Chargeback Code

Simple definition
A code that tells why someone started a chargeback.
Expanded definition
A designated code provided by card networks that categorizes and details the reason for a chargeback initiation.


The eCommerce landscape has undeniably changed the way business is done. However, with its evolution, challenges such as chargebacks have also arisen. Grasping the importance of chargeback codes and their meanings is critical for any merchant wanting to thrive in today's digital market.

What Are Chargeback Codes?

Chargeback codes are specific codes issued by credit card companies that denote the reason for a chargeback. They serve as a quick reference for merchants, letting them know why the chargeback occurred and what kind of evidence might be needed to contest it.

Common Reasons for Chargebacks

While the specifics can vary between credit card companies, some typical reasons for chargebacks include:

  • Unauthorized transactions: These occur when a cardholder claims they didn’t authorize a purchase.
  • Not as described or defective merchandise: This happens when a product or service doesn't match its description or is found to be defective.
  • Non-receipt of merchandise or service: When a customer claims not to have received the purchased item or service.
  • Duplicate processing: This occurs when a transaction is mistakenly charged more than once.

Breaking Down Major Chargeback Code Categories

Different credit card companies have their unique sets of chargeback codes:

  • Visa Chargeback Codes
  • Understanding Visa's reason codes: Visa’s codes are straightforward. For instance, 13.1 indicates a "Late Presentment", meaning the merchant took too long to process the transaction.
  • Examples and explanations: Code 83 stands for "Fraud – Card Absent Environment", typically seen in online transactions where the customer claims they never authorized the purchase.
  • Mastercard Chargeback Codes
  • Key differences from Visa's codes: While there's some overlap with Visa, Mastercard has its nuances. For example, Mastercard uses the code 4863 for “Cardholder Does Not Recognize—Potential Fraud”.
  • Examples and clarifications: Code 4837 pertains to "No Cardholder Authorization", suggesting the merchant processed a transaction without the explicit consent of the cardholder.
  • American Express Chargeback Codes
  • Unique elements of AmEx's chargeback system: Unlike Visa and Mastercard, American Express operates as both the card issuer and network. This means they have a more direct relationship with cardholders.
  • Commonly seen codes: One often-encountered code is A02, which stands for "No Valid Authorization".

The Impact of Chargebacks on Merchants

Beyond the obvious financial loss of refunded transactions, there are other implications:

  • Financial implications: Each chargeback comes with an associated fee, which can range anywhere from $20 to $100.
  • Reputational risks: Excessive chargebacks can lead to a merchant being labeled as high-risk, leading to higher processing fees or even account termination.
  • Operational Costs: Addressing and disputing chargebacks requires time, resources, and sometimes additional costs in gathering necessary documentation.

How to Prevent Chargebacks

To minimize chargebacks, consider the following strategies:

  • Clear product and service descriptions: Ensure that your product listings are accurate, with clear photos and detailed descriptions.
  • Effective communication with customers: Promptly address inquiries and concerns. Make sure customers know how to reach you.
  • Implementing strong authentication measures: Use tools like CVV verification and two-factor authentication.
  • Regularly updating billing and shipping information: This minimizes the chances of sending products to outdated addresses or billing expired cards.

Effectively Responding to Chargebacks

If you're faced with a chargeback, here’s how to respond:

  • Timely responses: Address the chargeback as soon as you're made aware. Delaying can result in losing the dispute by default.
  • Gathering necessary documentation: Compile all related transaction documents, including receipts, correspondence, and any evidence that can refute the claim.
  • Crafting a compelling rebuttal letter: Clearly explain your case, ensuring you address the specific reason code given for the chargeback.


Chargebacks, while an inherent part of eCommerce, can be mitigated with informed strategies and a thorough understanding of chargeback codes. By remaining proactive and informed, merchants can better navigate the complexities of the digital market, ensuring sustained growth and minimizing losses.