Reason code

C02 Credit Not Processed

[Consumer Disputes]

Details

The C02 reason code is used when a cardholder claims that a credit issued by the merchant for a returned product or service has not been processed or reflected on their account. It often happens when a merchant initiates a refund but the cardholder’s account does not show the corresponding credit, or there is a delay in the transaction being reflected, leading to confusion or frustration. 

The cardholder may dispute the charge because they believe the merchant failed to process or issue the refund properly, even though the merchant may have completed the refund action on their end. This code highlights discrepancies or misunderstandings between the merchant’s processing and the customer’s account reconciliation.

Timing to raise the dispute (Issuer/Cardholder)

120daysn/a

Timing to respond to the dispute (Acquirer/Merchant)

20daysn/a

How to respond?

To respond to C02 reason code, the merchant must provide clear documentation to prove that the credit or refund was processed and issued to the cardholder. This can include transaction records, refund receipts, or other relevant evidence that demonstrates the refund was properly initiated and completed. 

The merchant may also need to show:

  • the date the credit was issued
  • the amount of the refund, and 
  • any associated authorization details to confirm that the funds were transferred back to the cardholder's account.

It’s important that this evidence is submitted within the required 20-day response window to avoid losing the dispute.

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How to prevent?

In order to prevent C02 disputes, the merchant should ensure they have a clear and traceable refund process, and be prepared to communicate with the customer if there are any delays or issues in the processing of refunds. 

A merchant can avoid further disputes by keeping thorough records of refunds, and communicating proactively with the customer about when they can expect to see the credit on their account. 

If the merchant fails to respond within the designated timeframe or cannot provide the required evidence, they may lose the chargeback, and the amount of the disputed transaction will be refunded to the cardholder.

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