Credit Not Processed Chargeback

When Consumers File Credit Not Processed Chargebacks

Chargebacks are essentially forced credit card refunds, and consumers can use them for reimbursement if complications arise with the traditional refund process.

Credit not processed chargebacks can be used if the merchant’s refund process doesn’t adequately address the consumer’s needs.

Each card network has specific criteria for this type of chargeback; understanding the networks’ regulations for credit not processed chargebacks can help merchants implement better management strategies.

MasterCard Reason Code 4860


MasterCard uses reason code 4860 to identify chargebacks that relate to credit not processed chargeback disputes.

What can cause a 4860 chargeback?

  • The merchant’s refund policy was not disclosed at the time of purchase, and the merchant refuses to accept a return or cancellation.
  • The merchant fails to respond to return or cancellation requests.
  • The merchant reduces the credit amount without notifying the cardholder.
  • The merchant inadvertently processes the credit as a debit.

Additional conditions and regulations apply to timeshare rentals and other T&E industry purchases.

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Time Limits

Unlike other chargebacks, the 120-day chargeback filing deadline begins the day of the return or the day services were canceled.

To give the merchant an opportunity to refund the customer, chargeback submission must be delayed 15 calendar days from:

  • The date the return was made.
  • The date of the cancelation of services.
  • The date the cardholder received written documentation from the merchant stating a credit was due.

Merchant Policies

Merchants must disclose special return limitations at the time of sale, and cardholders must be notified of applicable refund policies before the transaction is completed.

These limitations may include:

  • Restocking fees
  • In-store credit only
  • A no return or cancellation policy

A credit not processed chargeback reason code may not be used if the cardholder is attempting to return goods or cancel services in a manner not compliant with the merchant’s refund policy.

However, merchants who fail to disclose policies regarding returns are subject to credit not processed chargebacks.


Merchants may file a representment, along with supporting documentation, to refute the chargeback.

For cardholders that received a refund in addition to filing a chargeback, the merchant must provide the date the credit was processed.

For cardholders improperly attempting to receive credit despite a properly disclosed cancellation and refund policy, or who claim to have shipped merchandise back to the merchant that was never received, the merchant must provide a rebuttal letter including the disclosure of the business’s policies.

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Visa Reason Code 85


Similar to MasterCard’s reason code 4860, Visa has a chargeback code to address situations where a credit is not issued.

What causes a reason code 85 chargeback?

  • The merchant failed to process a credit.
  • The merchant did not disclose the return policy (or return limitations) before the transaction was finalized.
  • The cardholder returned merchandise or canceled services and a credit was not issued.

Additional conditions and regulations apply to timeshare rentals and other T&E industry purchases.

Time Limits

Chargebacks must be filed within 120 calendar days of either the transaction date or the date the merchandise or services were received.

Issuers must wait 15 days after the merchandise is returned before processing a chargeback.

Merchant Policies

Rights and limitations that apply to the merchant are as follows:

  • Chargebacks may not exceed the original transaction amount, and are limited to the value of the returned merchandise or the unused portion of services.
  • The cardholder must return merchandise that is received after a transaction is canceled.
  • If the merchant refuses to accept returned merchandise that is in accordance with the published refund policy, a chargeback is applicable.
  • Chargebacks do not apply to merchandise being held by customs agents of a country other than the merchant’s.


Merchants can dispute a credit not processed chargeback by re-presenting the transaction with applicable compelling evidence.

For cardholders that have previously been issued a credit, the acquirer can process representment on the merchant’s behalf. The bank will send evidence of the refund to the issuer.

For cardholders attempting to return merchandise or cancel services in spite of a properly documented return policy, merchants must provide evidence of the policy’s disclosure and the cardholder’s acceptance before completing the transaction.

Managing Credit Not Processed Chargebacks

Credit not processed chargebacks can result from one of two things:

Either the merchant handled the return process poorly or the consumer is trying to secure an unearned refund.

By carefully analyzing a business’s policies and procedures, merchants can identify potential chargeback triggers. After making necessary adjustments, merchants can drastically reduce their liability for credit not processed chargebacks.

The risk of friendly fraud chargebacks can also be minimized. And any illegitimate attempt to secure a refund can be disputed through representment.

Chargebacks911’s™ extensive line of products and services are specifically designed to address all aspects of chargeback management. We can help reduce your risk of merchant error chargebacks and successfully manage friendly fraud.

If you’d like help overcoming credit not processed chargeback issues, let us know. Contact us today and we’ll conduct a free ROI analysis, showing you how much more you can earn through the use of our innovative products and services.

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