Table of Contents
- What is Discover chargeback reason code UA11?
- What causes code UA11 chargebacks?
- What's the time limit to respond to code UA11 chargebacks?
- How can merchants fight code UA11 chargebacks?
- How can merchants prevent code UA11 chargebacks?
- About Discover chargeback reason codes
Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code UA11, 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 may be true fraud, friendly fraud, or merchant error. Merchants who believe they have received an invalid chargeback under reason code UA11 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Discover chargeback reason code UA11?
Discover chargeback reason code UA11 falls under the “Fraud” category. The shorthand description is “Cardholder Claims Fraud (Swiped Transaction, No Signature).” This code indicates that the cardholder claims a transaction was fraudulent and the merchant failed to obtain a signature or follow authentication procedures.
one of the following conditions applies: that the merchant did not obtain a signature on the transaction, that the merchant did not obtain proper authorization, that the card imprint is not legible or does not include the required security features, or that the receipt or other transaction documents are not legible.
When a card-present transaction is processed without using a card's EMV chip, a signature is the next best way to validate the cardholder’s identity. When the chip is not scanned, a signature is not obtained, and other authorization procedures cannot provide sufficient validation, Discover will assume that the cardholder is telling the truth.
Note that Discover no longer requires merchants to obtain a signature at checkout, but merchants may still require a signature from their customers if they so choose.
What causes code UA11 chargebacks?
While there are various specific circumstances that can lead to code UA11 chargebacks, in all cases the root cause is the merchant failing to properly authenticate a transaction using a card's EMV chip.
Various procedures have been established to prevent fraudulent transactions in card-present environments. While the EMV standard is the most effective method, older procedures can still be used to provide proof that the merchant verified the cardholder’s identity before processing the transaction.
When these procedures are not followed and the cardholder claims fraud, the merchant will have difficulty disproving that claim.
On rare occasi0ns, these chargebacks may be the result of friendly fraud. Friendly fraudsters may deliberately omit a signature (and hope the merchant doesn’t notice) so they can dispute the transaction later, pointing to the lack of verifiable signature as evidence that the transaction was carried out by a third party.
What's the time limit to respond to code UA11 chargebacks?
The acquirer or merchant has 30 days to respond to a chargeback filed under reason code UA11.
How can merchants fight code UA11 chargebacks?
- A copy of the transaction receipt showing a valid and legible signature.
- Transaction documentation that includes a full and legible imprint of all security features required to be embossed on the card.
How can merchants prevent code UA11 chargebacks?
The best way to prevent code UA11 chargebacks is to use EMV-compatible payment terminals and always use the EMV chip to process transactions, avoiding using the magnetic stripe or keyed entry.
Every transaction should include some reliable method of verifying the cardholder’s identity. If you can’t do a chip transaction, obtaining a signature is the next best thing.
Whenever you receive a retrieval request from Discover related to a possibly fraudulent card-present transaction, always include a copy of the receipt and any other transaction documents that include the cardholder’s signature.
The following best practices can help you avoid this kind of chargeback:
- Obtain proper authorization from the cardholder at the time of sale.
- Have the cardholder sign the transaction receipt.
- If your payment terminal or other device used for payment processing cannot recognize or read the card’s magnetic stripe, you can request authorization by keying in the account number. Be sure the key-entered account number matches the account number on the card and print the information on the face of the card on the order receipt that will be signed by the cardholder.
- If your payment terminal isn’t working, call the issuer for authorization approval and print the approval code on the order receipt that will be signed by the cardholder.
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.