Reason code

This code is used when a cardholder disputes a recurring transaction, claiming that they had previously canceled the subscription or recurring payment agreement with the merchant, but were still charged. Such disputes can arise from misunderstandings about cancellation policies, ineffective cancellation processes, or processing errors. ​

To address a chargeback under reason code 4541:

• Provide Evidence of Authorization: Submit documentation showing that the cardholder agreed to the recurring transaction, including the terms and conditions they accepted.​
  
  
• Proof of Cancellation Policy Disclosure: Demonstrate that the cardholder was informed of the cancellation policy at the time of enrollment and did not adhere to the specified procedures.​

• Usage Evidence: If applicable, provide proof that the cardholder continued to use the services or received the goods after the alleged cancellation date.

• ​Communication Records: Include any correspondence with the cardholder regarding the subscription, especially communications related to cancellation requests or confirmations.​

To minimize the occurrence of chargebacks under reason code 4541:

• Clear Communication of Terms: Ensure that the terms of the recurring transaction, including the cancellation policy, are communicated and acknowledged by the cardholder at the time of enrollment.​
  
  
• Accessible Cancellation Procedures: Provide straightforward and accessible methods for customers to cancel recurring transactions, and promptly confirm receipt of cancellation requests.​
  
  
• Advance Billing Notifications: Send reminders to cardholders before processing recurring charges, especially for subscriptions with infrequent billing cycles, to reduce the likelihood of forgotten agreements.​

• ‍Maintain Detailed Records: Keep thorough records of all customer interactions, agreements, and usage logs to provide evidence in case of disputes.