Discover chargeback reason codes are specific numerical identifiers that help define the reasons for a cardholder’s dispute over a transaction.

These codes categorize Discover card chargebacks into various types, such as fraudulent transactions, service problems, or processing errors. By doing so, they facilitate efficient dispute resolution for merchants and cardholders alike.

Each reason code corresponds to particular circumstances surrounding the dispute, providing clarity in the chargeback process and guiding the necessary steps for both parties. Understanding these codes is essential for merchants to effectively manage disputes and minimize potential losses associated with chargebacks.

The Purpose of Discover Chargeback Reason Codes

The purpose of Discover card chargeback reason codes is to streamline the dispute resolution process by clearly defining the specific grounds on which a cardholder disputes a transaction.

These reason codes serve to categories disputes into understandable segments. For example, they may mark a dispute as being the result of fraud, service issues, or errors in processing. This aids both merchants and cardholders in resolving conflicts efficiently.

By providing a structured framework, these codes not only enhance communication between the involved parties but also ensure that appropriate actions are taken to investigate and address each dispute. Ultimately, understanding these codes helps merchants enhance their response strategies, mitigate potential losses, and improve overall customer satisfaction.

List of Discover Chargeback Reason Codes: By Category

The list of Amex chargeback reason codes can be divided into a few different subgroups. We’ve outlined these below:

Cardholder Dispute

• AA — Cardholder Does Not Recognize

• AP — Canceled Recurring Transaction

• AW — Altered Amount

• CD — Credit Posted as Card Sale

• DP — Duplicate Processing

• IC — Illegible Sales Data

• NF — Non-Receipt of Cash from ATM

• PM — Paid by Other Means

• RG — Non-Receipt of Goods or Services

• RM — Quality Discrepancy

• RN2 — Credit Not Received

Authorization

• AT — Authorization Non-compliance

• DA — Declined Authorization

• EX — Expired Card

• NA — No Authorization

Processing Errors

• IN — Invalid Card Number

• LP — Late Presentment

Not Classified

• NC — Not Classified

Fraud

• UA01 — Fraud / Card Present Environment

• UA02 — Fraud / Card-Not-Present Environment

• UA05 — Fraud / Counterfeit Chip Transaction

• UA06 — Fraud / Chip-and-Pin Transaction

• UA10 — Request Transaction Receipt (swiped card transactions)

• UA11 — Cardholder claims fraud (swiped transaction, no signature)

The Reason Code Is Not Always Correct

Chargeback reason codes play a crucial role in reducing uncertainty and simplifying the decision-making process. By adopting these codes, all parties involved can readily understand the rationale behind a chargeback.

While issuing banks do not have to clarify their decisions, acquiring banks and merchants gain valuable insights into the necessary documentation for representment. This approach appears sensible, yet the challenge lies in the reality that not every chargeback is warranted.

Studies show an increasing pattern of chargebacks being submitted for reasons that do not align with the designated codes. Issues like buyer’s remorse, fraud committed by relatives, or problems with non-returnable products lack appropriate chargeback codes. As a result, consumers might try to circumvent this restriction by falsely asserting that the transaction was fraudulent, a tactic referred to as “friendly fraud.”

Although friendly fraud may occasionally stem from errors or misinterpretations, many merchants view it as a deliberate effort to obtain goods or services without payment, resembling the act of shoplifting. Furthermore, even if a merchant’s practices are irrelevant to the particular reason for the chargeback, their ability to dispute the chargeback is limited to the code provided.

Once issuing banks assign reason codes, it is uncommon for them to be modified retroactively, even when fresh evidence comes to light. While there are instances when it is possible to successfully challenge and reverse these decisions, attaining a reversal of a chargeback typically remains a secondary objective.