Chargeback Reason Code 4837 – prevent and win

What is Mastercard chargeback reason code 4837, no cardholder authorization, and how can you win it? Don’t waste time defending chargebacks, make your company more profitable by preventing them. Combine card acceptance rules compliance with the latest technology to shift fraud liability is the number one method to prevent chargebacks.

What is Mastercard chargeback reason code 4837, no cardholder authorization?

The cardholder did not authorize the transaction.

What are some reasons why this happens when there is an existing relationship with the customer?

  • The card issuer can initiate a chargeback for invalid authorization; for example, a card present authorization was not settled within 24 hours
  • The merchant has a stored card on file, but did not follow proper protocols for storing and using stored cards.

Key Examples To Shifting Fraud Liability

  • Card present, support EMV chip and pin debit
  • Ecommerce, use cardholder authentication with 3D Secure which shifts liability for this type of situation back to the issuer.
  • Phone orders- comply with card not present authorization rules, including settlement time frames

While the steps above may seem simple, most developers, consultants and merchants are unaware of the nuances for authorization compliance. The assumption is that the payment gateway supports all merchant needs, but that is not the case. As rules complexities continue to increase, many payment gateways, regardless of size, have failed to keep up. This creates new risk for merchants who are unaware, and nobody is informing them otherwise.

Want a 3DSecure v2.2.0 compliant payment gateway for your business? Call Christine Speedy, 954-942-0483, 9-5 ET.

Visa chargeback reason codes

The complete current Official Visa chargeback rules and reason codes are available for PDF download. A few of the most common codes are listed here as well.

Visa Chargeback Reason Code 60: Request Copy Illegible or Invalid

EDITORS NOTE: This is a tough one for most retailers to defend because they cannot go back in their files and find the receipt, or they have a copy on carbonless paper that has also become illigible with age.  Our CenPOS technology solution with signature capture retrieval provides instant access to the records you need to defend this type of chargeback. Additionally, with right processing solution, you can also manage all chargebacks from a simple control panel.

Reason Code 75: Cardholder Does Not Recognize Transaction

A lot of times this results from a dba name not being on the record.

Reason Code 57: Fraudulent Multiple Transactions

This chargeback does not apply to recurring payments or to mail order, telephone order, or Internet transactions.

Cashier mistakes are a common cause. Again, this can be eliminated with CenPOS technology for larger operations.

Chargeback Reason Code 81: Fraudulent Transaction Card-Present Environment

You can easily defend this with a signed receipt. Again, CenPOS payment processing platform with Signature Capture puts signed receipts at your fingertips.

Rules for Visa Merchants and chargeback reason codes

Mastercard chargeback reason codes

The official Mastercard chargeback reason codes as of May 2009 are available in PDF form. Some excerpts of the more common codes and their reasons follow:

chargeback Reason Code 4801 Requested Transaction Data Not Received

Proper Use of Message Reason Code 4801
The issuer may charge back the amount of the requested item using message reason code 4801 if it did not receive an original, substitute draft, or copy of  a transaction information document (TID) within 30 calendar days following  the Central Site Business Date of the Retrieval Request/1644-603 message. … For example, if a cardholder requested a copy of the transaction information document for his or her records

Chargeback Message Reason Code 4808 Requested/Required Authorization Not Obtained

The issuer may charge back a transaction under this message reason code if
one of the following circumstances occurs:
-The transaction was face-to-face, card-read or key-entered, occurred at a location with a POS device that had both online and magnetic stripe-read capability, and was not authorized.
– The transaction was non face-to-face and was not authorized.
– The transaction amount exceeded the floor limit established by MasterCard in effect at the time of purchase, and was not authorized.
-The authorization request was declined, even if the transaction was below the card acceptors floor limit.
– Technical fallback and CVM fallback transactions that were not authorized.

Chargeback Message Reason Code 4840—Fraudulent Processing of Transactions
This message reason code can be used if the cardholder states in a letter that:
– The cardholder or anyone authorized by the cardholder was still in possession and control of all valid cards at the time of the transaction, and
– The cardholder admits to at least one legitimate face-to-face transaction on Oct 2008 the same card at a given card acceptor location, but denies making one or more additional face-to-face transactions at that same card acceptor location. The chargeback must reflect the entire amount of the transaction in question.

EDITORS NOTE: Our CenPOS technology solution is available for pennies per transaction for retail stores. The signature capture retrieval provides instant access to the records you need to defend this type of chargeback if the consumer actually made all the charges. Additionally, with right processing solution, you can also manage all chargebacks from a simple control panel.

Chargeback Message Reason Code 4841Cancelled Recurring Transaction
-The card acceptor continued to bill a cardholder for a recurring transaction, such as bimonthly, monthly, and semiannual billings of insurance premium, computer service, or a book-of-the-month club, after receiving notification of cancellation from the cardholder or issuer.

Chargeback Message Reason Code 4842 Late Presentment
– More than seven calendar days after the transaction date and the transaction
was completed with electronically recorded card information (whether
card-read or key-entered); or
– More than 30 calendar days after the transaction date, and…

official Mastercard chargeback reason codes (link to MasterCard) See link under popular downloads for the latest release.

EDITORS NOTE: You can reduce chargebacks caused by fraud with full PCI Compliance, signature capture and additional anti-fraud protection both at the cashier level and with special online protections. If you have too many chargebacks that you feel were avoidable, please contact us for further consulting. The right tools make chargeback prevention and management much simpler. These range from free to pennies per transaction.