MasterCard Chargeback Reason Codes Explained


Revised MasterCard Reason Codes Took Effect May 2016

Each chargeback is accompanied by a reason code, assigned by the issuer, which explains the supposed motivation for the dispute. Card networks have their own unique list of reason codes, using different codes to identify different issues.

In the newly updated Chargeback Guide, MasterCard unveiled a revised list of chargeback reason codes.

MasterCard Chargeback Reason Codes

In the May 10, 2016 update to MasterCard’s Chargeback Guide (available for download here), the company revealed an entirely new reason code system.

A proactive chargeback strategy helps end surprises. Ask us how.


Prior to the May 2016 update, MasterCard offered a long list of specified reason codes. This recent update, though, pared down the number of reason codes substantially. Now, there are fewer than ten different reason codes relevant to most merchants.

The chart below lists the current reason codes, as well as the former reason codes absorbed by the new system.

Active Reason Code Former Reason Codes Merged into New Reason Code
4808 — Authorization-Related Chargeback
  • 4807—Warning Bulletin File
  • 4808—Authorization-Related Chargeback
  • 4812—Account Number Not on File
4834 — Point-of-Interaction Error
  • 4831—Transaction Amount Differs
  • 4834—Point-of-Interaction Error
  • 4842Late Presentment
  • 4846—Correct Transaction Currency Code Not Provided
4853 — Cardholder Dispute
  • 4841—Cancelled Recurring or Digital Goods Transactions
  • 4853—Cardholder Dispute
  • 4855—Goods or Services Not Provided
  • 4859—Addendum, No-Show, or ATM Dispute
  • 4860Credit Not Processed

While some codes have been removed from use, others have not been altered. MasterCard chargeback reason codes remained the same in the ‘fraud-related chargebacks’ category.

Active Fraud-Related Chargeback Reason Codes
4837—No Cardholder Authorization
4840—Fraudulent Processing of Transactions
4849—Questionable Merchant Activity
4863—Cardholder Does Not Recognize—Potential Fraud
4870—Chip Liability Shift
4871—Chip/PIN Liability Shift

According to MasterCard, an issuer may continue to use outdated reason codes; however, old codes will eventually be eliminated as valid MasterCard reason codes.

It’s also important to note that there are additional region-specific chargeback reason codes and exceptions that may affect a merchant.

The State of Chargebacks 2018

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Chargebacks911 is happy to provide merchants with a generalized chargeback education. We strive to discover and share all the latest industry news and regulations.

However, it is advisable for merchants to consult the networks’ regulations directly. Unless merchants hire Chargebacks911® to manage their business’ chargebacks, merchants will need to carefully monitor regulation updates themselves.

Complications Related to New MasterCard Chargeback Reason Codes

On the surface it seems like fewer reason codes makes things simpler. However, that isn't necessarily true.

The new reason code definitions are much more generalized. However, each general reason code has numerous conditions. Each condition has a different chargeback time limit, compelling evidence requirement, and representment option.

Understanding which condition applies to the chargeback adds extra steps to an already complicated and confusing process, costing merchants extra time and money.

Additionally, issuers may elect to continue using outdated reason codes for some time yet. This means a merchant’s management strategies will vary greatly from one chargeback to another, depending on the issuer and the chosen method of conveying information.

Lastly, friendly fraud has made chargeback reason codes a somewhat ineffective management tool. Without professional assistance, merchants will be unable to distinguish between legitimate and illegitimate chargebacks. Friendly fraud can be disguised behind virtually any reason code.

Staying On Top of Industry Changes

Merchants determined to use in-house teams for chargeback management should dedicate someone to reviewing network requirements, regulations and legal framework on a constant basis. It is absolutely essential for merchants to stay on top of these changes.

However, despite a merchant’s best efforts, it is an incredibly difficult task to stay current on all regulations from all networks. Networks often put the burden of discover on merchants without much notice of updates. Additionally, industry nomenclature makes it difficult to understand and implement changes once they’re detected.

That’s why it is advantageous for merchants to work with a third-party service provider, like Chargebacks911®. Unlike merchants, who are tasked with numerous business management responsibilities each day, chargeback experts are focused solely on chargeback management.

At Chargebacks911®, our team of qualified specialists constantly monitor the payments and ecommerce industries for policy changes, updates, emerging threats, and profitability optimization opportunities.

Whenever you are ready for professional assistance, we are willing and able to help.

At Chargebacks911®, it’s our business to understand the dynamics of the ecommerce business. Contact us today to see what we can do to ease the burden of chargebacks and friendly fraud.

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