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Preventing Fraud & Chargebacks

Learn more about Chargebacks

A chargeback is a transaction that a credit card issuing bank returns to the merchant due to a variety of reasons (see Reason Codes1). The most common reasons for chargeback are:

  • Cardholder dispute
  • Fraud
  • Processing or authorization error


How to prevent a Chargeback

Although you probably cannot avoid chargebacks completely, you can take steps to reduce or prevent them.

Here are some recommended processing steps:


Retail (card-present)

  • If the card does not electronically read you must take a carbon imprint of the card
  • Have any return policy printed on your credit card receipt or sign separate agreement


E-commerce or Mail/Phone Order

  • Always include the three digit code on the back of the card (V-code) with authorization
  • Include billing address and zip code with authorization
  • Send product to verified address
  • Request signed confirmation when delivering product
  • Do not process an order over multiple credit card numbers
  • Charge card same day you ship your product
  • Have an electronic record of your customer agreeing to any return policy


Not every chargeback can be remedied, but many can be resolved without the loss of the sale. This can be accomplished by providing additional information about the transaction or about actions you took regarding it. Each cycle in a chargeback has specific time frames during which action can be taken. Therefore, it is critical to respond promptly to all retrieval requests and requests for chargeback documentation.

When a chargeback is received, it comes in the form of a ‘chargeback memo.’

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Fraud Prevention Best Practices for Merchants
- by VISA

Click here for a list of
helpful hints on fraud
prevention from VISA.

The most common Reason Codes

Reason Code Description Documentation Required to Dispute Chargeback
Reason Code 30:
Services Not Provided or Merchandise Not Received
The cardholder is claiming that they did not receive purchased services, shipped merchandise, merchandise delivered at the agreed-upon location or by the agreed-upon date.
  • That the credit was processed
  • That the cardholder received merchandise or services (i.e. proof of delivery)
  • If the contracted services were rendered please provide any evidence indicating that the customer acknowledged receipt.
Reason Code 53:
Not as Described or Defective Merchandise
The cardholder claims the merchant completed multiple transactions with a single card, but without the cardholder’s permission.
  • If the appropriate credit has been processed, provide evidence of the credit
  • If the cardholder did participate in more than one valid transaction, please provide the appropriate documentation (i.e. sales receipts, invoices)
Reason Code 71:
Declined Authorization
The cardholder and/or their bank is claiming that the merchant completed the transaction after authorization was declined.
  • If you obtained an authorization approval code, provide transaction date and amount
  • Accept the chargeback if your first authorization attempt was declined and you still proceeded 
Reason Code 72:
No Authorization
The cardholder and/or their bank is claiming that the merchant did not obtain authorization for the transaction. 
  • If you obtained an authorization approval, provide transaction date and amount
  • If you did not, accept the chargeback 
Reason Code 75:
Cardholder Does Not Recognize Transaction
The cardholder doesn’t recognize the transaction.
  • Provide any documentation or evidence that would assist the cardholder in recognizing the transaction
  • Sales receipt
  • Shipping invoice or delivery receipts
  • Description of merchandise or service purchased 
Reason Code 81:
Fraudulent Transaction, Card Present Environment
The cardholder is stating that they did not authorize this transaction.
  • Provide a signed sales draft and proof that the card was present
  • Provide a card imprint and signature 
Reason Code 82:
Duplicate Processing
The cardholder is claiming a single transaction was processed more than once.
  • Provide sales receipts that are not duplicates supporting the two separate transactions
  • If you recognize that the transactions are duplicates and have processed the credit, provide the documentation showing the credit
  • If you have not already performed the credit and you recognize that it is indeed a duplicate, the chargeback will take care of it, don’t process the credit 
Reason Code 83:
Fraudulent Transaction, Card Absent Environment
The cardholder is claiming they did not authorize the transaction.
  • Provide proof of a positive address verification response and/or a Card Verification Value (CVV), also known as Card Security Code, response
  • Provide a signed sales draft and proof that the card was present
  • Provide a signed proof of delivery