Reason Code C02 — Credit Not Processed

How to Handle Amex Reason Code C02 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 — C02 — 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 C02?

American Express chargeback reason code C02 is “credit not processed.” This reason code is used to explain that, as a merchant, you were expected to apply a credit to a cardholder’s account, but Amex has not received the credit in question.

This would typically be issued in cases of refund requests. For instance, a buyer completed a transaction, then later decided to request a refund. As the merchant of record, you’d be expected to credit the buyer’s account. However, you failed to credit the buyer as expected.

This could also be the result of failing to credit the buyer within the timeframe expected. So, even if you did process a credit, you can still receive a reason code C02 chargeback if you took too long to do so.

What Caused This Dispute?

As mentioned above, Amex chargeback reason code C02 is primarily issued if you failed to issue an expected credit. To demonstrate, this scenario can arise if:

• The buyer requested a refund, but no refund was processed.
• You processed a refund as requested, but did not do so in a timely manner.
• You received an inquiry notification, and responded, affirming that you intended to credit the buyer. But, the credit was never processed.

How to Respond to Amex Reason Code C02 Chargebacks

So, what happens if you can prove that you did, in fact, provide a credit in response to an inquiry?

Naturally, if you receive an Amex C02 chargeback, you’ll want to resolve the issue right away. If you feel that the chargeback was filed in error, you should file a dispute response. This is done through a process called representment.

Representment is the process through which you’ll challenge a chargeback. You provide evidence to the card issuer (in this case, American Express) that all aspects of the transaction were legitimate and in accordance with the card issuer's policies. This can involve several key pieces of evidence.

Also, remember that there’s a strict time limit to consider. You have just 20 days in which to submit your response to American Express. However, this time frame also includes the time it took for your acquirer to provide you with a dispute notification, as well as time spent by the acquirer reviewing and submitting your case. In practical terms, you’ll often have five days or less in which to prepare and submit your response.

Acceptable Evidence for Amex Reason Code C02 Responses

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

For American Express reason code C02 chargebacks, you’ll need to provide proof that you did, in fact, process the credit which the buyer requested. Or, if you already issued a credit to the buyer as a way of trying to avoid the dispute. In this case, you’ll need to offer proof that you already provided a credit to offset the amount charged.

Alternatively, you might insist that no credit was actually due to the buyer. If this is the case, you’ll need to provide proof that the buyer was not entitled to a credit. In this case, you need to look at the claim made by the cardholder, and then provide sufficient evidence explaining that the claim is not true, and that a credit is not justified. Documentation may include:

• Transcripts of conversations between yourself and the cardholder
• Shipping and/or tracking information
• Screen caps of product pages and descriptions

The success of representment depends on the thoroughness and relevance of the evidence provided. Maintaining detailed records of transactions and communications with customers is vital to effectively counteract all chargebacks, including those under reason code C02.

How to Prevent Amex Reason Code C02 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:

Take a Wider View

You can dispute invalid chargebacks from Amex reason code C02. However, it’s much more efficient to take a proactive stance. The same is true of the other chargeback reason codes, as well. A truly effective chargeback management strategy must encompass prevention as well as disputing cases of friendly fraud.

Chargebacks911® can help your business manage all aspects of chargeback reason codes, with proprietary technologies and experience-based expertise. Contact us today for a free ROI analysis to learn how much more you could save.