Table of Contents
- What is Mastercard chargeback reason code 4812?
- What causes code 4812 chargebacks?
- What's the time limit to respond to code 4812 chargebacks?
- How can merchants fight code 4812 chargebacks?
- How can merchants prevent code 4812 chargebacks?
- About Mastercard chargeback reason codes
Note: Mastercard has discontinued the use of reason code 4812, merging it into code 4808.
Merchants who receive a chargeback for a transaction placed with a Mastercard card may encounter reason code 4812, which indicates an improperly authorized transaction that the issuer does not believe they should be responsible for paying. The actual underlying cause of this chargeback is usually merchant error. Merchants who believe they have received an invalid chargeback under reason code 4812 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Mastercard chargeback reason code 4812?
Mastercard chargeback reason code 4812 falls under the “Authorization” category. The shorthand description is “Account Number Not On File.” This code is obsolete, and issuers have been instructed to use code 4808 instead. Code 4812 was used for transactions processed against invalid account numbers.
Issuers have been instructed to use reason code 4808 instead, on the grounds that any transaction submitted against a non-existent or invalid account number can't possibly have been authorized. Code 4808 covers authorization-related chargebacks.
What causes code 4812 chargebacks?
In theory, merchants shouldn't receive chargebacks with code 4812 anymore. However, the usual cause of this chargeback would have been a transaction that somehow made it all the way to the issuing bank despite not involving a valid Mastercard account number.
It is unusual for transactions invalid card numbers to be processed since the authorization approval step will provide a clear and immediate warning that the transaction can't go through.
However, there are ways to bypass authorization, which means that this error can occur under certain circumstances. Some examples would include:
- The merchant manually keyed in the transaction details and forced submission without authorization.
- The merchant processed a transaction against an expired or closed account.
- A fraudster or prankster deliberately entered a fake credit card number at checkout, and the merchant’s payment processing system did not catch the error.
- A software glitch or network issue corrupted the transaction data and caused an invalid number to be submitted.
Because all of these errors can be traced back to not following proper authorization protocols, Mastercard is now handling these scenarios as authorization-related chargebacks.
What's the time limit to respond to code 4812 chargebacks?
The acquirer or merchant has 45 days to respond to a chargeback filed under reason code 4812.
How can merchants fight code 4812 chargebacks?
Merchants can fight code 4812 chargebacks with proof that the account number shown on the transaction receipt is correct and matches a current and valid card number assigned to the cardholder.
How can merchants prevent code 4812 chargebacks?
All authorization-related chargebacks can be prevented by following proper authorization procedures. Always scan the EMV chip on cards that have them and ask the customer for another payment method if you receive a decline code.
Issuing banks aren’t supposed to use this code anymore, but if you receive a chargeback with this reason code, it means a chargeback was filed on the premise that an unauthorized transaction was somehow processed against an account number that is no longer on file or never existed in the first place.
Merchants should review the information for Mastercard chargeback reason code 4808 for further prevention advice, as this is the reason code that is intended to replace 4812.
In the meantime, the following best practices can help you avoid this kind of chargeback:
- Always obtain authorization approval for every transaction you process.
- Always use EMV-enabled payment terminals.
- Do not force unauthorized transactions to go through.
About Mastercard 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.
Mastercard specifies 21 reason codes under the categories of Fraud, Authorization, Point-of-Interaction Error, and Cardholder Disputes. Mastercard uses a four-digit numbering scheme for its chargeback reason codes.
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.