Reason code

This code applies when a cardholder disputes a transaction, claiming it was unauthorized and involved a counterfeit card. Under the EMV liability shift, if a merchant processes a chip card transaction without adhering to EMV standards, such as by using a magnetic stripe instead of a chip reader, the liability for counterfeit fraud may shift from the issuer to the merchant.

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To address a chargeback under Reason Code 4870, provide evidence that the transaction was processed in compliance with EMV standards:​

• Proof of EMV Compliance: Documentation showing that the transaction was conducted using a chip-enabled terminal with proper chip verification.​
  
  
• Transaction Logs: Detailed logs from the point-of-sale system indicating the use of the chip during the transaction.​
  
  
• Authorization Approval: Records demonstrating that authorization was obtained from the issuer at the time of the transaction.​
  
  

Providing clear and comprehensive documentation can help demonstrate that the transaction was legitimate and processed according to EMV guidelines, potentially leading to the chargeback being overturned.

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To minimize the risk of such chargebacks under 4870.

• Upgrade to EMV-Compliant Terminals: Ensure all point-of-sale terminals are capable of processing chip transactions.​
  
  
• Train Staff on EMV Procedures: Educate employees on the importance of using chip verification and the proper handling of chip cards.​
  
  
• Enforce Chip Usage: Require the use of chip functionality for all chip-enabled cards to enhance security and reduce fraud risk.​
  
  
• Regularly Update Systems: Keep point-of-sale systems and software up to date to maintain compliance with the latest EMV standards.​