Merchants who receive a chargeback for a transaction placed with a Mastercard card may encounter reason code 4831, which indicates an improperly processed transaction that the cardholder does not believe they should be responsible for paying. The actual underlying cause of this chargeback may be either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code 4831 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Mastercard Chargeback Reason Code 4831?
Mastercard chargeback reason code 4831 falls under the “Point-of-Interaction Error” category. The shorthand description is “Transaction Amount Differs.” This is now an obsolete reason code, but merchants may still see it in use at times. It was used for disputes in which the customer was claiming that the transaction amount that was processed was not the same amount they agreed to pay.
Currently, Mastercard is in the process of updating their chargeback regulations and reason codes. Issuers are still allowed to use reason code 4831, but this code will soon be retired.
Issuers have been instructed to use reason code 4834 instead, with the appropriate transaction modifier.
What Scenarios Might Lead to This Chargeback?
In theory, merchants should not be seeing chargebacks bearing this reason code anymore. However, issuing banks are still permitted to use it. The usual cause of this chargeback would have been that the merchant processed a transaction for an amount different than what was authorized or approved by the cardholder, or for an unreasonable amount exceeding what the cardholder agreed to as an acceptable range.
Merchant error is the leading cause of these chargebacks. When the conditions of a purchase change and the price is affected, merchants may make adjustments without first notifying the customer or seeking a new authorization approval. When the cardholder is unaware of these adjustments and did not agree to pay the new amount, they have grounds to dispute the transaction.
In some circumstances, cardholders may be asked to approve a variable amount to be charged later. If the transaction exceeds the maximum amount they agreed to pay, they can dispute this charge on the basis that the overcharge was unreasonable.
Sometimes cardholders forget about last-minute price adjustments or included fees, which can lead them to file friendly fraud chargebacks with this reason code.
What are the Important Timeframes?
Mastercard recommends that its cardholders file their dispute within 120 calendar days of placing the transaction. The acquirer and/or merchant have 45 calendar days to respond to this chargeback after it is filed.
How Can Merchants Fight this Chargeback Code?
Merchants can fight this chargeback if the cardholder’s claims are false. While the reason code has been retired, chargebacks submitted under it are still valid and must be fought with relevant and compelling evidence. Your chargeback response should include one or more of the following items:
- Documentation showing that the transaction was processed correctly and that the amount was authorized.
- If this is a dispute over a so-called unreasonable amount, include proof that the transaction did not exceed the amount range that the cardholder agreed to pay.
- If you have already processed a refund for the overcharge, provide documentation that proves you have credited the cardholder’s account.
How Can Merchants Prevent this Chargeback Code?
Issuing banks aren’t supposed to use this code any more, but if you see a chargeback show up with this reason code, it means that a chargeback was filed on the premise that the transaction amount was incorrect. Merchants should review the information for Mastercard chargeback reason code 4834 for prevention advice, as this is the reason code that is intended to replace 4831.
In the meantime, these tips can help you avoid this kind of chargeback:
- Double check transactions and their final charge amount before completing processing.
- Never change the transaction amount without first obtaining the cardholder’s consent.
- If the cardholder changes their mind mid-transaction and wishes to switch to a different payment method, void the transaction in progress immediately.
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 of 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.