MasterCard Chargeback Reason Code 4860: Cardholder Disputes

chargeback reason code 4860

Table of Contents

  1. What is Mastercard chargeback reason code 4860?
  2. What causes code 4860 chargebacks?
  3. What's the time limit to respond to code 4860 chargebacks?
  4. How can merchants fight code 4860 chargebacks?
  5. How can merchants prevent code 4860 chargebacks?
  6. About Mastercard chargeback reason codes

Note: Mastercard has discontinued the use of reason code 4860, merging it into code 4853.

Merchants who receive a chargeback for a transaction placed with a Mastercard card may encounter reason code 4860, 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 4860 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.

What is Mastercard chargeback reason code 4860?

Mastercard chargeback reason code 4860 falls under the “Cardholder Disputes” category. The shorthand description is “Credit Not Processed.” Mastercard has retired this reason code, but it was used when the cardholder claimed they never received a refund or credit the merchant promised them.

In situations where reason code 4860 would have applied, issuers have been instructed to use reason code 4853 instead.

What causes code 4860 chargebacks?

In theory, merchants shouldn't receive chargebacks with reason code 4860 anymore. However, this chargeback would usually have been caused by the merchant forgetting to process a refund they promised or by a customer getting impatient while waiting for a refund.

Cardholders are generally entitled to a refund when they return a product, refuse delivery, receive a nonfunctional or damaged product, or experience some other issue that qualifies them for a refund under the merchant’s sales policy. It’s always in the best interests of the merchant to provide a timely refund under such circumstances, as this can help to avoid disputes and chargebacks. Refunds are always a cheaper and better option than dealing with a chargeback.

When a cardholder is told they will be receiving a refund and enough time elapses without the credit being processed, they are allowed to file for a chargeback.

However, it is not uncommon for customers to overlook a posted credit, which may result in a friendly fraud chargeback being filed in error. Some customers may engage in friendly fraud on purpose, asking their issuers for this chargeback when they were never promised a refund at all.

Get the guide, Chargebacks 101: Understanding Chargebacks & Their Root Causes

What's the time limit to respond to code 4860 chargebacks?

The acquirer or merchant has 45 days to respond to a chargeback filed under reason code 4860.

How can merchants fight code 4860 chargebacks?

While the reason code has been retired, chargebacks submitted under it are still valid and must be fought with relevant and compelling evidence. Merchants can fight code 4860 chargebacks with proof that a refund was issued or that the customer isn't entitled to one.

Your chargeback response should include one or more of the following items:

  • Proof that you have already issued the credit to which the cardholder was entitled.
  • Evidence that the cardholder has not attempted to return the merchandise.
  • Evidence that the cardholder’s claim to a refund is not allowed under your sales policies or any terms of the agreement that they signed.

How can merchants prevent code 4860 chargebacks?

  • Post your return and refund policies where customers will see them, and make them easy to follow and understand.
  • Accept returns and issue refunds promptly.
  • Use a purchase return authorization so the cardholder can see the pending refund.

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.