Reason Code C04 — Goods/Services Returned or Refused

How to Handle Amex Reason Code C04 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 — C04 — 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 C04?

American Express chargeback reason code C04 is “Goods/Services Returned or Refused.” This reason code is used to explain that the Amex cardholder made a purchase, but the goods were ultimately refused or returned. However, the merchant failed to provide a credit.

Like other American Express reason codes, C04 is meant to explain to you, as a merchant, why a chargeback happened. In this case, it suggests that you were expected to provide a credit (i.e. a refund) to a buyer for returned or refused merchandise. But you neglected to do so.

What Caused This Dispute?

Amex Chargeback Reason Code C04 is primarily issued when a cardholder contacts Amex to dispute a charge after not receiving an expected credit. To demonstrate, this scenario can arise if:

• The cardholder returned or refused an item, expecting a refund. However, the refund was never credited to their account.
• The cardholder expected a credit to offset a pending charge. However, the account was billed before the credit posted to their statement.
• The cardholder could not understand your return policy, and believed they were entitled to a refund in response to returning or refusing goods.
  

How to Respond to Amex Reason Code C04 Chargebacks

So, what happens if you can prove that the buyer was not entitled to a refund, or that a refund or credit was already provided?

Naturally, if you receive an Amex C04 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 C04 Responses

You can re-represent American Express reason code C04 chargebacks under the condition that you have compelling evidence.

If you believe that the buyer did not return the goods in question, and was thus not entitled to a chargeback, you’ll need to provide documentation proving that the goods in question were not returned to you. This can include evidence of use by the buyer, like activation data or even social proof like photos or videos. You can also use copies of email or other messages, showing that no return was ever attempted.

Alternately, if the goods were returned, you can provide a copy of your return policy. You’ll also need to explain your procedures for disclosing these policies to the cardholder, and illustrate how the cardholder failed to abide by the policy. Another option here is to provide a copy of the charge record (i.e. the receipt or invoice), outlining the terms and conditions of the purchase.

If the buyer claims that goods or services were refused at the point of delivery, you’ll need proof that the goods or services were accepted. For example, a signed delivery slip, or evidence of use by the buyer, like activation data or photos or videos.

Finally, if you believe that a chargeback is invalid because you already provided a credit to offset the charge in question, you’ll need proof that the credit had already been processed before the chargeback was filed.

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 C04.

How to Prevent Amex Reason Code C04 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:

• Process Credits Right Away
  Don’t delay in processing and submitting credits for returns. You should provide a credit immediately after receiving returned goods or receiving notification of refused goods.
• Ensure Your Policies are Fair & Clear
  Don’t give buyers a way to plausibly say that your policies are confusing or misleading. Use plain language, and make sure that your policies are fair and reasonable.
• Ensure Informed Consent
  Advise the cardholder about your return policies before they complete a purchase. Make sure they fully understand the rules before allowing them to checkout.
• Make Your Policies Easy to Find
  Post your return policies in a visible location. On your site, ensure they’re accessible from every page, and that there’s a prominent link to them on every product page and on your checkout page.
• Print Policies on Receipts & Invoices
  This will help provide one more visual opportunity for buyers to notice and understand your return policies. This can deter buyers who might otherwise assume they’re entitled to a refund.

Take a Wider View

You can dispute invalid chargebacks from Amex reason code C04. 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.