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Chargeback Management

Chargeback and post-transaction management is a critical component of any risk management strategy. In addition to providing three online training courses and two professional certifications related to chargeback management for an eCommerce or Card Not Present (CNP) channel merchant, lists several free educational resources as well. This includes:

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Related Training Resources

Credit Card Chargebacks


Chargeback Representment


Advanced Chargeback Analytics


Chargeback Specialist Certification


Chargeback Professional Certification


Chargeback Costs & Fraud Liability

Chargebacks were intended to provide a means for merchants, banks and consumers to resolve cases of abuse and fraud. While they accomplish this they have also created a lot of finger pointing and higher costs for everyone involved. 

The total cost of a chargeback can include refund of the sale, lost product and additional fees such as chargeback fees. For this reason many merchants go out of their way to resolve customer satisfaction complaints and have lenient refund policies. When it comes to true fraud, a merchant may have little-to-no recourse.

Online fraud costs more than the direct loss of product or service.

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Chargeback Representment

Technique Overview

Chargeback representment is the process by which a merchant can dispute a chargeback with an issuing bank. The re-presentment process allows merchants to present evidence to prove that a chargeback is not warranted.

The success rate for fighting chargebacks can vary greatly from merchant to merchant and from industry to industry. Some vendors offering outsourced representment services claim to have an 85% success rate on the chargebacks they select to represent. These vendors do not fight all chargebacks, they are selective in which ones they do fight.

Merchants do not have to turn to vendors or third party services for chargeback representment, they can handle it all in-house. Using compelling evidence will increase win rates.

Issuer Alerts

Technique Overview

Issuer Alerts are a form of data sharing between participating issuers and merchants where merchants receive notifications on transactions or disputes that the issuer is about to process into a chargeback, providing the opportunity for merchants to resolve the problem or refund the transaction and prevent a chargeback from occurring.

Issuer Alerts are provided to merchants through the service provider who receives notifications from the cardholder’s issuing bank. It may be that the issuer has identified fraudulent activity on a card before the cardholder does, or it may be that the cardholder initiated a dispute (fraud or non-fraud related) with the issuer but the issuing bank will first address the dispute with the merchant directly through the service provider rather than going through the chargeback process with the card association. This route can benefit both the issuer and merchant by avoiding the costs and operational processes associated with chargebacks.

Through Issuer Alerts, merchants are able to respond to disputes or avoid them entirely by refunding transactions before they hit the cardholder’s statement and before they become a chargeback. If detected early enough, merchants may be able to stop fulfillment or cancel shipment on a physical good. Merchants can also perform link analysis to find other orders associated with the ones in which Issuer Alerts were received.


Visa Chargeback Reason Codes

In April 2018 Visa made a major overhaul to the taxonomy and organization of chargebacks, which they now refer to instead as disputes. This included consolidating and removing some old reason codes and creating an organizational structure where all dispute codes fall under one of four categories, numbered 10 through 13. The format for the reason codes is the dispute category followed by dispute number within that category. For example group 10 is the Fraud dispute category, and the dispute reason code 10.4 represents the dispute description Other Fraud: Card-absent Environment.

MasterCard Chargeback Reason Codes

MasterCard uses four-digit numbers for their chargeback reason codes, each beginning with 48 as the first two digits. Some acquirers, processors or PSPs may just provide the last two digits of the reason code in their data reporting, as that is all that is needed to distinguish between the reason codes and recognize the chargeback description.


MasterCard eliminated some reason codes while condensing or combining others in 2016. There are now 19 different reason codes and while MasterCard does not group or categorize these in a way like Visa disputes, we have organized these into four similar groups below.

Discover Chargeback Reason Codes

Discover is unique in how they label reason codes in that they use an alpha and alpha-numeric labeling system. In some cases the use of letters groups chargebacks into a category, such as with the six chargeback reason codes beginning with UA which stands for Unauthorized. In many cases the letters used in the reason code are hints to convey the chargeback description, such as with DP representing Duplicate Processing and DA representing Declined Authorization. Other times the lettered reason code system is random or arbitrary, such as with reason code AA being for Cardholder Does Not Recognize chargebacks. 

AmEx Chargeback Reason Codes

American Express and Discover are similar in two ways that differentiate them from Visa and MasterCard. First, AmEx and Discover act as both the card network and card issuing bank, whereas Visa and MasterCard do not issue credit cards directly. Second, like Discover American Expresses uses alpha-numeric chargeback reason codes. American Express uses letters to categorize each reason code by chargeback description or reason. For example, fraud related chargebacks begin with F or FR, processing error chargebacks begin with P, authorization chargebacks begin with A and cardholder dispute chargebacks begin with C. Whereas the other card brands have done away with retrieval requests, American Express still has a few of these which they call inquiries.

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