Mastercard chargeback reason codes describe the motivation for a cardholder’s dispute with a merchant and are identifiable by their four-digit numbers. In 2016, Mastercard revealed an entirely new reason code system. While before, they offered an extensive list of different reason codes, now, the card issuer is providing fewer than ten reason codes that are meant to be relevant to merchants. The new system has absorbed the old codes and can be divided into two categories:
The Active Chargeback Reason Codes:
- 4808 — Authorization-Related Chargeback
- 4834 — Point-of-Interaction Error
- 4853 — Cardholder Dispute
Fraud Related Reason Codes:
- 4837 — No Cardholder Authorization
- 4840 — Fraudulent Processing of Transactions
- 4849 — Questionable Merchant Activity
- 4863 — Cardholder Does Not Recognize – Potential Fraud
- 4870 — Chip Liability Shift
- 4871 — Chip/Pin Liability Shift
While it's true that all of the old codes will eventually be phased out, Mastercard has agreed to continue to use its previous reason codes for a limited amount of time. It’s also important to note that there are additional region-specific chargeback reason codes which may affect certain merchants differently.
Merchants should be cautious when it comes to referencing Mastercard’s new chargeback codes. Before assuming that fewer codes will make things easier, it’s important to look at what these new codes mean:
- Each new reason code, while more generalized, has added conditions and requires more compelling evidence, with different chargeback time limits and representment options.
- Trying to figure out which condition applies to a specific chargeback means more time and money spent at the merchant’s expense. Because there’s the added confusion of code overlap as Mastercard phases out its old codes and introduces its new ones, it becomes even more difficult for merchants to come up with a strategy to prevent chargebacks from hurting their business.
- Lastly, because all of these card issuer chargeback codes predate the internet, merchants stand even less chance combating scam artists who use friendly fraud on their own. It’s advisable to bring in a professional service to help prevent fraud.