Chargebacks
Chargebacks
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What is a (Cards) Chargeback?
When a cardholder pays with a credit card or debit card, there is a possibility to file for a chargeback within 180 days after the purchase or delivery of the order. For example, if there is an issue with the order. To initiate a chargeback, the cardholder must, of course, provide a reason for reversing the order. If a chargeback is raised, the cardholder's bank (referred to as the Issuer) notifies Buckaroo's Credit Card Acquirer (e.g. Worldline, EMS, AMEX, or Worldpay). Such a reversal is called a chargeback.
How to handle a Chargeback?
We will inform you about a chargeback via email. You can object to the chargeback, so it is essential to respond as quickly as possible to a chargeback notification due to the limited response time.
The response time you have depends on the Credit Card Acquirer:
- EMS (7 days)
- Worldpay (12 days)
- Worldline (14 days)
- AMEX (20 days)
By eMail we will ask you to provide evidence. For example proof of a product delivery. We will then submit this evidence to the party responsible for handling the chargeback. The type of defence material you have to provide depends on the reason specified for the chargeback, as explained below under 'Which documents should I submit?'
Chargeback Outcome:
In the Buckaroo Plaza, you can check the status of chargebacks under Transactions. If the card Issuer accepts a chargeback as raised by a cardholder, the transaction amount and chargeback fees will be deducted from your available balance. Based on the defence material you have submitted, an assessment will be made regarding the legitimately of the chargeback as filed. You can find the outcome of a chargeback in the Plaza or you will receive a Dispute letter. It depends on the Acquirer which has been used.
Reason Codes for Chargeback:
Below is a list of all the reason codes for chargebacks from VISA, MasterCard and AMEX. The cardholder will specify the reason for requesting a (partial) payment reversal in its chargeback request. Based on this information, the card Issuer assigns a 'reason code' to the chargeback, which depends on the credit card brand.
Visa
Fraud
| Reason Code | Reason | Description |
|---|---|---|
| 10.1 | EMV Liability Shift Counterfeit Fraud | The cardholder is claiming that They did not authorise or participate in a transaction that you submitted. The terminal was not EMV compliant. |
| 10.2 | EMV Liability Shift Non-Counterfeit Fraud | The cardholder is claiming that they did not authorise or participate in a transaction that you processed. The terminal was not EMV compliant. |
| 10.3 | Other Fraud-Card Present Environment | The cardholder is claiming that they did not authorise or participate in a key-entered or unattended transaction conducted in a card-present environment. |
| 10.4 | Other Fraud-Card Absent Environment | The cardholder did not authorise or participate in a transaction conducted in a card-absent environment (such as internet, mail-order, phone-order, etc.). |
From mid April 2023, Visa will enforce the Visa Compelling Evidence 3.0 standard that has specific defense requirements for chargebacks with this reason code.
| Reason Code | Reason | Description |
|---|---|---|
| 10.5 | Visa Fraud Monitoring Program | Visa notified the cardholder's bank that the Visa Fraud Monitoring Program (VFMP) identified the transaction and the cardholder's bank has not successfully disputed the transaction under another dispute condition. |
Authorization
| Reason Code | Reason | Description |
|---|---|---|
| 11.1 | Card Recovery Bulletin | The transaction was below the ‘your floor limit’ and was not authorised. |
| 11.2 | Declined Authorization | An Authorization Request was declined. |
| 11.3 | No Authorization | The payment could not be authorised. |
Processing Errors
| Reason Code | Reason | Description |
|---|---|---|
| 12.1 | Late Presentment | The transaction was not sent to Visa within the timeframe required. |
| 12.2 | Incorrect Transaction Code | A cardholder claims the converted amount of charge on an international transaction is incorrect. |
| 12.3 | Incorrect Currency | You sent a transaction that was processed with an incorrect currency code. Often the cardholder was not advised or did not agree that Dynamic Currency Conversion (DCC) would occur. |
| 12.4 | Incorrect Account Number | You either processed the transaction to an incorrect account number or did not authorise the transaction and it was processed to an account number not on the issuer's master file. |
| 12.5 | Incorrect Amount | The cardholder claims that the amount they agreed to pay differs from the amount charged. |
| 12.6 | Duplicate Processing/Paid by Other Means | The cardholder claims that a single transaction was processed more than once or the cardholder claims that they paid for the merchandise or service by other means (such as cash, check, other card, etc.). |
| 12.7 | Invalid Data | An authorization was obtained using invalid or incorrect data. |
Consumer disputes
| Reason Code | Reason | Description |
|---|---|---|
| 13.1 | Merchandise/Services Not Received | The cardholder claims that merchandise or services that they ordered were not received or that the cardholder canceled the order as the result of not receiving the merchandise or services by the expected delivery date (or merchandise was unavailable for pick-up). |
| 13.2 | Canceled Recurring | A recurring transaction was processed after it was canceled or that the cardholder's account was closed. |
| 13.3 | Not as Described or Defective Merchandise/Services | The cardholder claims the goods were not as described or disputes the quality of the merchandise or services. |
| 13.4 | Counterfeit Merchandise | The merchandise was identified as counterfeit by a third party. |
| 13.5 | Misrepresentation | The cardholder's bank received a notice from the cardholder claiming that the terms of the sale were misrepresented. |
| 13.6 | Credit not Processed | The cardholder's bank received a notice from the cardholder claiming that they received a credit or voided transaction receipt that has not been processed. |
| 13.7 | Canceled Merchandise/Services | The cardholder's bank received a notice from the cardholder stating that they returned merchandise or canceled services, but the credit has not appeared on the cardholder's Visa statement. |
| 13.8 | Original Credit Transaction Not Accepted | The original credit was not accepted. |
Mastercard
Fraud
| Reason Code | Reason | Description |
|---|---|---|
| 4837 | No Cardholder Authorization | The cardholder states that they, nor anyone authorised by them, engaged in the transaction. |
| 4840 | Fraudulent Processing of Transactions | The cardholder claims that a fraudulent purchase was made while the card was in the cardholder's possession at the time of the transaction. |
| 4849 | Questionable merchant activity | The acquirer processed a transaction that was listed in a Mastercard Global Security Bulletin for violating GMAP, QMAP, or reported to SAFE. |
| 4863 | Cardholder does not recognize – Potential Fraud | The cardholder claims that they do not recognize the transaction and states that they did not authorise the charge to their credit card. |
| 4870 | Chip Liability Shift | The cardholder claims they were in possession of a valid card on the date of transaction but they did not authorise or participate in the transaction. |
| 4871 | Chip/PIN Liability Shift | The cardholder claims they were not in possession of a valid card on the date of transaction and they did not authorise or participate in the transaction. |
| 4999 | Domestic Chargeback Dispute (Europe region only) | The issuer can supply this message for a domestic chargeback that doesn't meet another chargeback categorization. |
Authorization
| Reason Code | Reason | Description |
|---|---|---|
| 4835 | Card Not Valid or Expired | A transaction completed with an expired card. |
| 4807 | Warning Bulletin File | The payment could not be authorised. |
| 4808 | Requested /Required Authorization not obtained | The payment could not be authorised. |
| 4812 | Account Number Not on File | Account number does not correspond to the account numbers the issuer has on file for this cardholder. |
Processing Errors
Following the Mastercard dispute guidelines, processing error chargebacks are filed under reason code 4834 - Point of Interaction Error. This reason code covers the following scenarios:
| Reason Code | Description |
|---|---|
| 4834 | The cardholder paid twice for the same transaction using two different forms of payment |
| 4834 | The cardholder's account has been debited more than once for the same transaction using the same form of payment |
| 4834 | The cardholder was billed an incorrect amount |
| 4834 | Cash was not properly dispensed by an ATM |
| 4834 | The cardholder's account has been debited more than once for the same ATM transaction |
| 4834 | The cardholder was billed for loss, theft, or damage in the same transaction as the underlying initial service |
| 4834 | A dispute regarding Point of Interaction Currency Conversion (Dynamic Currency Conversion) |
| 4834 | The cardholder was billed an unreasonable amount (intra-EEA Transactions, domestic transactions in EEA countries, transactions between an EEA country and Gibraltar or the UK, Gibraltar domestic transactions, and UK domestic transactions) |
| 4834 | The cardholder paid an improper merchant surcharge (intra-European and inter-European transactions only) |
| 4834 | The merchant processed a credit (instead of a reversal) to correct an error which resulted in the cardholder experiencing a currency exchange loss |
| 4834 | The acquirer presented a transaction past the applicable time frame |
The following reason codes can still be used, but will disappear in the future:
| Reason Code | Reason | Description |
|---|---|---|
| 4831 | Transaction amount differs | The cardholder claims that the amount they agreed to pay differs from the amount charged. |
| 4842 | Late Presentment | The transaction was not sent to Mastercard within the timeframe required. |
| 4846 | Correct Transaction Currency Code not provided | A cardholder claims the converted amount of charge on an international transaction is incorrect. |
| 4850 | Credit Posted as a Purchase | When an account is posted a debit in place of a credit by mistake. |
Consumer disputes
Following the Mastercard dispute guidelines, consumer dispute chargebacks are filed under reason code 4853 - Cardholder Dispute. This reason code covers the following scenarios:
| Reason Code | Description |
|---|---|
| 4853 | Services not provided/Merchandise not received. |
| 4853 | Canceled recurring transaction. |
| 4853 | Goods not as described/defective. |
| 4853 | Counterfeit merchandise. |
| 4853 | Credit not processed. |
| 4853 | Addendum dispute or “no-show” hotel charge was billed. |
| 4853 | Purchase transaction did not complete. |
| 4853 | Credit posted as a purchase. |
The following reason codes can still be used, but will disappear in the future:
| Reason Code | Reason | Description |
|---|---|---|
| 4841 | Cancelled Recurring Transaction | A recurring transaction was processed after it was canceled or that the cardholder's account was closed. |
| 4854 | Not Elsewhere Classified (U.S. region only) | The cardholder claims they are unhappy with the goods or services provided and that they have been unable to resolve the situation. |
| 4855 | Non receipt of merchandise | The cardholder claims that merchandise or services that they ordered were not received or that the cardholder canceled the order as the result of not receiving the merchandise or services by the expected delivery date (or merchandise was unavailable for pick-up). |
| 4860 | Credit not Processed | The cardholder's bank received a notice from the cardholder claiming that they received a credit or voided transaction receipt that has not been processed. |
| 6305 | Cardholder does not agree with amount billed | The cardholder claims that the amount they agreed to pay differs from the amount charged. |
American Express
Based on the region in which you have set up American Express, you will receive reason codes from one of these columns:
Reason Code North-America: Canada and United States of America
Reason Code: All other countries
Fraud
| Reason Code | Reason Code North-America | Reason | Description |
|---|---|---|---|
| 4540 | F29 | Card Not Present (fraud) | The cardholder denies participation in a mail; telephone or internet-type transaction. |
| 4763 | FR2 | Full recourse | A cardholder is claiming that they did not authorise or participate in a transaction that you processed. |
| 4798 | F30 | Fraud Liability Shift – Counterfeit | A cardholder is claiming that they did not authorise or participate in a transaction that you processed. |
| 4799 | F31 | Fraud Liability Shift – Lost/Stolen/Non-Received | A cardholder is claiming that they did not authorise or participate in a transaction that you processed. |
| 4534 | F24 | No Card Member Authorization | The cardholder denies participation in the charge submitted and you have failed to provide proof that the cardholder participated in the charge. |
| - | FR4 | Placed in Immediate Chargeback Program | The cardholder has disputed the charge and you have been placed in the Immediate Chargeback Program. |
| - | FR6 | Placed in the Partial Immediate Chargeback Program | The cardholder has disputed the charge and you have been placed in the Partial Immediate Chargeback Program. |
Authorization
| Reason Code | Reason Code North-America | Reason | Description |
|---|---|---|---|
| 4521 | A02 | No Valid Authorization | The payment could not be authorised. |
| - | A01 | Incorrect Transaction Amount Presented | Charges were incorrectly submitted by using an incorrect amount. |
| - | A08 | Authorization Approval Expired | The payment could not be authorised because the transaction expired. |
| 4751 | - | Expired Authorization | The payment could not be authorised because the transaction expired. |
Processing Errors
| Reason Code | Reason Code North-America | Reason | Description |
|---|---|---|---|
| 4507 | P05 | Incorrect Transaction Amount Presented | Charges were incorrectly submitted by using an incorrect amount. |
| 4512 | - | Multiple Processing | A charge was incorrectly submitted more than once to the cardholders account. |
| - | P08 | Duplicate Charge | The cardholder claims that a single transaction was processed more than once. |
| 4522 | - | Authorization Declined | An Authorization Request was declined. |
| 4523 | P01 | Unassigned C/M Account Number | Account number does not correspond to the account numbers the issuer has on file for this cardholder. |
| 4525 | - | Transaction Amount Changed | The cardholder claims that the amount they agreed to pay differs from the amount charged. |
| 4530 | - | Currency Discrepancy | The cardholder was advised the charge is in a currency that differs from that which they originally agreed upon. |
| - | P23 | Currency Discrepancy | A cardholder claims the converted amount of charge on an international transaction is incorrect. |
| 4536 | P07 | Late Presentment | A charge was submitted for payment outside the timeframe. |
| 4752 | P03, P04 | Credit/Debit Presentment Error | When an account is posted a debit in place of a credit by mistake. |
| 4755 | - | No Valid Approval Code | A transaction where Authorization was required but not obtained. |
| 4758 | F22 | Expired/Not Yet valid card | A transaction completed with an expired card. |
Consumer disputes
| Reason Code | Reason Code North-America | Reason | Description |
|---|---|---|---|
| 4515 | C14 | Paid through Other Means | The cardholder provided proof of payment by another method. |
| 4532 | - | Damaged and/or Defective Goods/Services | The cardholder disputes the quality of the merchandise or services. |
| 4544 | C28 | Cancelation of Recurring Goods/Services services | Cardholder claims that their account continues to be billed for recurring goods or services that they had previously canceled or revoked. |
| 4554 | C08 | Goods and Services Not Received | The cardholder claims that the goods or services that were purchased at your business have not been received. |
| 4754 | - | Local Regulatory/Legal Dispute | The cardholder alleges that a law or regulation was not followed. |
| - | C02 | No Credit Received | A credit has not been applied to cardholders account for either: goods/services canceled; an advance deposit/ payment or a no show reservation. |
| - | C04 | Goods and Services not Received/Refused | The cardholder claims that the goods or services that were purchased at your business have not been received or have been refused. |
| - | C05 | Goods Returned/Canceled | The cardholder claims that the goods/services ordered were canceled. |
| - | C31 | Not as Described | The goods or services received from your business were either not as described by your business or the price should be lower than that claimed by your business. |
| - | C32 | Damaged and/or Defective Goods/Services | The cardholder disputes the quality of the merchandise or services. |
Which documents should you provide per Reason Code?
The requirements for defending against Chargebacks vary depending on the Chargeback reason. For all types of Chargeback Reason Codes, you must provide documents containing transaction details so that it substantiates your Chargeback defense.
Fraud - Card not present transaction
The cardholder claims he did not authorize or participate in the transaction. You must proof/demonstrate that the cardholder legitimately made the purchase of a service or merchandise.
Without a 3D Secure Liability shift, it is difficult to challenge a claim in this category. Defense documents should only be provided if all requirements are met. Buckaroo will request the respective 3DS Server logs for you as a Merchant.
| If you haven't activated 3D Secure and still wishes to defend against the dispute, you must provide the following: |
|---|
| Documentation that proofs that you have provided the service to the cardholder (confirmation email, copy of the invoice). |
| Email correspondence with the cardholder. |
| DHL-signed proof of delivery and AVS agreement. |
| The GPS location of the courier indicating the product has been delivered. |
Fraud - Card Present Transaction
The cardholder claims he did not give permission or did not participate in the transaction in a card-present environment.
| To defend against this dispute, you must provide the following: |
|---|
| Copy of a (signed) transaction receipt. |
Duplicate processing/Paid by another means
The cardholder claims a single transaction was processed more than once.
| In order to defend against this dispute, you must provide the following: |
|---|
| Invoice copy of two separate orders. |
| Documentats to demonstrate that no other form of payment has been used. |
Services not rendered/Merchandise not received
The cardholder claims that goods or services as ordered were not received or not received on time.
| To defend against this dispute, you must provide the following: |
|---|
| Description of the goods/merchandise. |
| DHL-signed proof of delivery and AVS agreement. |
| Communications confirming the cardholder's possession of the goods. |
| Explanation for the shipment delay. |
| Confirmation email. |
| Evidence that the cardholder received the service at the agreed-upon date and time. |
| Communication with the cardholder after the payment. |
Cancelled goods/services
The cardholder's bank has received a message from the cardholder stating that the goods have been returned or the services have been cancelled, but the credited amount has not appeared on the cardholder's statement.
| To defend against this dispute, you must provide the following: |
|---|
| Invoice copy / confirmation email. |
| Evidence that the cardholder has received your cancellation or return policy and has not cancelled according to the publicly disclosed policy. |
| Proof that the cardholder initially received the merchandise and did not return it. |
| Proof that the cardholder has not contacted you to resolve the issue or cancel the purchase. |
| Demonstrate that the cardholder has received your cancellation or return policy and has not cancelled according to the publicly disclosed policy.Toon aan dat de kaarthouder uw annulerings- of retourbeleid heeft ontvangen en niet heeft geannuleerd volgens het openbaar gemaakte beleid. |
Recurring transaction cancelled
A recurring transaction was processed after it was cancelled or after the cardholder's account was closed.
| To defend against this dispute, you must provide the following: |
|---|
| Demonstrate that the cardholder has received your cancellation or return policy and has not cancelled according to the publicly disclosed policy. |
| Proof that the cardholder did not return the merchandise. |
| Proof that the cardholder received a notice of impending billing 10 days before the transaction. |
| Proof that services have been used between the billing date and the cancellation date. |
| The cardholder requested a cancellation for a different date and that services have been provided until that date. |
| Evidence that the cardholder is still interested in the service. |
Goods not as described/defective
The cardholder claims that the goods were not as described or disputes the quality of the goods or services.
| To defend against this dispute, you must provide the following: |
|---|
| Evidence that the cardholder has not contacted you to resolve the issue or did not return the merchandise. |
| Proof to demonstrate that the merchandise was as described or not damaged or defective. |
| If the goods have been replaced/repaired, you should provide a DHL-signed proof of delivery. |
| Email communication with the cardholder. |
Counterfeit Goods
The goods were identified by the customer or a third party, such as a customs agency, as counterfeit.
| To defend against this dispute, you must provide the following: |
|---|
| Invoice copy. |
| Neutral third-party opinion. |
| Certificate of authenticity. |
Misrepresentation of the purchased good and/or service
The cardholder claims that the terms of sale (Terms and Conditions) have been misrepresented.
| To defend against this dispute, you must provide the following: |
|---|
| Evidence that your terms and conditions were clearly communicated before the transaction was processed. |
| Evidence that the cardholder acknowledged your Terms and Conditions (e.g., a screenshot of your website's checkout page showing that the cardholder accepted the Terms and Conditions by checking a box before proceeding with the payment). |
Credit not processed
The cardholder claims that you agreed to refund the cardholder, but the refund was not processed, or that you did not process a credit when the cardholder canceled or returned goods, canceled services, or canceled a guaranteed reservation.
| To defend against this dispute, you must provide the following: |
|---|
| Proof that a credit or chargeback issued by you was not handled by the issuer. |
| Proof that the cardholder has not returned or has not attempted to return the merchandise. |
| Proof that the cardholder's return does not comply with your written policy. |
Mastercard 4853 – Cardholder Dispute
| The cardholder contacts its issuer and claims that one of the following dispute reasons applies: |
|---|
| Services not rendered/Merchandise not received. |
| Cancelled recurring transaction. |
| Goods not as described/defective. |
| Counterfeit merchandise. |
| Credit not processed. |
| Addendum dispute or "no-show" hotel charges have been billed. |
| Purchase transaction not completed. |
| Credit has been posted as a purchase. |
Since Mastercard has combined the above eight dispute reasons into one reason code, there is no opportunity to obtain additional information about the underlying reason why a 4853 dispute has been raised.
We recommend you will try to determine which dispute reason(s) may apply and provide as much evidence as possible to ensure the defense is valid. To defend against the last three of the above-mentioned dispute reasons, please find the defense requirements below.
| If you suspect the cardholder is claiming an addendum or disputing a "no-show" hotel charge: |
|---|
| Provide evidence to demonstrate that the cardholder is responsible for the addendum or the "no-show" fee. |
| If you suspect the cardholder is claiming that the purchase transaction was not completed: |
|---|
| Provide evidence to show that the transaction was correctly completed and that the cardholder received confirmation of completion. |
| If you suspect the cardholder is claiming that the credit was posted as a purchase: |
|---|
| Provide evidence to prove that the transaction was correctly posted as a credit to the cardholder's account. |
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