Credit card chargebacks are not only undesirable to merchants because they result in a financial loss, but also because most credit card companies have strict chargeback ratios that merchants cannot exceed without placing their accounts in jeopardy.
To help merchants identify the reason for any chargebacks that do occur and take action to prevent them in the future, all the major credit card companies/brands have chargeback codes that help you identify the reason for the reversal.
Below are some of the most common codes and descriptions according to each card company as well as some ways to prevent those kinds of chargebacks.
- Merchandise Not Received: code 30 / code 4855 / code C08 / code RG
This kind of chargeback occurs when the customer places an order and claims to have never received it. In some instances, this is due to an oversight or a lost package; however it can also be the result of “friendly fraud,” or a customer who intentionally or mistakenly claims not to have received merchandise that was delivered.
To reduce these kinds of chargebacks, make sure you clearly communicate the expected shipping and arrival dates to the customer when he places his order and contact him if the shipment will be delayed for any reason. Another way to prevent this kind of chargeback is make it easier and more convenient for your customer to contact your customer service department than it is to call his bank.
- Merchandise Not As Described: code 53 / code 4853 / code C31 / code RM
When a customer receives an item that he or she feels is “significantly” different than you described it, they may dispute the charge. To reduce these kinds of chargebacks, always provide a thorough and honest description of the merchandise on your website, along with any available product statistics, and clear pictures from several angles.
A clear, reasonable, and readily-accessible return policy on your website also helps prevent these kinds of chargebacks, since most honest customers will attempt to return an item before they charge it back. Make sure you provide excellent customer service, including answering all a customer’s calls and making the return process as simple as possible.
You should also exercise caution in your marketing materials both on and off your website. Extravagant or exaggerated claims, including exceptional results portrayed as average, can lead to unrealistic expectations on the part of your customer and a chargeback when their expectations meet reality.
- Unrecognized Transaction: code 75 / code 4863
If a customer fails to recognize a credit card charge, they may assume it to be fraudulent and charge back their card without a thorough investigation. Always include the business name as your customer knows it in your credit 
card descriptor (what shows up on the customer’s bank statement) – even if your legal business name is different. You can even often include a phone number in your descriptor, so the customer can call if they are unsure who you are. We find it is best to use 800 numbers, as they are less likely to be mistaken for account numbers.
- Fraudulent Transaction: code 83 / code 4840 / code 4540 / Code FR2
This code is assigned to transactions that were charged back due to legitimate fraud. Generally this occurs with high-ticket items, but some fraudsters will make one or more initial low-value purchases to test the card before becoming bolder.
To protect yourself and your customers from fraud, always make sure to obtain the card’s security code (CVV, CSC, or CVC) during the checkout process. Other anti-fraud measures include using your gateway to compare the card’s on-file address against the billing address provided, and the origin of the customer’s IP address against the origin of the credit card. If you are interested in any anti-fraud services, please feel free to contact us here.
Although chargebacks are inevitable, prevention is your first line of defense. A skilled customer service staff that responds quickly to customers can make a significant difference, as can chargeback mitigation programs. If you would like to learn more about some of the programs E-commerce 4 Internet Marketers offers that can potentially stop chargebacks before they occur, contact us for more information.