Table of Contents
- What is Discover chargeback reason code RN2?
- What causes code RN2 chargebacks?
- What's the time limit to respond to code RN2 chargebacks?
- How can merchants fight code RN2 chargebacks?
- How can merchants prevent code RN2 chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code RN2, 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 typically either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code RN2 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code RN2?
Discover chargeback reason code RN2 falls under the “Services” category. The shorthand description is “Credit Not Processed.” This reason code indicates that the cardholder claims they were promised a refund or credit by the merchant, but no such credit was processed.
This chargeback can result from miscommunication with the customer, slow or unhelpful customer service, or friendly fraud.
Legitimate cases of this chargeback are easy enough to avoid—you simply have to fulfill your promises to provide a refund in a timely manner.
What causes code RN2 chargebacks?
Code RN2 chargebacks are typically caused by a merchant forgetting to process a credit after promising a customer a full or partial refund. They may also result from a customer simply getting impatient when they don't immediately see a refund in their account.
The usual setup for this chargeback is that a customer comes to a merchant with a complaint, return, refused delivery, or product issue, and the merchant promises to remedy the situation by refunding the cardholder.
Because the merchant is busy, forgetful, or short-staffed, they neglect to process the refund within a reasonable time frame. The cardholder comes to believe that no refund is forthcoming, so they contact Discover to dispute the original transaction. If enough time has elapsed, Discover will consider this to be a valid reason for a chargeback.
Friendly fraud is also common on this reason code. Sometimes it isn’t malicious—the customer just believes that the merchant is ignoring them, or they don’t notice that a credit was already processed. Some cardholders, however, will file this chargeback when no refund was promised.
What's the time limit to respond to code RN2 chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code RN2.
How can merchants fight code RN2 chargebacks?
Merchants can fight code RN2 chargebacks if the cardholder’s claims are false, meaning that the credit has already been processed or was never due in the first place.
Your chargeback response should include one of the following elements:
- Evidence proving that no credit is due and that the terms of purchase the cardholder agreed to have been met.
- If you have already processed a refund or in-store credit for the transaction in question, provide documentation that proves you have credited the cardholder’s account.
How can merchants prevent code RN2 chargebacks?
The best way to avoid these chargebacks is to issue refunds and credits as soon as possible after they have been offered. If a refund has been promised and there is a legitimate reason to delay processing it, notify the customer immediately and explain the situation to them.
Train your customer service staff to respond right away to customer queries that may require you to offer a refund, and to provide accurate and realistic time frames for when the customer can expect to see the credit hit their account.
The following best practices can help you avoid this kind of chargeback:
- Process all credit vouchers promptly, ideally so that the credit will appear on the cardholder’s next monthly statement.
- Disclose your refund policies on your sales drafts or receipts. If possible, print them prominently near the line where the cardholder places their signature.
- Make sure your cancellation, returns, and refund policies are easy to find and comprehend.
- Stick to the promises you make to provide refunds and credits, especially if a specific time frame is mentioned.
- Use a purchase return authorization so that the customer can see a pending credit to their account.
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.