Merchants who receive a chargeback for a transaction placed with a Mastercard card may encounter reason code 4842, 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 is usually merchant error. Merchants who believe they have received an invalid chargeback under reason code 4842 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Mastercard Chargeback Reason Code 4842?
Mastercard chargeback reason code 4842 falls under the “Point-of-Interaction Error” category. The shorthand description is “Late Presentment.” When a merchant sees this reason code, it means that they presented a transaction to the cardholder’s issuing bank outside of the permissible timeframe for doing so.
This chargeback may be more commonly initiated by issuers rather than cardholders. You may receive it when you present a transaction more than seven calendar days after the initial transaction date and the cardholder’s account has since been permanently closed. It may also be applicable any time a transaction is presented more than 180 days after the original transaction date, regardless of the status of the cardholder’s account.
There are several steps involved in processing a credit card transaction, and they don’t all necessarily need to be completed on the same day. Time can pass between the initiation of a transaction, the request for authorization approval, and the final presentment of the transaction to the issuer. If the cardholder’s account is terminated in between these steps, or if the merchant simply waits too long to complete them all, the transaction may not be valid per Mastercard’s rules and this chargeback may apply.
What Scenarios Might Lead to This Chargeback?
Merchant error is almost always the root cause behind this chargeback. Usually, transactions are started and completed within a very short window of time—a few minutes, while the customer is standing there. In ecommerce, customers have come to expect near-instantaneous transaction processing in the moment of time between checking out and waiting for the confirmation page to load.
But sometimes, merchants have some reason to wait before submitting a transaction in progress. This may be because certain transaction details have yet to be finalized, or because the transaction depends on some other conditions being met, like figuring out how the product will be delivered or whether or not it’s in stock and available yet.
When delays push a transaction outside of the acceptable presentment timeframe, or the customer closes their account, the transaction may no longer be valid once it has been presented, and the merchant will find themselves facing this chargeback.
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 basis for it is false or incorrect. Your chargeback response should include at least one of the following items:
- Proof that presentment occurred within seven calendar days of the transaction date.
- Proof that the cardholder’s account has not been permanently closed.
How Can Merchants Prevent this Chargeback Code?
In most cases, a transaction will go from start to finish in a relatively short span of time. However, sometimes there are good reasons to delay or extend transaction processing, and immediate presentment may not be feasible.
When this occurs, it is important to be aware of the timeframes you need to operate under, and to be careful not to let too much time elapse.
Sometimes it may be better to cancel the transaction and start over, if circumstances permit.
The following best practices can help you avoid this kind of chargeback:
- Always obtain authorization approval for every transaction you process.
- Always present transactions to the issuing bank within the allowable timeframe.
- Send completed transactions to your payment processor as soon as possible—preferably on the day of sale.
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.