Merchants who receive a chargeback for a transaction placed with a Mastercard card may encounter reason code 4855, 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 usually either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code 4855 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Mastercard Chargeback Reason Code 4855?
Mastercard chargeback reason code 4855 falls under the “Cardholder Disputes” category. The shorthand description is “Goods or Services Not Provided.” This is now an obsolete reason code, but merchants may still see it in use at times. It was used to cover situations where the cardholder did not receive the goods or services they purchased.
Currently, Mastercard is in the process of updating their chargeback regulations and reason codes. Issuers are still allowed to use reason code 4855, but this code will soon be retired. Issuers have been instructed to use reason code 4853 instead.
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 non-receipt of goods or services that the cardholder paid for.
Sometimes, merchant error causes this chargeback. There may be delivery delays that are not communicated to the cardholder, or perhaps the merchant never informed them that an order was available for pick-up.
It is not uncommon for cardholders to falsely claim that they never received a shipment and file a friendly fraud chargeback, effectively engaging in cyber-shoplifting.
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. This reason code may include transaction modifiers that require specific forms of evidence.
If you have already provided a credit to the cardholder’s Mastercard account to resolve this dispute, no chargeback response should be necessary.
Otherwise, your chargeback response should include the following:
- If the chargeback carries the “Digital Goods at or Under $25 USD” modifier, include proof that you provided at least one of the following minimum purchase controls at the time the transaction took place:
- An option, set as the default, to disable all digital goods purchases.
- The timeframe in which digital goods can be purchased does not exceed 15 minutes from when the cardholder enters their login credentials.
- The cardholder is allowed to confirm or cancel pending digital goods purchases, with the amount clearly shown, before the transaction is finalized.
- If the chargeback carries the “European Transaction for Travel Services” modifier, include documentation that establishes that the services were covered by a bonding authority, insurance provider, or consumer protection scheme. Note that a statement from the acquirer to this effect is generally not considered to be sufficient evidence.
- Proof that the cardholder did in fact receive the goods or services, such as signed delivery confirmation.
- If you have already processed a refund for the transaction in question, provide documentation that proves you have credited the cardholder’s account.
- If you have resolved the issue directly with the cardholder, provide proof, such as written correspondence, that proves they no longer wish to dispute the charge.
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 because the cardholder did not receive the goods or services they purchased.
The following best practices can help you avoid this kind of chargeback:
- Double check orders to make sure you ship the correct items.
- Inform cardholders when their order has shipped and let them know the estimated delivery date. If possible, provide tracking information.
- Use signed delivery confirmation.
- Make sure orders are ready and available for pickup on the date specified.
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.