Reason Code P23 — Currency Discrepancy

How to Handle Amex Reason Code P23 Chargebacks

American Express breaks down the acceptable causes for a customer to dispute a credit card transaction in their dispute guidelines. This is done for the sake of simplicity and standardization. 

Each chargeback trigger has a designated “reason code.” Amex can then assign the appropriate code to each case to show the given reason for the chargeback.

Learn more about Amex reason codes

Today, we’re looking at one reason code in particular — P23 — and exploring the causes, timeframes, fees, and other specifics. We’ll also explore what you can do to prevent these chargebacks from happening.

What is American Express Reason Code P23?

American Express chargeback reason code P23 is “Currency Discrepancy.” This reason code is used to explain that, when you submitted the charge for processing, it was submitted in an invalid currency.

For example, let’s say you conduct a transaction with a customer. The transaction is denominated in Canadian dollars, and you process the payment as such. But, due to an error in how your point-of-sale machine was configured, the transaction shows up on the cardholder's statement as being denominated in US dollars.

As a result, the cardholder ended up paying a lot more for the purchase than they should have. The cardholder then calls the bank to request a chargeback in response.

What Caused This Dispute?

Amex Chargeback Reason Code P23 is primarily issued when there’s a currency mismatch between you and your customer. To demonstrate, this can happen if:

How to Respond to Amex Reason Code P23 Chargebacks

So, what happens if you can prove that there was no currency mismatch?

Naturally, if you get an Amex P23 chargeback, you’ll want to address the issue fast. If you believe the chargeback was improperly filed, you should submit a dispute response. This is done through a process called representment.

Representment is a standard method for responding to American Express chargebacks. You provide evidence to the card issuer (American Express, in this case), demonstrating that the transaction was valid and complied with all policies.

Amex may require you to produce crucial pieces of evidence to get a chargeback overturned. You need to be mindful of the strict time limit, though; You have just 20 days to submit your response to American Express. This deadline also covers the time your acquirer took to notify you of the dispute, plus the time they spent reviewing and forwarding your case. In practical terms, this often leaves you with five days or fewer to prepare and send your response.

Acceptable Evidence for Amex Reason Code P23 Responses

You can re-represent these charges under the condition that you have compelling evidence.

For American Express reason code P23 chargebacks, you’ll need to provide proof that a charge was submitted in the right currency. For example:

• A receipt showing that the amount charged matches the purchase price in their currency
• A bank statement or foreign exchange rate report verifying the right currency unit was used
• A copy of your policy stating that you don’t accept specific currencies (if applicable)

Another option is to show that you’ve already issued a credit to the buyer in an attempt to prevent the dispute. You'll need to present documentation proving that the credit was provided to offset the charged amount.

The effectiveness of representment hinges on the completeness and pertinence of the evidence you supply. Keeping detailed records of all transactions and communications with customers is crucial for your chargeback response.

How to Prevent Amex Reason Code P23 Chargebacks

As the old adage goes, “an ounce of prevention is worth a pound of cure.”

You may never be able to stop chargebacks entirely. But, you can limit your exposure to risk and keep your chargeback ratio in good standing by adopting a few best practices. Generally speaking, you’ll want to:

#1  |  Use the Correct Currency

Process all charges using the currency agreed to by the cardholder at the time of purchase. This is the simplest way to ensure that no problems arise.

#2  |  Communicate Clearly with Customers

Make sure that your customers are fully informed, and be proactive about communicating and addressing any concerns that may arise. For example, if you have to charge in a different currency due to cardholder location or your acquirer’s processing capabilities, be transparent about it.

#3  |  Keep Accurate Records

Maintaining detailed records of all transactions is crucial for providing evidence during a chargeback dispute. Make sure to keep copies of receipts, invoices, shipping documents, and communication with customers.

#4  |  Ensure Your POS & Other Technology is Set Up Properly

Make sure your point-of-sale (POS) system or payment processing technology is set up correctly to prevent technical errors. Conduct regular audits, and double-check that all transactions get processed accurately.

#5  |  Stay Compliant with Card Network Rules & Regulations

Follow card network rules and regulations to avoid potential disputes. Stay up to date on changes and updates to network rules.

Take a Wider View

You always have the option to challenge illegitimate chargebacks related to Amex reason code P23. That said, adopting a proactive approach generally yields better results, and this principle applies to all chargeback reason codes.

An effective strategy should include both preventive measures, plus a plan to fight back against first-party misuse of the dispute process. Chargebacks911® offers comprehensive support for managing all chargeback reason codes through advanced technologies and seasoned expertise. Reach out to us today for a complimentary ROI analysis and discover how much more you could save.