Merchants who receive a chargeback for a transaction placed with a Mastercard card may encounter reason code 4859, 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 generally either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code 4859 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Mastercard Chargeback Reason Code 4859?
Mastercard chargeback reason code 4859 falls under the “Cardholder Disputes” category. The shorthand description is “Addendum, No-Show, or ATM Dispute.” This reason code means the cardholder is claiming that they used their Mastercard to make an ATM withdrawal, and either received only part of the cash amount they requested or no cash at all, despite being charged for the full amount.
This reason code may also be applicable to disputed addendum or “no-show” charges, if the cardholder claims not to have agreed to such charges ahead of time.
What Scenarios Might Lead to This Chargeback?
The usual explanation for this chargeback, when it is legitimate and not friendly fraud, would be software or mechanical errors with the ATM—which would be considered merchant error, even though it is rarely due to any knowing action on the merchant’s part.
When ATMs are not maintained properly, updated with software patches, and serviced as needed, they may develop issues that can lead to cash getting stuck or improperly dispensed. Some machines may have dispensing mechanisms that make it easy for cardholders to leave disbursed cash behind, which can result in friendly fraud chargebacks bearing this reason code.
Friendly fraud can also result from cardholders counting their cash incorrectly, and of course intentional friendly fraud is always a possibility as well.
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. This reason code may include transaction modifiers that require specific forms of evidence. Your chargeback response should include the following:
- Proof that the cardholder agreed to the addendum or “no-show” charge and is responsible for paying it.
- Proof that the full cash amount was dispensed to the cardholder.
- If the chargeback carries the “ATM Transaction” modifier, include a legible copy of the ATM audit tape or an internal transaction report provided by the acquiring bank. This record must show the activity that occurred at the ATM immediately prior to and after the disputed transaction, and must include the following details:
- The PAN as read from the magnetic stripe (track 2) or EMV chip (DE 2).
- The transaction type and account that was accessed (DE 3).
- The transaction amount, in local currency (DE 4).
- The transaction trace or system trace audit number (DE 11).
- The date and time of the transaction (DE 12).
- The terminal ID (DE 41).
- The terminal status.
- An error report, which may show the terminal’s response to the last command sent by the interchange system, any retract indicators, and the bill counts for each canister.
- 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?
Merchants who own and operate ATMs should make sure they are serviced and updated regularly, and should stock machines with new, clean bills. The following tips can help you avoid this kind of chargeback:
- To prevent addendum or “no-show” disputes, inform the cardholder ahead of time about your policies and any circumstances that may lead to charges for loss, theft, or damage.
- Reconcile ATM transactions to cash in a timely manner in order to catch any discrepancies as soon as possible.
- If ATM logs indicate that a cardholder was shorted, notify them and provide an immediate transaction reversal or credit to correct the error.
- Address any errors, outages, balancing issues, hardware problems, or software glitches in your ATMs promptly.
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.