Reason Code F31 — EMV Lost/Stolen/Non-Received

How to Handle Amex Reason Code F31 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 — F31 — 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 F31?

American Express chargeback reason code F31 is “EMV Lost/Stolen/Non-Received.”

This reason code is used to explain that the cardholder claims to have not authorized the charge. In addition, the cardholder claims that the chip card with PIN capabilities was either lost, stolen, or otherwise not in their possession at the time the purchase happened.

The card was used at a point-of-sale terminal, but the transaction was not processed as a chip card transaction with PIN validation. This might’ve happened because the POS system was not equipped with chip-and-PIN technology, or the transaction was keyed-in manually.

What Caused This Dispute?

Amex Chargeback Reason Code F31 is primarily issued when an EMV-enabled card is used without the cardholder’s permission. To demonstrate, this scenario can arise if:

How to Respond to Amex Reason Code F31 Chargebacks

So, what happens if you can prove that the transaction in question was not a case of EMV fraud?

Addressing the issue promptly is essential upon receiving an Amex F31 chargeback. Should you believe the chargeback was mistakenly issued, you need to initiate a dispute response. This is achieved via a process called representment.

Representment lets you contest the chargeback by presenting evidence to the card issuer (in this case, American Express) that confirms the transaction was valid and adhered to the issuer’s guidelines. This can require submitting various crucial pieces of evidence.

It’s also important to be mindful of the strict timeframe involved. Remember, you have only 20 days to put forward your response to American Express. However, this deadline includes the period taken by your acquirer to inform you of the dispute and their time to review and submit your case. In reality, this often leaves you with five days or less to compile and submit your response.

Acceptable Evidence for Amex Reason Code F31 Responses

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

For American Express reason code F31 chargebacks, you’ll need to provide evidence that the transaction was conducted as a card-not-present transaction, or documentation that the POS system successfully processed a chip card transaction with PIN verification. Examples of documentation include:

• Cardholder authentication data (AVS, CVV, geolocation, IP address, etc.)
• Records of previous transactions with the cardholder that were not disputed
• Shipping and tracking information
• Transaction receipt, showing the purchase was made at a card-present POS

Alternatively, you might have 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.

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 F31.

How to Prevent Amex Reason Code F31 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  |  Dip the Chip

Utilize an EMV or chip-enabled POS system whenever feasible. Avoid swiping or manually keying-in cardholder information during a card-present sale unless absolutely necessary.

#2  |  Know Your Buyer

Verify customer identification by checking ID for all in-person transactions. This is especially important for high-dollar-value transactions.

#3  |  Never Skip Out On Authorization

Get a legitimate authorization code, as well as a card imprint, for any manually entered transactions, or key in the card verification number.

#4  |  Get Consent

With a card-not-present sale, be sure to get explicit approval from the cardholder for billing for goods or services. Clarify the terms up front so there’s no misunderstandings.

#5  |  Keep Good Records

Keep records that link the cardholder’s consent to the billing details and terms for the goods or services purchased.

Take a Wider View

You can dispute invalid chargebacks from Amex reason code F31. 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.