt at fraud by a customer who received their purchase.
This chargeback is appropriate and valid when merchants don’t deliver goods or services by a contracted date, don’t show up to provide in-person services, don’t notify customers about shipping delays or fulfillment issues, or otherwise fail to uphold their own purchase agreements with the customer.
Reason code RG also shows up in many friendly fraud chargebacks. Unscrupulous customers may try to scam merchants by falsely claiming they didn’t receive a delivery.
In other cases, a customer may immediately file a dispute in response to a delayed delivery instead of working things out with the merchant.
What's the time limit to respond to code RG chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code RG.
How can merchants fight code RG chargebacks?
Merchants can fight code RG chargebacks by providing evidence that the goods or services were delivered in accordance with the terms of sale.
The right evidence will depend on whether or not the chargeback carries certain transaction modifiers.
If the chargeback includes the “Airline Transaction” modifier, your response must include:
- Proof that the cardholder used the airline ticket they purchased.
- Proof that the customer submitted an invalid lost ticket application.
If the transaction includes the “Card Not Present” modifier, your response must include:
- Confirmation that the cardholder registered to receive electronic delivery of the goods or services, along with their email or IP address, the date and time they downloaded their purchase, and a description of the items downloaded, or a log showing that they received the downloaded material on or after the date of the transaction.
If the chargeback includes the “Site to Store” modifier, your response must include:
- A pick-up form signed by the cardholder.
- A copy of the identification presented by the cardholder when they picked up their order.
For chargebacks without these modifiers, submit one of the following items:
- Receipts, work orders, signed documents, proof of delivery, or other records that show that the goods or services were delivered per your agreement with the cardholder.
- Correspondence between you and the customer that proves they received the goods or services.
- 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 RG chargebacks?
The following tips can help you avoid this kind of chargeback:
- Always deliver purchased goods or services in accordance with your agreement with the customer.
- Don’t charge the cardholder’s account until their order has been shipped.
- Inform cardholders when their order has shipped and let them know the estimated delivery date. If possible, provide tracking information.
- Use signed delivery confirmation.
- Make sure orders are ready and available for pickup on the date specified.
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.