American Express has a different method for handling chargebacks than the other networks. For every chargeback reason code, there’s a list of appropriate documentation that can be used to request a chargeback reversal. Without these supporting documents, the cardholder’s dispute will always be considered valid and correct. Merchants also need to remember that, because American Express isn’t just a card issuer, but also a card network, the company will always favor the cardholder in any dispute. Additionally, American Express doesn’t give the cardholder a firm deadline in regards to when they must file a chargeback – unlike Visa and Mastercard.
American Express chargeback reason codes are divided into four main categories and always include a class letter, plus a two-digit number (e.g. C03):
- Authorization Issue (A) – Issues in this category: when the charged amount is larger than the authorization amount on a card, when there is no valid authorization or when the authorization approval has expired.
- Processing Error (P) – Issues in this category: when a card number hasn’t been assigned, issues with a credit being processed as a charge (or a charge being processed as a credit), when the wrong amount is charged or when there is an inconsistency in the currencies used.
- Cardmember Dispute (C) – Issues in this category: cards not being processed, merchandise or services being returned, refused, not as described, damaged, canceled or partially received.
- Fraud (F) – Issues in this category: missing imprints, missing signatures, expired or invalid cards, when cards aren’t present during a purchase or when there is no cardholder authorization.
Merchants need to pay attention to American Express, the card issuer. Cardholders will turn directly to this issuer for support when disputing an order and, unfortunately for the merchant, American Express will always back the cardholder.