Mastercard Chargeback Reason Codes

Mastercard chargeback reason codes are essential for understanding disputes and resolving them efficiently. Each code provides insights into why a chargeback occurred, whether due to fraud, authorization issues, or customer dissatisfaction. With a streamlined system introduced in 2016, Mastercard grouped codes under broader categories for clarity, though legacy codes still appear occasionally.

At CB-Alert, we specialize in helping businesses prevent and resolve chargebacks. Our expert team and tools ensure you navigate chargebacks effectively, reducing losses and improving your processes. We are also resellers of the Ethoca alerts by Mastercard, which can ensure you get the lowest pricing available on chargeback prevention alerts. 

The following list is broken down by different categories to simplify it for you.

Mastercard Fraud-Related Chargebacks

4837 – No Cardholder Authorization

Overview

This reason code occurs when the cardholder claims they did not authorize the transaction. This is often linked to stolen or lost cards, fraudulent account use, or unauthorized family member usage.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The transaction was made by someone who fraudulently obtained the card details.
• The cardholder did not recognize the transaction, potentially due to unclear billing descriptors.
• A family member used the cardholder’s account without permission.

Prevention Tips

• Use fraud prevention tools such as Ethoca alerts, Address Verification Service (AVS), and CVC2.
• Always obtain proper authorization for transactions.
• Create clear and recognizable billing descriptors.
• Train staff to handle declined transactions and avoid manual overrides.

4840 – Fraudulent Processing of Transactions

Overview

This reason code is applied when the cardholder alleges the merchant fraudulently processed one or more transactions. This could involve unauthorized duplicate charges or suspicious processing practices.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Duplicate charges for a single transaction.
• Transactions processed after the cardholder switched to a different payment method.
• Unauthorized adjustments to the transaction amount.

Prevention Tips

• Verify all transactions for accuracy before batching.
• Void original transactions if a customer switches to another payment method.
• Refund duplicate transactions promptly if identified.

4849 – Questionable Merchant Activity

Overview

This code covers transactions flagged due to suspicious merchant activity. Violations can include participation in Mastercard’s Global Merchant Audit Program (GMAP) or Questionable Merchant Audit Program (QMAP).

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Merchant involvement in fraudulent or unethical practices flagged under GMAP or QMAP.
• Violation of Mastercard Rule 3.7, such as coercion claims or manipulation.

Prevention Tips

• Strictly comply with Mastercard’s policies and guidelines.
• Maintain accurate records of transactions and customer interactions.
• Regularly audit business practices to ensure compliance.

4863 – Cardholder Does Not Recognize – Potential Fraud

Overview

This reason code is used when a cardholder does not recognize a transaction on their statement, suggesting potential fraud.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Unclear or unfamiliar billing descriptors.
• Card-not-present transactions that were not adequately validated.

Prevention Tips

• Use clear, recognizable billing descriptors.
• Leverage fraud prevention tools like AVS, CVC2, and Ethoca alerts.
• Provide detailed receipts and order confirmations to customers.

4870 – EMV Chip Liability Shift

Overview

This reason code applies when a fraudulent transaction occurs because the merchant did not process the payment using EMV-compliant terminals.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Transactions completed on non-EMV-compliant terminals.
• Card-present fraud where the chip functionality was not utilized.

Prevention Tips

• Upgrade to EMV-compliant terminals.
• Train staff on proper EMV processing procedures.

4871 – Chip Liability Shift – Lost/Stolen/Never Received Fraud

Overview

This chargeback is issued when fraudulent transactions occur using a lost, stolen, or non-received EMV chip card, and the merchant did not verify the transaction with EMV technology.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Failure to use EMV verification methods like PIN entry.
• Lost or stolen EMV chip cards used for unauthorized transactions.

Prevention Tips

• Require PIN entry for chip-enabled transactions.
• Use EMV-compliant terminals and avoid fallback procedures whenever possible.
• Monitor transactions for potential red flags and train staff on fraud prevention measures.

Mastercard Authorization-Related Chargebacks

4807 – Warning Bulletin

Overview

This reason code is issued when a transaction is completed using a card listed in Mastercard’s Warning Bulletin as lost, stolen, or otherwise compromised.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The merchant processed a transaction without checking the card against the Warning Bulletin.
• The card used had been flagged as compromised by Mastercard.

Prevention Tips

• Review Mastercard’s Warning Bulletin regularly before accepting transactions.
• Use fraud detection systems to verify card status.
• Ensure your payment terminals are programmed to cross-reference flagged accounts.

4808 – Authorization Chargeback: Cardholder-Activated Terminal (CAT) 3 Device

Overview

This chargeback occurs when a merchant improperly processes a transaction at a self-service terminal (CAT 3 device), such as gas station pumps or vending machines.

Time Limits

• Issuer/Cardholder: 90 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The self-service terminal did not request proper authorization.
• Cardholder disputes a transaction due to system errors at the point of interaction.

Prevention Tips

• Ensure CAT 3 devices comply with Mastercard’s authorization protocols.
• Regularly inspect self-service terminals to ensure they are functioning correctly.

4808 – Authorization Chargeback: Expired Chargeback Protection Period

Overview

This occurs when the merchant submits a transaction outside of the authorized chargeback protection period, leading to disputes.

Time Limits

• Issuer/Cardholder: 90 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The transaction was authorized but processed after the protection period expired.

Prevention Tips

• Submit authorized transactions promptly to avoid exceeding Mastercard’s processing limits.
• Use automated systems to track and submit transactions within the allowable timeframe.

4808 – Authorization Chargeback: Multiple Authorization Requests

Overview

This reason code is issued when a merchant submits multiple authorization requests for the same transaction, leading to disputes.

Time Limits

• Issuer/Cardholder: 90 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Repeated attempts to obtain authorization due to terminal errors or declined transactions.
• The merchant failed to void earlier authorization attempts before reprocessing.

Prevention Tips

• Avoid resubmitting authorization requests for declined transactions.
• Cancel or void initial attempts if reauthorization is required.
• Train staff to follow proper authorization protocols.

4808 – Authorization Chargeback: Required Authorization Not Obtained

Overview

This occurs when a transaction is processed without obtaining proper authorization as mandated by Mastercard rules.

Time Limits

• Issuer/Cardholder: 90 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The merchant bypassed the authorization process.
• Authorization was attempted after the transaction date, violating Mastercard regulations.

Prevention Tips

• Always request and obtain authorization before completing a transaction.
• Use terminals programmed to automatically request authorization for all payment amounts.

4812 – Account Number Not on File

Overview

This reason code applies when a transaction involves an account number that is invalid, inactive, or not recognized by the issuer.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The account number used was not associated with an active cardholder account.
• Manual entry errors during transaction processing.

Prevention Tips

• Validate account numbers during authorization.
• Ensure terminals and payment systems are updated to prevent data input errors.
• Avoid manually overriding system alerts about invalid accounts.

Point-of-Interaction (POI) Error Chargebacks

4834 – Point-of-Interaction Error

Overview

This reason code is issued when an error occurs during transaction processing at the point of interaction. Examples include duplicate submissions, errors in receipt handling, or processing a transaction multiple times.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Submitting the same batch of transactions multiple times.
• Depositing both the merchant and sales copies of a sales receipt.
• Creating two sales receipts for a single transaction.
• Depositing a receipt with multiple acquirers.

Prevention Tips

• Review transaction receipts before submission.
• Submit each batch only once.
• Issue credits immediately for duplicate transactions.
• Ensure receipts are only deposited with a single acquirer.
• Train staff on proper credit-handling procedures.

4831 – Transaction Amount Differs

Overview

This code applies when the amount processed differs from the amount approved by the cardholder. This issue often arises due to calculation errors or unauthorized changes to the transaction amount.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Incorrect calculations during transaction processing.
• Adjustments made to the transaction amount without the cardholder’s consent.

Prevention Tips

• Verify the final transaction amount with the cardholder before processing.
• Do not modify amounts without explicit approval.
• Void and reprocess transactions if the customer wishes to change payment methods.

4842 – Late Presentment

Overview

This reason code is triggered when a merchant delays submitting a transaction beyond Mastercard’s allowable timeframes, often leading to disputes if the account is closed or inactive by the time of submission.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Submitting a transaction more than seven calendar days after the transaction date.
• Posting a transaction after 180 days from the original transaction date.

Prevention Tips

• Always send an authorization request before processing a transaction.
• Submit transactions to the issuer within the specified timeframes.
• Finalize and send transactions to the card processor on the same day as the sale, whenever possible.

4846 – Correct Transaction Currency Code Not Provided

Overview

This code applies when a merchant improperly handles currency conversion, such as failing to give the cardholder the option to select a preferred currency or incorrectly applying dynamic currency conversion.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Automatically applying dynamic currency conversion without the cardholder’s consent.
• Failing to inform the cardholder of conversion fees or options.
• Processing a transaction in a currency other than the one agreed upon.

Prevention Tips

• Always offer the cardholder the choice of currency.
• Inform customers of any fees and conversion rates before processing.
• Train staff on proper currency conversion procedures.

4850 – Installment Billing Dispute

Overview

This chargeback is issued when a cardholder disputes an installment charge, often due to errors in billing or misunderstanding of the installment agreement.

Time Limits

• Issuer/Cardholder: 45 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Incorrect installment charges to the cardholder’s account.
• Miscommunication about billing terms.

Prevention Tips

• Clearly outline installment billing terms and obtain agreement from the cardholder.
• Verify installment amounts before processing.
• Provide regular statements detailing billing schedules.

4999 – Domestic Chargeback Dispute (Europe Region Only)

Overview

This reason code applies to disputes in the European region when a cardholder claims a transaction processed as a sale should have been issued as a credit.

Time Limits

• Issuer/Cardholder: 45 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• Processing an intended credit as a sale transaction.
• Errors in issuing refunds or credits.

Prevention Tips

• Confirm the intended transaction type (sale or credit) with the cardholder before processing.
• Regularly audit transactions to identify and correct errors.
• Issue credits promptly when a refund is due.

Cardholder Dispute Chargebacks

4853 – Cardholder Dispute

Overview

This code is issued when a cardholder disputes the quality, description, or delivery of goods or services. It can also include situations like receiving counterfeit goods, damaged items, or unprocessed refunds.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The merchant sent an incorrect or defective product.
• Goods or services were not as described.
• A refund request was ignored or delayed.

Prevention Tips

• Clearly describe products and services to avoid misunderstandings.
• Address customer complaints promptly and issue refunds when appropriate.
• Maintain detailed records of transactions, deliveries, and communications.

4841 – Canceled Recurring or Digital Goods Transactions

Overview

This chargeback occurs when a cardholder disputes recurring charges after canceling a subscription or claims they were charged without proper authorization.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The merchant continued billing after the subscription was canceled.
• The cardholder was unaware of the recurring billing terms.

Prevention Tips

• Clearly communicate subscription terms, including billing frequency.
• Provide easy cancellation options and confirm cancellations promptly.
• Notify customers of recurring charges in advance to reduce confusion.

4854 – Cardholder Dispute – Not Elsewhere Classified (U.S. Region Only)

Overview

This reason code is a catch-all for disputes that do not fall under other specific categories, often involving unresolved complaints or issues not clearly addressed by the merchant.

Time Limits

• Issuer/Cardholder: 120 calendar days or 60 calendar days from the date the cardholder first reports the issue.
• Acquirer/Merchant: 45 calendar days

Common Causes

• A cardholder’s attempts to resolve the issue with the merchant were unsuccessful.
• The nature of the dispute does not align with predefined categories.

Prevention Tips

• Proactively resolve customer complaints before they escalate.
• Maintain detailed documentation of customer interactions and resolutions.
• Offer clear support channels for customers to raise concerns.

4855 – Goods or Services Not Provided

Overview

This chargeback is filed when a cardholder claims they did not receive the goods or services they paid for.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The merchant failed to deliver the purchased items or services.
• Significant delays caused the customer to dispute the charge.

Prevention Tips

• Provide clear delivery timelines and tracking information for shipped goods.
• Maintain open communication with customers about delays or issues.
• Keep proof of delivery or service completion to support disputes.

4859 – Addendum, No-show, or ATM Dispute

Overview

This code is assigned when a cardholder disputes additional charges, missed reservations, or ATM-related issues suchas not receiving the correct cash amount.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• The cardholder did not agree to additional charges added to the transaction.
• A hotel charged for a no-show despite a cancellation request.
• The cardholder did not receive the full amount requested during an ATM withdrawal.

Prevention Tips

• Clearly communicate terms for additional charges and no-show policies.
• Confirm cancellations and provide documentation for hotel bookings.
• Regularly reconcile and audit ATM transactions to identify and correct discrepancies.

4860 – Credit Not Processed

Overview

This code is used when a cardholder disputes a refund or credit that was not processed as promised.

Time Limits

• Issuer/Cardholder: 120 calendar days
• Acquirer/Merchant: 45 calendar days

Common Causes

• A refund request was approved but not processed by the merchant.
• Processing delays caused the cardholder to escalate the dispute.

Prevention Tips

• Process refunds promptly and notify customers when the credit has been issued.
• Maintain detailed records of refund transactions.
• Ensure refund requests are handled within your stated timelines.

How CB-Alert Can Help

Mastercard chargeback reason codes can be complex, but understanding them is critical to resolving disputes and preventing future chargebacks. At CB-Alert, we combine advanced technology and human expertise to help merchants identify the source of chargebacks, build compelling cases, and implement proactive strategies to reduce disputes.

Don’t let chargebacks hurt your business. Contact CB-Alert today to take control of your chargeback management and protect your revenue.