Chargeback Guide

13 December 2018

Summary of Changes, 13 December 2018

The following are changes with the most recent publication of this document.

Description of Change Where to Look

Incorporated the changes announced in “AN

2025—Mastercard Rebranding of the Recurring

Payment Cancellation Service” that included

rebranding the Recurring Payment Cancellation

Service to the Payment Cancellation Service. DE

72 (Data Record Text) was not changed.

Throughout

Chapter 2—Dual Message System

Chargebacks

Incorporated the changes announced in “AN

1674—Dispute Resolution Initiative—Revised

Dispute Processing and Chargeback Rules” that

included:

Throughout

• Remove conditions under chargeback reason

4837 (No Cardholder Authorization), which

had allowed an acquirer to provide brand new

information of merchant name or date as a

potential remedy to this chargeback. This

applies when the merchant information is a

complete mismatch between authorization

and clearing.

• Require cardholder letter or email as

supporting documentation in first chargebacks

for chargeback reason code 4863 (Cardholder

Does Not Recognize). Documentation must be

a direct result of cardholder communication.

Expedited Dispute Resolution forms will not be

allowed.

Summary of Changes, 13 December 2018

Chargeback Guide • 13 December 2018

Description of Change Where to Look

• Require cardholder letter, email or Expedited

Dispute Form in first chargebacks for

Cardholder Disputes reason codes involving

Digital Goods and Recurring Payment

transactions. For Digital Goods, require

cardholder documentation (cardholder letter,

email, or Expedited Dispute Form) to support

the reason for the dispute. For canceled

Recurring Payments, require documentation

(cardholder letter, email, Expedited Billing

Dispute Form) in the first chargeback even if

there was a previous chargeback with the

same PAN and merchant combination

disputing a canceled recurring payment. The

documentation may be either new

documentation or the documentation provided

in the referenced previous chargeback.

• Require cardholder dispute documentation (for

example, cardholder’s final bill/receipt) in the

first chargeback for reason code 4834/4831

Point of Interaction (POI) Error Family—

Incorrect Transaction Amount/Transaction

Amount Differs.

• Remove Rule violations for “SecureCode

(outside of a rejected chargeback),”

“Counterfeit Goods,” and “Timeframe

Extension” from pre-compliance and

compliance case filing reasons from Chapter 5

of the Chargeback Guide.

• Require pre-compliance prior to escalation as a

compliance case for ALL applicable compliance

filing reasons, cases, products and/or

transaction types (excluding Fee Collection

dispute situations).

• Reduce pre-compliance and compliance case

filing timeframes from 180 days to 120 days

from the central site processing date/violation

date or 45 days from the chargeback rejects

date/fee collection date.

Summary of Changes, 13 December 2018

Chargeback Guide • 13 December 2018

Description of Change Where to Look

Incorporated the changes announced in “AN

1677—Revised Standards—Questionable

Merchant Activity Chargebacks” that included

removing certain restrictions from chargeback

reason code 4849 that will allow issuers to

exercise their chargeback rights resulting directly

from a Mastercard compliance determination.

Fraud-related Chargebacks > Questionable

Merchant Activity

Chapter 3—Single Message System

Chargebacks

Incorporated the changes announced in “AN

2044—Revised Standards—ATM Chip Liability

Shift” that included expanding the domestic and

intraregional ATM chip liability shift to include the

remaining non-participating countries in the Asia/

Pacific Region (excluding China, Japan, and

Taiwan at the domestic level).

Chargeback Reason Codes > Chip Liability Shift >

Issuer Chargeback > Chip Liability Shift Program

for Domestic and Intraregional Transactions

Chapter 5—Compliance Case Filing

Incorporated the changes announced in “AN

1677—Revised Standards—Questionable

Merchant Activity Chargebacks” that included

removing certain restrictions from chargeback

reason code 4849 that will allow issuers to

exercise their chargeback rights resulting directly

from a Mastercard compliance determination.

Time Frames and Requirements > Improper

Identification of a Merchant as Mastercard

SecureCode-enabled

Chapter 6—Mastercard Merchant Presented

Incorporated the changes announced in “AN

1708—New Process and Revised Standards—

Mastercard Merchant Presented QR Dispute

Resolution Process for MasterCom Case Filing—

Update” that included:

• Incorporated the branding name change from

Masterpass QR to Mastercard Merchant

Presented QR.

• Updated the Standards to include Nigeria-

specific time frames within the attached

Revised Standards—Mastercard Merchant

Presented QR Dispute Resolution Process for

MasterCom Case Filing—Update document.

Throughout

Summary of Changes, 13 December 2018

Chargeback Guide • 13 December 2018

Description of Change Where to Look

Appendix F—Transaction Identification

Requirements

Incorporated the changes announced in “AN

2151—Revised Standards—Guidance for

Customers Regarding Mastercard Biometric Card”

that included information on identifying when

successful biometric cardholder verification

occurred.

Mastercard Biometric Card Program Transactions

Summary of Changes, 13 December 2018

Chargeback Guide • 13 December 2018

Contents

Summary of Changes, 13 December 2018.......................................................2

Chapter 1: General Information......................................................................... 20

Single and Dual Message Systems.................................................................................... 21

Definitions....................................................................................................................... 21

Chargeback Cycles and Arbitration Case Filing................................................................. 21

Overview of the Single and Dual Message System Chargeback Cycles and

Arbitration Case Filing................................................................................................. 21

Compliance Case Filing.................................................................................................... 23

Reversals.......................................................................................................................... 24

Rights and Obligations..................................................................................................... 24

Hardship Variances...........................................................................................................24

Related Documentation....................................................................................................25

Chapter 2: Dual Message System Chargebacks..........................................26

Overview..........................................................................................................................30

Authorization-related Chargeback ...................................................................................30

Chargeback.................................................................................................................31

Required Authorization Not Obtained..................................................................... 31

Expired Chargeback Protection Period..................................................................... 34

Multiple Authorization Requests............................................................................. 35

CAT 3 Device.......................................................................................................... 36

Second Presentment....................................................................................................39

Required Authorization Obtained............................................................................39

Expired Chargeback Protection Period..................................................................... 40

Multiple Authorization Requests............................................................................. 41

One Authorization with Multiple Clearing Records.................................................. 41

CAT 3 Device or In-Flight Transaction Occurring in Taiwan....................................... 42

Credit Previously Issued........................................................................................... 43

Additional Second Presentment Options..................................................................43

Arbitration Chargeback............................................................................................... 44

General Arbitration Chargeback..............................................................................44

Acquirer Reference Data (ARD) Does Not Match or is Invalid................................... 44

Additional Arbitration Chargeback Options.............................................................45

Cardholder Dispute Chargeback ......................................................................................46

Chargeback.................................................................................................................48

Goods or Services Were Either Not as Described or Defective.................................. 48

Goods or Services Not Provided...............................................................................49

Contents

Chargeback Guide • 13 December 2018

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only..........53

Digital Goods Purchase of USD 25 or Less............................................................... 55

Credit Not Processed...............................................................................................58

Counterfeit Goods.................................................................................................. 59

Cardholder Dispute of a Recurring Transaction........................................................ 60

Issuer Dispute of a Recurring Transaction.................................................................61

Addendum Dispute.................................................................................................63

“No-Show” Hotel Charge....................................................................................... 64

Transaction Did Not Complete.................................................................................65

Timeshares..............................................................................................................66

Credit Posted as a Purchase.....................................................................................66

Second Presentment....................................................................................................67

General Second Presentment.................................................................................. 67

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only..........68

Digital Goods Purchase of USD 25 or Less............................................................... 69

Credit Previously Issued........................................................................................... 69

Additional Second Presentment Options..................................................................71

Arbitration Chargeback............................................................................................... 72

General Arbitration Chargeback..............................................................................72

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only..........74

Acquirer Reference Data (ARD) Does Not Match or is Invalid................................... 75

Additional Arbitration Chargeback Options.............................................................76

Fraud-related Chargebacks...............................................................................................76

No Cardholder Authorization.......................................................................................77

Chargeback............................................................................................................ 79

Second Presentment............................................................................................... 82

Arbitration Chargeback...........................................................................................94

Fraudulent Processing of Transactions.......................................................................... 98

First Chargeback................................................................................................... 100

Second Presentment............................................................................................. 101

Arbitration Chargeback.........................................................................................106

Questionable Merchant Activity ................................................................................ 108

First Chargeback................................................................................................... 109

Second Presentment............................................................................................. 112

Arbitration Chargeback.........................................................................................115

Cardholder Does Not Recognize ............................................................................... 115

First Chargeback................................................................................................... 118

Second Presentment............................................................................................. 119

Arbitration Chargeback.........................................................................................124

Chip Liability Shift......................................................................................................128

Chargeback.......................................................................................................... 133

Second Presentment............................................................................................. 134

Arbitration Chargeback.........................................................................................140

Contents

Chargeback Guide • 13 December 2018

Chip Liability Shift—Lost/Stolen/Never Received Issue (NRI) Fraud ..............................141

Chargeback.......................................................................................................... 147

Second Presentment............................................................................................. 149

Arbitration Chargeback.........................................................................................155

Point-of-Interaction Error................................................................................................156

Chargeback...............................................................................................................157

Cardholder Debited More than Once for the Same Goods or Services................... 157

Transaction Amount Differs...................................................................................158

ATM Disputes....................................................................................................... 159

Charges for Loss, Theft, or Damages.....................................................................160

Late Presentment.................................................................................................. 162

POI Currency Conversion (Dynamic Currency Conversion)..................................... 163

Merchant Credit Correcting Error Resulting in Cardholder Currency Exchange

Loss...................................................................................................................... 164

Improper Merchant Surcharge (Intra-European and Inter-European transactions

only)..................................................................................................................... 165

Unreasonable Amount—Intra-European Economic Area (EEA) Transactions Only... 166

Second Presentment..................................................................................................166

Cardholder Debited More than Once for the Same Goods or Services................... 166

Cardholder Debited More than Once for the Same Goods or Services—PIN

Transaction........................................................................................................... 167

Transaction Amount Differs...................................................................................168

ATM Disputes....................................................................................................... 168

Charges for Loss, Theft, or Damages.....................................................................169

Late Presentment.................................................................................................. 170

Late Presentment—Corrected Transaction Date.....................................................171

POI Currency Conversion (Dynamic Currency Conversion)..................................... 172

Unreasonable Amount (Intra-EEA Transactions Only)............................................. 172

Credit Previously Issued......................................................................................... 173

Improper Merchant Surcharge (Intra-European and Inter-European transactions

only)..................................................................................................................... 173

Additional Second Presentment Options................................................................175

Arbitration Chargeback............................................................................................. 176

General Arbitration Chargeback............................................................................176

Acquirer Reference Data (ARD) Does Not Match or is Invalid................................. 177

Additional Arbitration Chargeback Options...........................................................178

Cardholder Dispute—Not Elsewhere Classified (U.S. Region Only).................................. 179

Installment Billing Dispute (Participating Countries Only)................................................ 179

Domestic Chargeback Dispute (Europe Region Only)...................................................... 179

Requirements for Issuer’s First Chargeback, Acquirer’s Second Presentment, and

Issuer’s Arbitration Chargeback..................................................................................179

Improper Use of Message Reason Code 4999............................................................179

Arbitration Case Filing............................................................................................... 179

Contents

Chargeback Guide • 13 December 2018

Additional Processing Notes........................................................................................... 179

Progressive Handling Fees...............................................................................................180

Progressive Handling Fee Overview............................................................................ 180

Issuer Use of Message Reason Code 7622.............................................................180

Acquirer Use of Message Reason Code 7623........................................................ 180

Issuer Use of Message Reason Code 7624.............................................................181

Acquirer Use of Message Reason Code 7627—No MAC Provided......................... 181

Acquirer Use of Message Reason Code 7627—Face-to-Face or CAT Level 2

Transaction........................................................................................................... 181

Required Fields in Fee Collection Messages............................................................182

Intra-European and Inter-European Dispute Administration Fee (Mastercard POS)........... 183

Chargeback Message Reason Codes.............................................................................. 184

First Chargeback: MTI 1442.......................................................................................184

Second Presentment: MTI 1240................................................................................. 184

Technical Return....................................................................................................184

Documentation Return..........................................................................................184

Substance Return..................................................................................................184

Arbitration Chargeback: MTI 1442............................................................................ 185

Technical Return....................................................................................................185

Documentation Return..........................................................................................185

Second Presentment/1240 IPM (Function Codes 205 or 282) Message Reason Code

Usage........................................................................................................................186

Arbitration Chargeback/1442 IPM (Function Codes 451 or 454) Message Reason

Code Usage...............................................................................................................190

Chapter 3: Single Message System Chargebacks.................................... 193

Overview........................................................................................................................195

Exception Transaction Types............................................................................................195

Supporting Documentation............................................................................................ 196

Acquirer Adjustment Reason Codes............................................................................... 196

Message Reason Code 06—Correction of a Representment.......................................196

Acquirer Correction...............................................................................................196

Issuer Chargeback.................................................................................................197

Message Reason Code 10—Correct a Terminal Malfunction.......................................197

Acquirer Correction...............................................................................................197

Issuer Chargeback.................................................................................................199

Message Reason Code 20—Returned Item (U.S. Shared Deposits Only)..................... 199

Message Reason Code 24—Empty Deposit Envelope (U.S. Shared Deposits Only)...... 199

Message Reason Code 25—Error in Addition (U.S. Shared Deposits Only).................. 199

Message Reason Code 26—Error in Settlement (U.S. Shared Deposits Only)...............199

Message Reason Code 28—Non-Cash Item Deposited (U.S. Shared Deposits Only)....199

Contents

Chargeback Guide • 13 December 2018

Message Reason Code 29—Foreign/Counterfeit Currency Deposited (U.S. Shared

Deposits Only)........................................................................................................... 199

Message Reason Code 30—Cardholder Disputed Amount (U.S. Shared Deposits

Only)......................................................................................................................... 199

Message Reason Code 85—Adjustment Reversal.......................................................199

Acquirer Adjustment.............................................................................................199

Issuer Chargeback.................................................................................................200

Chargeback Reason Codes.............................................................................................200

Correction of a Chargeback.......................................................................................201

Issuer Correction...................................................................................................201

Acquirer Representment........................................................................................201

Cash Dispute-ATM Only.............................................................................................201

Issuer Chargeback.................................................................................................201

Acquirer Representment (Second Presentment)..................................................... 202

Mastercard Automated Reversal............................................................................203

Cardholder Disputed Amount (U.S. Shared Deposits Only)......................................... 204

Defective/Not as Described—Intra-U.S. Region and U.S. Territories Only.....................204

Chip Liability Shift......................................................................................................204

Issuer Chargeback.................................................................................................204

Improper Use for Issuer Chargeback......................................................................211

Acquirer Representment (Second Presentment)..................................................... 213

Transaction Amount Differs....................................................................................... 214

Issuer Chargeback.................................................................................................214

Acquirer Representment (Second Presentment)..................................................... 214

Mastercard Automated Reversal............................................................................215

Duplicate Transaction.................................................................................................215

Issuer Chargeback.................................................................................................215

Acquirer Representment (Second Presentment)..................................................... 216

Mastercard Automated Reversal............................................................................216

No Cardholder Authorization.....................................................................................217

Issuer Chargeback.................................................................................................217

Acquirer Representment (Second Presentment)..................................................... 218

Mastercard Automated Reversal............................................................................219

Credit Not Received...................................................................................................219

Issuer Chargeback.................................................................................................219

Acquirer Representment (Second Presentment)..................................................... 220

Mastercard Automated Reversal............................................................................221

Goods or Services Not Provided................................................................................. 221

Issuer Chargeback.................................................................................................221

Acquirer Representment (Second Presentment)..................................................... 223

Mastercard Automated Reversal............................................................................223

Late Presentment.......................................................................................................224

Issuer Chargeback.................................................................................................224

Contents

Chargeback Guide • 13 December 2018

Acquirer Representment (Second Presentment)..................................................... 224

Mastercard Automated Reversal............................................................................225

Invalid Adjustment—Account Closed.........................................................................225

Issuer Chargeback.................................................................................................225

Acquirer Representment (Second Presentment)..................................................... 226

Invalid Adjustment—Insufficient Funds...................................................................... 226

Issuer Chargeback.................................................................................................226

Acquirer Representment (Second Presentment)..................................................... 226

Chapter 4: Arbitration Case Filing...................................................................227

Overview........................................................................................................................228

MasterCom....................................................................................................................228

How to File, and Respond to, an Arbitration Case.......................................................... 228

Time Frames and Requirements......................................................................................229

Mastercard Review Process.............................................................................................232

Fees............................................................................................................................... 233

Intra-European and Inter-European Domestic Disputes....................................................234

Intra-EEA Third Party Processed Disputes........................................................................ 235

Appeals..........................................................................................................................236

Time Frames..............................................................................................................236

How to File an Appeal............................................................................................... 236

Appeal Review Process.............................................................................................. 237

Chapter 5: Compliance Case Filing..................................................................238

Overview........................................................................................................................239

MasterCom....................................................................................................................239

How to File, and Respond to, a Compliance Case...........................................................239

Time Frames and Requirements......................................................................................241

Missing, Invalid, or Inaccurate Authorization Data......................................................241

Inaccurate Clearing Data That Restricts Chargeback Cycles........................................ 242

Fee Collection/1740 Message.................................................................................... 243

Failure to Provide the TID........................................................................................... 243

Merchant Not Listed or Improperly Listed on MATCH.................................................244

Unjust Enrichment..................................................................................................... 245

Acquirer Request for Cardholder Statement of Fraud................................................. 246

Issuer Listed in Mastercard Announcement................................................................ 247

MoneySend Payment Transactions............................................................................. 247

All Other Rules Violations.......................................................................................... 248

Mastercard Review Process.............................................................................................248

Fees............................................................................................................................... 249

Appeals..........................................................................................................................250

Contents

Chargeback Guide • 13 December 2018

Time Frames..............................................................................................................250

How to File an Appeal............................................................................................... 250

Appeal Review Process.............................................................................................. 251

Chapter 6: Mastercard Merchant Presented QR......................................252

Overview........................................................................................................................253

How to File, and Respond to, Disputes through the Compliance Case Filing Process....... 253

Dispute Reasons.............................................................................................................255

Goods or Services were Either not as Described or Defective......................................255

Pre-Compliance Case............................................................................................ 255

Compliance Case.................................................................................................. 257

Goods or Services were not Provided......................................................................... 259

Pre-Compliance Case............................................................................................ 259

Compliance Case.................................................................................................. 263

Credit not Processed..................................................................................................266

Pre-Compliance Case............................................................................................ 266

Compliance Case.................................................................................................. 269

Paid by Other Means................................................................................................. 271

Pre-Compliance Case............................................................................................ 271

Compliance Case.................................................................................................. 272

Billed an Incorrect Amount........................................................................................ 274

Pre-Compliance Case............................................................................................ 274

Compliance Case.................................................................................................. 275

Duplicate Transaction.................................................................................................277

Pre-Compliance Case............................................................................................ 277

Compliance Case.................................................................................................. 278

Appendix A: Chargebacks—Mastercard Europe ATM

Transactions (Mastercard, Maestro, and Cirrus).......................................280

Overview........................................................................................................................282

Clearing......................................................................................................................... 282

Processing Cycles........................................................................................................... 282

Processing Cycle for ATM Transactions....................................................................... 282

Presentment.............................................................................................................. 283

Reversals...............................................................................................................283

Chargebacks and Second Presentments.....................................................................284

Chargebacks.........................................................................................................284

Second Presentment............................................................................................. 284

Intra-European and Inter-European Dispute Administration Fee (ATM)................... 285

Chip Transactions...................................................................................................... 286

Message Reason Codes..................................................................................................286

Contents

Chargeback Guide • 13 December 2018

Message Reason Code 4804—Multiple Processing.....................................................287

Proper Use of Message Reason Code 4804........................................................... 287

Improper Use of Second Presentment....................................................................287

Message Reason Code 4808—Transaction Not Authorized........................................ 287

Proper Use of Message Reason Code 4808........................................................... 287

Proper Use for Issuer’s First Chargeback.................................................................288

Proper Use for Acquirer’s Second Presentment...................................................... 288

Message Reason Code 4809—Transaction Not Reconciled.........................................289

Proper Use of Message Reason Code 4809........................................................... 289

Improper Use of Acquirer’s Second Presentment....................................................290

Message Reason Code 4811—Stale Transaction........................................................ 290

Proper Use of Message Reason Code 4811........................................................... 290

Improper Use of Acquirer’s Second Presentment....................................................290

Message Reason Code 4834—Duplicate Processing of Transaction............................ 290

Proper Use of Message Reason Code 4834........................................................... 290

Proper Use for Issuer’s First Chargeback.................................................................290

Proper Use for Acquirer’s Second Presentment...................................................... 291

Message Reason Code 4842—Late Presentment........................................................292

Proper Use of Message Reason Code 4842........................................................... 292

Proper Use for Issuer’s First Chargeback.................................................................293

Improper Use for Issuer’s First Chargeback.............................................................293

Proper Use for Acquirer’s Second Presentment...................................................... 293

Message Reason Code 4846—Currency Errors...........................................................294

Proper Use of Message Reason Code 4846........................................................... 294

Proper Use for Issuer’s First Chargeback.................................................................294

Proper Use for Acquirer’s Second Presentment...................................................... 295

Improper Use for Acquirer’s Second Presentment.................................................. 295

Proper Use for New Presentments......................................................................... 296

Message Reason Code 4859—ATM Dispute.............................................................. 296

Proper Use of Message Reason Code 4859........................................................... 296

Improper Use of Message Reason Code 4859....................................................... 296

Proper Use for Issuer’s First Chargeback.................................................................296

Proper Use For Acquirer’s Second Presentment...................................................... 296

Message Reason Code 4870—Chip Liability Shift...................................................... 298

Proper Use of Message Reason Code 4870........................................................... 298

Improper Use of Message Reason Code 4870....................................................... 299

Proper Use for Issuer’s First Chargeback.................................................................300

Proper Use for Acquirer’s Second Presentment...................................................... 300

Message Reason Code 4880—Late Presentment........................................................302

Proper Use of Intra-European or Inter-European Message Reason Code 4880........302

Improper Use for Issuer’s First Chargeback.............................................................302

Proper Use for Acquirer’s Second Presentment...................................................... 303

Contents

Chargeback Guide • 13 December 2018

Appendix B: Chargebacks—Maestro POS Transactions........................304

Overview........................................................................................................................307

Exception Item Processing.............................................................................................. 308

Exception Transaction Types....................................................................................... 308

Reversals................................................................................................................... 308

Retrieval Requests......................................................................................................308

Acquirer Requirements..........................................................................................308

Chip Transactions...................................................................................................... 309

Chargebacks............................................................................................................. 309

Chargeback Procedures.........................................................................................309

Supporting Documentation for a Chargeback....................................................... 309

Second Presentment Procedures................................................................................ 310

Supporting Documentation for a Second Presentment.......................................... 310

Message Reason Codes for Interregional Transactions.................................................... 311

Interregional Message Reason Code 4804—Transaction Multiple Processing..............312

Proper Use of Interregional Message Reason Code 4804....................................... 312

Improper Use for Acquirer’s Second Presentment.................................................. 312

Interregional Message Reason Code 4809—Transaction Not Reconciled ................... 312

Proper Use of Interregional Message Reason Code 4809....................................... 312

Improper Use for Acquirer’s Second Presentment.................................................. 312

Interregional Message Reason Code 4811—Stale Transaction.................................... 312

Proper Use of Interregional Message Reason Code 4811....................................... 312

Improper Use of Acquirer’s Second Presentment....................................................312

Interregional Message Reason Code 4831—Disputed Amount...................................312

Proper Use of Interregional Message Reason Code 4831....................................... 312

Proper Use for Issuer’s First Chargeback.................................................................313

Proper Use for Acquirer’s Second Presentment...................................................... 313

Interregional Message Reason Code 4834—Duplicate Transaction ............................ 313

Proper Use of Interregional Message Reason Code 4834....................................... 313

Proper Use for Issuer’s First Chargeback.................................................................313

Proper Use for Acquirer’s Second Presentment...................................................... 313

Interregional Message Reason Code 4837—No Cardholder Authorization................. 314

Proper Use of Interregional Message Reason Code 4837....................................... 314

Improper Use of Interregional Message Reason Code 4837................................... 314

Proper Use for Acquirer’s Second Presentment...................................................... 315

Interregional Message Reason Code 4855—Goods or Services Not Delivered.............316

Proper Use of Interregional Message Reason Code 4855....................................... 316

Improper Use for Issuer’s First Chargeback.............................................................317

Proper Use for Acquirer’s Second Presentment...................................................... 317

Interregional Message Reason Code 4860—Credit Not Received............................... 318

Proper Use of Interregional Message Reason Code 4860....................................... 318

Contents

Chargeback Guide • 13 December 2018

Proper Use for Issuer’s First Chargeback.................................................................318

Proper Use for Acquirer’s Second Presentment...................................................... 318

Interregional Message Reason Code 4870—Chip Liability Shift.................................. 318

Proper Use of Interregional Message Reason Code 4870....................................... 318

Improper Use of Interregional Message Reason Code 4870................................... 320

Proper Use for Acquirer’s Second Presentment...................................................... 320

Interregional Message Reason Code 4880—Late Presentment................................... 322

Proper Use of Interregional Message Reason Code 4880....................................... 322

Proper Use for Acquirer’s Second Presentment...................................................... 323

Message Reason Codes for Intra-European and Inter-European Transactions...................323

Intra-European Message Reason Code 4808—Transaction Not Authorized................ 324

Proper Use of Intra-European Message Reason Code 4808....................................325

Improper Use of Intra-European Message Reason Code 4808................................325

Proper Use for Issuer’s First Chargeback.................................................................325

Proper Use for Acquirer’s Second Presentment...................................................... 326

Improper Use for Acquirer’s Second Presentment.................................................. 327

Intra-European and Inter-European Message Reason Code 4831—Disputed Amount.327

Proper Use of Intra-European and Inter-European Message Reason Code 4831..... 327

Proper Use for Issuer’s First Chargeback.................................................................328

Proper Use for Acquirer’s Second Presentment...................................................... 330

Intra-European Message Reason Code 4834—Duplicate Processing of Transaction.....331

Proper Use of Intra-European Message Reason Code 4834....................................331

Proper Use for Issuer’s First Chargeback.................................................................331

Proper Use for Acquirer’s Second Presentment...................................................... 331

Intra-European Message Reason Code 4837—No Cardholder Authorization..............333

Masterpass Transactions........................................................................................333

Proper Use of Intra-European Message Reason Code 4837....................................334

Improper Use of Intra-European Message Reason Code 4837................................334

Proper Use for Issuer’s First Chargeback.................................................................335

Proper Use for Acquirer’s Second Presentment...................................................... 335

Improper Use for Acquirer's Second Presentment.................................................. 337

Intra-European Message Reason Code 4841—Canceled Recurring or Digital Goods

Transactions...............................................................................................................338

Proper Use of Intra-European Message Reason Code 4841....................................338

Proper Use for Issuer’s First Chargeback.................................................................339

Proper Use for Acquirer's Second Presentment...................................................... 342

Improper Use for Acquirer’s Second Presentment.................................................. 344

Intra-European Message Reason Code 4846—Currency Errors...................................344

Proper Use of Intra-European Message Reason Code 4846....................................344

Proper Use for Issuer’s First Chargeback.................................................................344

Proper Use for Acquirer’s Second Presentment...................................................... 346

Improper Use for Acquirer’s Second Presentment.................................................. 346

Proper Use for New Presentments......................................................................... 346

Contents

Chargeback Guide • 13 December 2018

Intra-European Message Reason Code 4855—Goods or Services Not Provided.......... 347

Proper Use of Intra-European Message Reason Code 4855....................................347

Improper Use for Issuer’s First Chargeback.............................................................350

Proper Use for Acquirer’s Second Presentment...................................................... 350

Intra-European Message Reason Code 4860—Credit Not Received............................ 352

Proper Use of Intra-European Message Reason Code 4860....................................352

Improper Use of Intra-European Message Reason Code 4860................................353

Proper Use for Issuer’s First Chargeback.................................................................353

Proper Use for Acquirer’s Second Presentment...................................................... 355

Reason Code 4860—Arbitration Case Filing..........................................................357

Intra-European Message Reason Code 4870—Chip Liability Shift...............................358

Proper Use for Intra-European Message Reason Code 4870.................................. 358

Improper Use of Intra-European Message Reason Code 4870................................358

Proper Use for Issuer’s First Chargeback.................................................................358

Proper Use for Acquirer’s Second Presentment...................................................... 359

Intra-European Message Reason Code 4880—Late Presentment................................362

Proper Use of Intra-European Message Reason Code 4880....................................362

Improper Use for Issuer’s First Chargeback.............................................................362

Proper Use for Acquirer’s Second Presentment...................................................... 362

Domestic Chargeback Rules........................................................................................... 362

Additional Rules Applicable to Domestic Transactions in Ireland, Turkey, and France... 363

Proper Use of Message Reason Code 4837........................................................... 363

Improper Use of Message Reason Code 4837....................................................... 363

Proper Use for Acquirer’s Second Presentment...................................................... 363

Arbitration Case Filing...........................................................................................363

Appendix C: CVM Limit Amounts....................................................................364

Overview........................................................................................................................365

CVM Limit Amounts.......................................................................................................365

Appendix D: Domestic Chargebacks, Arbitration Case Filing, and

Compliance Case Filing......................................................................................... 366

Participating Countries—Installment Billing Dispute (Reason Code 4850)........................369

Proper Use of Message Reason Code 4850................................................................369

Improper Use of Message Reason Code 4850............................................................370

Proper Use of Issuer’s First Chargeback...................................................................... 370

Incorrect Number of Installments...........................................................................371

Incorrect Installment Amount................................................................................371

Premature Processing of Installment...................................................................... 371

Not an Installment Transaction.............................................................................. 372

Invalid Installment Acceleration............................................................................. 372

Contents

Chargeback Guide • 13 December 2018

Subsequent Installments Charged Back After Chargeback of First Installment for

Message Reason Code 4837................................................................................. 372

Proper Use for Acquirer’s Second Presentment........................................................... 373

Correct Number of Installments.............................................................................373

Correct Installment Amount..................................................................................373

Installment Not Premature.....................................................................................374

Valid Installment Acceleration............................................................................... 374

Additional Remedies............................................................................................. 375

Arbitration Chargeback............................................................................................. 375

Arbitration Case Filing............................................................................................... 376

Croatia, Cyprus, Czech Republic, Hungary, Slovakia, and Slovenia—Intracountry

Acquirer Domain Mobile Remote Payment Transactions..................................................376

Select Countries in Central and Eastern Europe—Masterpass Transactions......................376

India.............................................................................................................................. 379

Mexico...........................................................................................................................379

South Africa...................................................................................................................379

U.S. Region—Cardholder Dispute—Not Elsewhere Classified (Reason Code 4854)..........379

Proper Use of Message Reason Code 4854................................................................379

Improper Use of Message Reason Code 4854............................................................381

Proper Use for Issuer’s First Chargeback..................................................................... 381

Disputed Surcharge...............................................................................................382

Proper Use for Acquirer’s Second Presentment........................................................... 382

Invalid Chargeback............................................................................................... 383

Disputed Surcharge...............................................................................................383

Disputed Surcharge—Incorrect Pro-rated Calculation............................................ 383

Additional Remedies............................................................................................. 384

Arbitration Chargeback............................................................................................. 384

Arbitration Case Filing............................................................................................... 385

Additional Processing Notes.......................................................................................385

U.S. Region—U.S. Shared Deposits.................................................................................386

Returned Item (Reason Code 20)............................................................................... 386

Acquirer Adjustment.............................................................................................386

Issuer Chargeback.................................................................................................387

Empty Deposit Envelope (Reason Code 24)................................................................ 387

Acquirer Adjustment.............................................................................................387

Issuer Chargeback.................................................................................................387

Error in Addition (Reason Code 25)............................................................................387

Acquirer Adjustment.............................................................................................387

Issuer Chargeback.................................................................................................388

Error in Settlement (Reason Code 26)........................................................................ 388

Acquirer Adjustment.............................................................................................388

Issuer Chargeback.................................................................................................388

Customer Keyed Wrong Amount (Reason Code 27)...................................................388

Contents

Chargeback Guide • 13 December 2018

Acquirer Adjustment.............................................................................................388

Issuer Chargeback.................................................................................................389

Non-Cash Item Deposited (Reason Code 28)..............................................................389

Acquirer Adjustment.............................................................................................389

Issuer Chargeback.................................................................................................390

Foreign/Counterfeit Currency Deposited (Reason Code 29)........................................ 390

Acquirer Adjustment.............................................................................................390

Issuer Chargeback.................................................................................................390

Cardholder Disputed Amount (Reason Code 30)........................................................390

Issuer Chargeback.................................................................................................390

Acquirer Respresentment...................................................................................... 391

Arbitration Case Filing...........................................................................................391

Intra-U.S. Region and U.S. Territories—Defective/Not as Described (Reason Code 53)..... 391

Issuer Chargeback..................................................................................................... 391

General Use.......................................................................................................... 391

Counterfeit Goods................................................................................................ 393

Acquirer Representment (Second Presentment)..........................................................394

Arbitration Case Filing............................................................................................... 394

General Use.......................................................................................................... 394

Counterfeit Goods................................................................................................ 395

Appendix E: Lodging Merchant Services..................................................... 397

Guaranteed Reservations................................................................................................398

Advance Resort Deposit................................................................................................. 399

Appendix F: Transaction Identification Requirements.......................... 400

Transaction Date............................................................................................................ 401

Contactless Transactions.................................................................................................401

Contactless Transit Aggregated Transactions.............................................................. 403

Contactless-only Transactions.................................................................................... 405

Quick Payment Service Transactions................................................................................407

Payment Transactions.....................................................................................................408

Electronic Commerce Transactions..................................................................................409

Digital Secure Remote Payment Transactions.................................................................. 410

Digital Secure Remote Payment Transactions Containing Chip Data........................... 411

Digital Secure Remote Payment Transactions Containing UCAF Data..........................412

Partial Shipments or Recurring Payments Following Digital Secure Remote Payment

Transactions...............................................................................................................414

Mastercard Mobile Remote Payment Transactions...........................................................416

Mastercard Biometric Card Program Transactions........................................................... 417

Contents

Chargeback Guide • 13 December 2018

Appendix G: Forms................................................................................................. 418

Accessing Mastercard Connect.......................................................................................419

Referenced Forms......................................................................................................421

Notices...........................................................................................................................422

Contents

Chargeback Guide • 13 December 2018

Chapter 1 General Information

This chapter provides a high level overview of the single and dual message system chargeback

cycles as well as arbitration and compliance.

Single and Dual Message Systems................................................................................................. 21

Definitions.................................................................................................................................... 21

Chargeback Cycles and Arbitration Case Filing..............................................................................21

Overview of the Single and Dual Message System Chargeback Cycles and Arbitration Case

Filing........................................................................................................................................ 21

Compliance Case Filing................................................................................................................. 23

Reversals.......................................................................................................................................24

Rights and Obligations.................................................................................................................. 24

Hardship Variances........................................................................................................................24

Related Documentation................................................................................................................ 25

General Information

Chargeback Guide • 13 December 2018

Single and Dual Message Systems

The Single Message System (formerly known as the Mastercard

Debit Switch [MDS])

processes authorization, clearing, and settlement in a single message. Refer to the Single

Message System Specifications and the Single Message Transaction Manager User Guide for

detailed information.

The Dual Message System processes authorization messages through the Authorization

Platform and clearing/settlement messages through the Global Clearing Management System

(GCMS). GCMS uses messages in the Integrated Product Messages (IPM) format. Refer to the

Global Clearing Management System Reference Manual for detailed information on how to

process messages, currency conversion, and edits. Refer to the IPM Clearing Formats for

message formats and data requirements.

Definitions

The terms “Customer” and “Standards” as used in this guide have the meaning set forth in

the Definitions chapter of Mastercard Rules.

Chargeback Cycles and Arbitration Case Filing

The following table provides an overview of the chargeback cycles and arbitration case filing

for the Single and Dual Message Systems. Detailed information can be found in the Single

Message System Chargebacks, Dual Message System Chargebacks, and Arbitration Case Filing

chapters.

In the European Economic Area (EEA), the chargeback rules apply to all disputed transactions

regardless of the processor. Please refer to your chosen processor’s documentation for

processing instructions and for equivalent data elements to those referenced in this guide.

Overview of the Single and Dual Message System Chargeback Cycles and

Arbitration Case Filing

First

Presentment

The first presentment occurs when the acquirer submits transaction data through the

Single or Dual Message System to the issuer for posting to the cardholder’s account.

Single Message

In the Single Message System, this is

a Presentment/0210 message.

Dual Message

In the Dual Message System, this is a First

Presentment/1240 message.

General Information

Single and Dual Message Systems

Chargeback Guide • 13 December 2018

Chargeback

The issuer may initiate a chargeback when the circumstances of the transaction meet

the requirement of a chargeback reason code described in the Single Message System

Chargebacks or Dual Message System Chargebacks chapters.

A chargeback may be for the total transaction amount or a lesser amount.

Additionally, one clearing transaction may have multiple chargebacks for partial

amounts. The total amount being charged back must not exceed the total transaction

amount.

Upon reissuing a Mastercard, Debit Mastercard, or Maestro card with the same

primary account number (PAN) and a new expiration date, the issuer must include the

expiration date in all chargeback records.

Single Message

In the Single Message System, this is

an Advice Reason Code/0489

message.

Function codes are not used in the

Single Message System, rather the

issuer charges back either the full or

partial amount.

Dual Message

In the Dual Message System, this is a First

Chargeback/1442 message.

When the total transaction amount is being

charged back, DE 24 (Function Code) must

include a value of 450 (Full Amount).

When a partial amount is being charged back,

DE 24 must include a value of 453 (Partial

Amount).

Second

Presentment

An acquirer may process a second presentment when the acquirer:

• Believes the issuer’s chargeback did not fulfill the requirements of the chargeback

reason code

• Can provide information that addresses the original reason for the dispute

A second presentment must be for the total chargeback amount or a lesser amount.

Single Message

This is an Advice Reason Code/0491

message.

Function codes are not used in the

Single Message System, rather the

acquirer represents either the full or

partial amount.

Dual Message

This is a Second Presentment/1240 message.

When the total transaction amount is being

second presented, DE 24 (Function Code) must

include a value of 205 (Full Amount).

When a partial amount is being second

presented, DE 24 must include a value of 282

(Partial Amount).

General Information

Chargeback Cycles and Arbitration Case Filing

Chargeback Guide • 13 December 2018

Arbitration

Chargeback

An issuer may process an arbitration chargeback when the issuer:

• Believes the acquirer’s second presentment did not fulfill the requirements of the

chargeback reason code

• Can address the information provided by the acquirer

An arbitration chargeback must be for the total second presentment amount or a

lesser amount.

Single Message

The Single Message System does

not support an Arbitration

Chargeback.

Dual Message

In the Dual Message System, this is an

Arbitration Chargeback/1442 message.

Arbitration chargebacks are not supported for

Maestro and Cirrus transactions occurring on

the Dual Message System.

When the total transaction amount is being

charged back, DE 24 (Function Code) must

include a value of 451 (Full Amount).

When a partial amount is being charged back,

DE 24 must include a value of 454 (Partial

Amount).

Arbitration

Case Filing

After the chargeback cycles have been completed, a dispute may be escalated to an

arbitration case. An arbitration case is filed with Mastercard and Mastercard will

determine responsibility for the dispute.

An arbitration case filing must be for the total second presentment amount or a lesser

amount.

Single Message

In the Single Message System, the

issuer may file an arbitration case.

Dual Message

In the Dual Message System, the acquirer may

file an arbitration case.

Compliance Case Filing

A compliance case may be filed by either an issuer or an acquirer when:

• A message reason code doesn’t exist to address the dispute

• A rule has been violated

• A financial loss has been documented as a direct result of the rule violation

Refer to the Compliance Case Filing chapter for detailed information.

General Information

Compliance Case Filing

Chargeback Guide • 13 December 2018

Reversals

In the Single Message System (SMS), a chargeback and a second presentment may be

reversed as described in the Single Message Systems Chargebacks chapter.

In the Dual Message System (DMS), a first chargeback, second presentment, and arbitration

chargeback may be reversed as described in the Global Clearing Management System

Reference Manual.

Rights and Obligations

The following applies in addition to the rights and obligations described in the Standards:

• An issuer is limited to one chargeback per presented transaction amount within the time

frame applicable for the chargeback reason code. The transaction amount may be charged

back one time by the issuer, either as a full amount, a partial amount, or multiple partial

amounts not to exceed the original clearing message amount.

• An acquirer must not process a new first presentment for the same transaction after

receiving a chargeback with the exception of a “POI Currency Conversion” dispute under

the Dual Message System Point-of-Interaction Error chargeback (message reason code

4834).

The “POI Currency Conversion” exception is available when the chargeback is valid and the

acquirer accepts the chargeback. The acquirer may process a new First Presentment/1240

message with the correct transaction currency. The new presentment must be processed

within 30 calendar days of the Central Site Business Date of the first chargeback in order

for the acquirer to be protected from a “Late Presentment” chargeback.

• Under no circumstances should the issuer, acquirer, merchant, or cardholder retain funds,

goods, and/or services twice for the same transaction. For example, when an issuer has

billed a transaction to its cardholder’s account for payment and then chooses to exercise a

chargeback right, the issuer must credit the cardholder’s account for the amount of the

chargeback. An issuer must not allow a cardholder to be credited twice because of a

chargeback processed by the issuer and a refund processed by the merchant.

Hardship Variances

A hardship variance is considered when a natural disaster causes severe operational

difficulties. A hardship variance removes the GCMS time frame edits for all message reason

codes, arbitration case filings, and compliance case filings for a specific time period. Removing

the time frame edits means that GCMS will not reject a message solely because the message

was sent after the time frame for the cycle. All other requirements of the reason code,

arbitration case filing, and compliance case filing continue to apply. Refer to the Global

Clearing Management System Reference Manual and IPM Clearing Formats for additional

information.

General Information

Reversals

Chargeback Guide • 13 December 2018

Related Documentation

Chargeback Guide • 13 December 2018

Chapter 2 Dual Message System Chargebacks

This chapter details the procedures that Customers must follow for each individual message reason

code.

Overview...................................................................................................................................... 30

Authorization-related Chargeback ............................................................................................... 30

Chargeback..............................................................................................................................31

Required Authorization Not Obtained.................................................................................. 31

Expired Chargeback Protection Period..................................................................................34

Multiple Authorization Requests.......................................................................................... 35

CAT 3 Device....................................................................................................................... 36

Second Presentment.................................................................................................................39

Required Authorization Obtained.........................................................................................39

Expired Chargeback Protection Period..................................................................................40

Multiple Authorization Requests.......................................................................................... 41

One Authorization with Multiple Clearing Records...............................................................41

CAT 3 Device or In-Flight Transaction Occurring in Taiwan....................................................42

Credit Previously Issued........................................................................................................43

Additional Second Presentment Options.............................................................................. 43

Arbitration Chargeback............................................................................................................ 44

General Arbitration Chargeback.......................................................................................... 44

Acquirer Reference Data (ARD) Does Not Match or is Invalid................................................ 44

Additional Arbitration Chargeback Options..........................................................................45

Cardholder Dispute Chargeback .................................................................................................. 46

Chargeback..............................................................................................................................48

Goods or Services Were Either Not as Described or Defective............................................... 48

Goods or Services Not Provided........................................................................................... 49

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only...................... 53

Digital Goods Purchase of USD 25 or Less............................................................................55

Credit Not Processed............................................................................................................58

Counterfeit Goods...............................................................................................................59

Cardholder Dispute of a Recurring Transaction.....................................................................60

Issuer Dispute of a Recurring Transaction............................................................................. 61

Addendum Dispute..............................................................................................................63

“No-Show” Hotel Charge....................................................................................................64

Transaction Did Not Complete............................................................................................. 65

Timeshares.......................................................................................................................... 66

Dual Message System Chargebacks

Chargeback Guide • 13 December 2018

Credit Posted as a Purchase................................................................................................. 66

Second Presentment.................................................................................................................67

General Second Presentment............................................................................................... 67

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only...................... 68

Digital Goods Purchase of USD 25 or Less............................................................................69

Credit Previously Issued........................................................................................................69

Additional Second Presentment Options.............................................................................. 71

Arbitration Chargeback............................................................................................................ 72

General Arbitration Chargeback.......................................................................................... 72

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only...................... 74

Acquirer Reference Data (ARD) Does Not Match or is Invalid................................................ 75

Additional Arbitration Chargeback Options..........................................................................76

Fraud-related Chargebacks........................................................................................................... 76

No Cardholder Authorization................................................................................................... 77

Chargeback......................................................................................................................... 79

Second Presentment............................................................................................................ 82

Arbitration Chargeback....................................................................................................... 94

Fraudulent Processing of Transactions.......................................................................................98

First Chargeback................................................................................................................100

Second Presentment.......................................................................................................... 101

Arbitration Chargeback..................................................................................................... 106

Questionable Merchant Activity .............................................................................................108

First Chargeback................................................................................................................109

Second Presentment.......................................................................................................... 112

Arbitration Chargeback..................................................................................................... 115

Cardholder Does Not Recognize ............................................................................................ 115

First Chargeback................................................................................................................118

Second Presentment.......................................................................................................... 119

Arbitration Chargeback..................................................................................................... 124

Chip Liability Shift.................................................................................................................. 128

Chargeback....................................................................................................................... 133

Second Presentment.......................................................................................................... 134

Arbitration Chargeback..................................................................................................... 140

Chip Liability Shift—Lost/Stolen/Never Received Issue (NRI) Fraud ...........................................141

Chargeback....................................................................................................................... 147

Second Presentment.......................................................................................................... 149

Arbitration Chargeback..................................................................................................... 155

Point-of-Interaction Error............................................................................................................ 156

Chargeback............................................................................................................................157

Dual Message System Chargebacks

Chargeback Guide • 13 December 2018

Cardholder Debited More than Once for the Same Goods or Services................................ 157

Transaction Amount Differs................................................................................................158

ATM Disputes.................................................................................................................... 159

Charges for Loss, Theft, or Damages..................................................................................160

Late Presentment...............................................................................................................162

POI Currency Conversion (Dynamic Currency Conversion).................................................. 163

Merchant Credit Correcting Error Resulting in Cardholder Currency Exchange Loss............ 164

Improper Merchant Surcharge (Intra-European and Inter-European transactions only).........165

Unreasonable Amount—Intra-European Economic Area (EEA) Transactions Only................ 166

Second Presentment...............................................................................................................166

Cardholder Debited More than Once for the Same Goods or Services................................ 166

Cardholder Debited More than Once for the Same Goods or Services—PIN Transaction..... 167

Transaction Amount Differs................................................................................................168

ATM Disputes.................................................................................................................... 168

Charges for Loss, Theft, or Damages..................................................................................169

Late Presentment...............................................................................................................170

Late Presentment—Corrected Transaction Date..................................................................171

POI Currency Conversion (Dynamic Currency Conversion).................................................. 172

Unreasonable Amount (Intra-EEA Transactions Only).......................................................... 172

Credit Previously Issued......................................................................................................173

Improper Merchant Surcharge (Intra-European and Inter-European transactions only).........173

Additional Second Presentment Options............................................................................ 175

Arbitration Chargeback.......................................................................................................... 176

General Arbitration Chargeback........................................................................................ 176

Acquirer Reference Data (ARD) Does Not Match or is Invalid.............................................. 177

Additional Arbitration Chargeback Options........................................................................178

Cardholder Dispute—Not Elsewhere Classified (U.S. Region Only)............................................... 179

Installment Billing Dispute (Participating Countries Only)............................................................. 179

Domestic Chargeback Dispute (Europe Region Only)................................................................... 179

Requirements for Issuer’s First Chargeback, Acquirer’s Second Presentment, and Issuer’s

Arbitration Chargeback.......................................................................................................... 179

Improper Use of Message Reason Code 4999.........................................................................179

Arbitration Case Filing............................................................................................................ 179

Additional Processing Notes........................................................................................................ 179

Progressive Handling Fees........................................................................................................... 180

Progressive Handling Fee Overview.........................................................................................180

Issuer Use of Message Reason Code 7622......................................................................... 180

Acquirer Use of Message Reason Code 7623..................................................................... 180

Issuer Use of Message Reason Code 7624......................................................................... 181

Dual Message System Chargebacks

Chargeback Guide • 13 December 2018

Acquirer Use of Message Reason Code 7627—No MAC Provided...................................... 181

Acquirer Use of Message Reason Code 7627—Face-to-Face or CAT Level 2 Transaction..... 181

Required Fields in Fee Collection Messages........................................................................ 182

Intra-European and Inter-European Dispute Administration Fee (Mastercard POS)........................183

Chargeback Message Reason Codes........................................................................................... 184

First Chargeback: MTI 1442....................................................................................................184

Second Presentment: MTI 1240..............................................................................................184

Technical Return................................................................................................................ 184

Documentation Return...................................................................................................... 184

Substance Return...............................................................................................................184

Arbitration Chargeback: MTI 1442......................................................................................... 185

Technical Return................................................................................................................ 185

Documentation Return...................................................................................................... 185

Second Presentment/1240 IPM (Function Codes 205 or 282) Message Reason Code Usage....186

Arbitration Chargeback/1442 IPM (Function Codes 451 or 454) Message Reason Code

Usage.....................................................................................................................................190

Dual Message System Chargebacks

Chargeback Guide • 13 December 2018

Overview

Chargebacks fall into four categories:

• Authorization

• Cardholder disputes

• Fraud

• Point-of-Interaction Error

Authorization-related Chargeback

This section provides information in handling an authorization-related chargeback.

The issuer must attempt to honor the transaction before exercising this chargeback right.

An authorization-related chargeback may be submitted when one of the following occurred:

• Authorization was required but not obtained.

• The primary account number (PAN) does not exist.

• The authorization chargeback protection time period had expired for the presentment

(meaning 7 days for final or undefined authorizations and 30 days for preauthorizations)

and one of the following:

– For a transaction occurring at a merchant located in the Europe Region, the account

was permanently closed before the chargeback was processed

– For a transaction occurring at a merchant located in any other region, the issuer deemed

the account not to be in good standing (a “statused” account) before filing the

chargeback

• A card-not-present authorization was declined by the issuer and subsequently approved

through Stand-In processing or X-Code with an approval response as specified in the

Authorization Manual with the following exceptions:

– The issuer generated a decline response that included a value of 02 (Cannot approve at

this time, try again later) in DE 48 (Additional Data—Private Use), subelement 84

(Merchant Advice Code).

– The issuer generated an approval response after previously declining the transaction.

– The merchant can prove that the cardholder initiated the authorization request.

An authorization-related chargeback must not be submitted for any of the following:

• A properly identified Emergency Cash Advance transaction. A properly identified

Emergency Cash Advance transaction contains a value of “Emergency Cash Advance” in

DE 43 (Card Acceptor Name/Location) of the First Presentment/1240 message.

• A properly identified contactless transit aggregated transaction when all of the following

occurred:

– An Authorization Request/0100 message was generated for the transaction.

Dual Message System Chargebacks

Overview

Chargeback Guide • 13 December 2018

– The issuer approved the authorization request.

– The transaction amount was equal to or less than the contactless transit aggregated

transaction CVM limit amount as published in Appendix C, CVM Limit Amounts.

– There were 14 calendar days or less between the date of the first contactless tap and

the date the First Presentment/1240 message was generated.

• A magnetic stripe-read in-flight Transaction, including magnetic stripe mode contactless,

whether at an attended POS terminal or a Cardholder-Activated Terminal 4 device (CAT4),

occurring in Taiwan, under the floor limit of TWD 8,000 for Transactions dated before 1

April 2019. Floor limit Standards are provided in Chapter 5 of the Quick Reference Booklet.

Supporting Documents. Supporting Documents must be in English or accompanied by an

English translation unless both the issuer and the acquirer share a common language.

Supporting Documents must provide sufficient detail to enable all parties to understand the

nature of the dispute or rebuttal. Mastercard will determine whether the Supporting

Documents contain sufficient detail.

Supporting Documents must be provided using the MasterCom application.

Although Supporting Documents can be entered into MasterCom at any time before the next

cycle is processed, Supporting Documents must be entered into the MasterCom system within

eight calendar days of generating a chargeback or second presentment requiring Supporting

Documents to avoid liability for the disputed transaction solely for failing to provide

Supporting Documents (codes 2002 or 4901).

The cardholder email, cardholder letter, and/or cardholder message (including through a

password-protected website) must come directly from the cardholder or, in the case of a

commercial card, the corporate entity. A completed Dispute Resolution Form must be the

direct result of a conversation with the cardholder.

Chargeback

The tables in this section detail the conditions under which an authorization-related

chargeback may be processed.

Required Authorization Not Obtained

Chargeback Condition. Both of the following:

• Authorization was required

• Authorization was not properly obtained.

Time Frame. 90 calendar days

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Message Reason Code. One of the following:

• 4808 (Authorization-related Chargeback) for Dual Message System transactions

• 08 (Authorization-related Chargeback) for Debit Mastercard transactions processed on the Single

Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4807 (Warning Bulletin) and 4812 (Account Number Not on File) for Dual Message System

transactions

• 07 (Warning Bulletin) and 12 (Account Not on File) for Debit Mastercard transactions processed on

the Single Message System

Supporting Documents. None

DE 72 (Data Record). None

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Notes.

Multiple Authorizations Records. A transaction may have multiple authorization records.

Additionally, several airline ticket transactions may be combined into one authorization record.

Multiple Clearing Records. Multiple clearing records may have been or will be submitted in

connection with a single approved authorization.

10% Tolerance to Accommodate Currency Conversion Rates. This chargeback is not available for

transactions that were converted to a different currency and the cleared transaction amount exceeds

the authorized transaction amount by less than 10%. This tolerance allows for different currency

conversion rates that could have been applicable on the authorization and clearing dates.

15% Tolerance. The 15% tolerance does not apply to any transaction occurring on or after 14

October 2016.

20% Tolerance. The 20% tolerance for gratuities does not apply to the following types of

transactions occurring on or after 14 October 2016:

• Chip/PIN transactions

• Contactless transactions

• Card-not-present transactions (see below for a variation relating to U.S. region domestic restaurant

transactions)

• Transactions for which the authorization was not coded as a pre-authorization

A 20% tolerance for gratuities will continue to apply to any other transaction types.

20% Tolerance. U.S. Region Domestic Card-not-present Restaurant Transactions Occurring on or

after 13 October 2017. A 20% tolerance for gratuities will apply to card-not-present transactions

conducted on or after 13 October 2017 with a U.S. region-issued card at a U.S. region merchant and

identified with either of the following MCCs:

• MCC 5812 (Eating Places, Restaurants)

• MCC 5814 (Fast Food Restaurants)

20% Tolerances—Partial Approval. This tolerance does not apply when both of the following

occurred:

• The Authorization Request/0100 message contained a value of 1 (Merchant terminal supports

receipt of partial approvals) in DE 48 (Additional Data—Private Use), subelement 61 (POS Data,

Extended Condition Codes), subfield 1 (Partial Approval Terminal Support Indicator).

• The Authorization Response/0110 message contained a value of 10 (Partial Approval) in DE 39

(Response Code) and a partial approval amount in DE 6 (Amount, Cardholder Billing).

Contactless Transit Aggregated Transaction. When the transaction amount of a properly identified

contactless transit aggregated transaction exceeds the contactless transit aggregated transaction CVM

limit amount, the issuer may charge back only the difference between the transaction amount and the

contactless transit aggregated transaction CVM limit amount.

Automated Fuel Dispenser (MCC 5542). The issuer cannot charge back an automated fuel

dispenser transaction effected in the U.S. region with:

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

• A Mastercard Corporate Card

, Mastercard Corporate Executive Card

, Mastercard Corporate Fleet

Card

, or Mastercard Corporate Purchasing Card

™

for any amount less than or equal to USD 150,

if the transaction was identified in the authorization request with MCC 5542 (Fuel Dispenser,

Automated) and CAT 2, and authorized by the issuer for USD 1.

If the transaction amount exceeds USD 150, the issuer may charge back only the difference

between the transaction amount and USD 150.

• Any other Mastercard card for any amount less than or equal to USD 100, if the transaction was

identified in the authorization request with MCC 5542 (Fuel Dispenser, Automated) and CAT 2,

and authorized by the issuer for USD 1.

If the transaction amount exceeds USD 100, the issuer may charge back only the difference

between the transaction amount and USD 100.

Expired Chargeback Protection Period

Chargeback Condition. One of the following:

• The transaction occurred at a merchant located in the Europe region and the issuer permanently

closed the account before processing the chargeback.

• The transaction occurred at a merchant located in any other region and the issuer deems the

account not to be in good standing (a “statused” account) before processing the chargeback.

And one of the following:

• The authorization was identified as a preauthorization (DE 61 [Point-of-Service (POS) Data],

subfield 7 (POS Transaction Status) contains a value of 4 [Preauthorized request]) and the

transaction was presented more than 30 calendar days after the latest authorization approval date.

• The authorization was not identified as a preauthorization and the transaction was presented more

than seven calendar days after the authorization approval date.

The above time frames do not apply to properly identified acquirer-financed or merchant-financed

preauthorized installment billing payments or contactless transit aggregated or transit debt recovery

transactions.

Time Frame. 90 calendar days

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Message Reason Code. One of the following:

• 4808 for Dual Message System transactions

• 08 for Debit Mastercard transactions processed on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4807 (Warning Bulletin) and 4812 (Account Number Not on File) for Dual Message System

transactions

• 07 (Warning Bulletin) and 12 (Account Not on File) for Debit Mastercard transactions processed on

the Single Message System

Supporting Documents. None

DE 72 (Data Record). None

Notes. This chargeback is not available for the following transactions:

• Properly identified acquirer-financed or merchant-financed preauthorized installment payments.

• Properly identified Mastercard contactless transit aggregated or transit debt recovery transactions.

Multiple Authorization Requests

Chargeback Condition. A Card-Not-Present authorization was declined by the issuer and

subsequently approved in Stand-In or X-Code.

Time Frame. 90 calendar days

Message Reason Code. One of the following:

• 4808 for Dual Message System transactions

• 08 for Debit Mastercard transactions processed on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4807 (Warning Bulletin) and 4812 (Account Number Not on File) for Dual Message System

transactions

• 07 (Warning Bulletin) and 12 (Account Not on File) for Debit Mastercard transactions processed on

the Single Message System

Supporting Documents. None

DE 72 (Data Record). Optionally: MULTIPLE AUTH REQUESTS

Notes. None

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

CAT 3 Device

Chargeback Condition. One of the following:

1. The transaction was not identified with one of the following MCCs:

– 4784—Bridges and Road Fees, Tolls

– 5499—Miscellaneous Food Stores—Convenience Stores, Markets, Specialty Stores (solely for

Contactless-only Transactions)

– 7523—Automobile Parking Lots and Garages

– 7542—Car Washes

2. The transaction was identified with one of the above MCCs and the transaction amount was

greater than one of the following:

a. The CVM Limit as published in Appendix C (CVM Limit Amounts) for contactless-only CAT 3

devices

b. HKD 500 for domestic Hong Kong CAT 3 transactions identified with MCC 7523 (Automobile

Parking Lots and Garages)

c. EUR 50 for CAT 3 transaction occurring in Europe

d. USD 40, or its local currency equivalent, for all other CAT 3 transactions

3. Effective for transactions dated on or after 13 October 2017, the transaction was a magnetic

stripe transaction identified with one of the MCCs listed in bullet 1.

4. The PAN was listed in the applicable Local Stoplist or Electronic Warning Bulletin File on the date

of the transaction.

5. The PAN was expired or not yet valid

6. The transaction occurred in the Europe region with a card that had a service code of X2X (Positive

Online Authorization Required).

Time Frame. 90 calendar days

Message Reason Code. One of the following:

• 4808 for Dual Message System transactions

• 08 for Debit Mastercard transactions processed on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4807 (Warning Bulletin) and 4812 (Account Number Not on File) for Dual Message System

transactions

• 07 (Warning Bulletin) and 12 (Account Not on File) for Debit Mastercard transactions processed on

the Single Message System

Supporting Documents. For batched chargebacks: A list of the ARDs and the amount of each

transaction.

For all other chargebacks: None

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

DE 72 (Data Record). For Local Stoplist or Electronic Warning Bulletin File, one of the following:

• R X

• R X S NN

For batched chargebacks: CAT 3 MULTIPLE TRANS NNN

For Europe region cards with X2X service code: SC X2X

For all others one of the following:

• CAT 3

• CAT LEVEL 3

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Notes

Batching CAT 3 Device Transactions

Multiple disputed transactions may be combined into one chargeback, this is called batching. The

batching option is only available when the PAN, merchant name and acquirer are the same for all

transactions within the batch.

Each individual disputed transaction included in the batch must be within the chargeback time frame.

The chargeback must be processed using an ARD from one of the disputed transaction included the

batch.

The chargeback must be processed for the total amount of all the disputed transactions included in

the batch.

Each transaction in the batch must be less than or equal to USD 25 or the local currency equivalent.

The total amount of all transactions in the batch must not exceed USD 250 or the local currency

equivalent.

For CAT 3 MULTIPLE TRANS NNN, replace NNN with the number of transactions in the batch.

Local Stoplist or Electronic Warning Bulletin File

For R X, replace X with the one character Electronic Warning Bulletin Region code in which the PAN is

listed.

For S NN, replace NN with the two character subregional code in which the PAN was listed.

• Unknown Transaction Date. When the issuer cannot determine the transaction date from DE 12

(Date and Time, Local Transaction), the issuer may assume the transaction date is within 15

calendar days before the Central Site Business Date.

• Unknown Face-to-Face Merchant Location. When the issuer cannot determine the merchant

location from DE 43 (Merchant Name/Location), subfield 5 (State, Province, or Region Code), the

issuer may reference any region of the Electronic Warning Bulletin File that listed the PAN on the

date of the transaction in DE 72.

• Unknown Non-Face-to-Face and Non-Fixed Merchant Location. For non–face-to-face or non-

fixed merchant location transactions, the issuer may reference any regional Electronic Warning

Bulletin File that listed the PAN on the date of the transaction in DE 72.

• Subregional. An issuer must use both the merchant location (DE 43) and the merchant category

code (DE 26 [Merchant Business Code (MCC)]) to determine whether the PAN was listed in the

applicable subregional Electronic Warning Bulletin File.

For information on the Local Stoplist or Electronic Warning Bulletin File refer to the Account

Management System User Manual.

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Second Presentment

The tables in this section detail the conditions under which a second presentment in response

to an authorization-related chargeback may be processed.

PAN Mismatch. The Primary Account Number (PAN) in chargeback supporting

documentation may differ from the PAN included by the acquirer in the clearing record. As a

result, a difference in PANs must not be the sole reason for an acquirer’s second presentment.

Required Authorization Obtained

Second Presentment Condition. The transaction was authorized and presented within the

applicable Chargeback Protection Period.

Time Frame. Within 45 calendar days of the chargeback settlement date

IPM Second Presentment Message Reason Code. One of the following:

• 2008 (Issuer Authorized Transaction) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. None

DE 72 (Data Record)

When online authorized: AUTHORIZATION DATE MMDDYY NNNNNN

When offline EMV authorized and DE 55 not previously provided in the First Presentment/1240

message: DE 55 PROVIDED

Notes.

Replace MMDDYY with the date the issuer authorized the transaction.

Replace NNNNNN with the actual authorization response code provided by the issuer, its agent or

Mastercard On-Behalf for the cleared transaction.

Offline Approved EMV Transaction

When DE 55 was provided in the First Presentment/1240 message respond with IPM Second

Presentment Message Reason Code 2713-Invalid Chargeback.

When DE 55 was not provided in the First Presentment/1240-200 message, DE 55 must be provided in

the Second Presentment Presentment/1240-205 message.

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Expired Chargeback Protection Period

Second Presentment Condition. One of the following:

1. The transaction was properly identified in authorization as a preauthorization (DE 61, subfield 7 =

4), the transaction was presented within 30 calendar days of the preauthorization approval date,

and was not reversed.

2. The transaction was not properly identified in authorization as a preauthorization, the transaction

was presented within seven calendar days of the authorization approval date, and was not

reversed.

3. The transaction was properly identified in authorization as acquirer-financed or merchant-financed

installment payment.

4. The transaction was properly identified in authorization as a Mastercard Contactless transit

aggregated or transit debt recovery transaction.

5. The transaction occurred at:

a. A Europe region merchant location and the issuer has not permanently closed the account

b. A merchant located in any other region and the issuer has not “statused” the account (that

is, the issuer considered the account to be in good standing at the time of the chargeback)

Time Frame. Within 45 calendar days of the chargeback settlement date.

IPM Second Presentment Message Reason Code. One of the following:

• 2713 (Invalid Chargeback) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. None

DE 72 (Data Record). One of the following corresponding to the Second Presentment Condition:

1. PREAUTH MMDDYY

2. AUTH MMDDYY

3. INSTALLMENT

4. TRANSIT

5. Either:

a. ACCOUNT NOT CLOSED

b. ACCOUNT NOT STATUSED

Notes. When the transaction authorization was identified as a preauthorization, use PREAUTH.

When the transaction authorization was not identified as a preauthorization, use AUTH.

Replace MMDDYY with the approval date of the disputed transaction.

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Multiple Authorization Requests

Second Presentment Condition.One of the following:

1. The issuer-generated decline response included a value of 02 (Cannot approve at this time, try

again later) in DE 48 (Additional Data—Private Use), subelement 84 (Merchant Advice Code).

2. The issuer generated an approval response after previously declining the transaction.

3. For a card-not-present transaction, the merchant can prove that the cardholder resubmitted the

online order.

Time Frame.Within 45 calendar days of the chargeback settlement date

IPM Second Presentment Message Reason Code. One of the following:

• 2008 (Issuer Authorized Transaction) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. One of the following corresponding to the Second Presentment

Condition:

1. None

2. None

3. Documentation supporting the merchant’s claim.

DE 72 (Data Record). None

Notes. None

One Authorization with Multiple Clearing Records

Second Presentment Condition. Both of the following:

• One of the following indicators was present in DE 25 (Message Reason Code) of the First

Presentment/1240 message

– 1403 (Previously approved authorization—partial amount, multi-clearing)

– 1404 (Previously approved authorization—partial amount, final clearing)

• The total of all clearing records submitted in connection with the approved authorization did not

exceed the approved amount

Time Frame. Within 45 calendar days of the chargeback settlement date

IPM Second Presentment Message Reason Code. One of the following:

• 2713 (Invalid Chargeback) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. None

DE 72 (Data Record). One of the following, as applicable:

• PREAUTH MMDDYY 1403

• AUTH MMDDYY 1403

• PREAUTH MMDDYY 1404

• AUTH MMDDYY 1404

Notes.

When the transaction authorization was identified as a preauthorization, use PREAUTH.

When the transaction authorization was not identified as a preauthorization, use AUTH.

Replace MMDDYY with the approval date of the disputed transaction.

CAT 3 Device or In-Flight Transaction Occurring in Taiwan

Second Presentment Condition. The PAN was not listed in the applicable Local Stoplist or Electronic

Warning Bulletin File on the date of the transaction and one of the following:

• The transaction was properly identified in clearing as a CAT 3 terminal and the transaction amount

was equal to or less than the applicable maximum transaction amount.

• The Transaction was properly identified in clearing as an In-Flight Transaction (whether at an

attended POS terminal or a Cardholder-Activated Terminal [CAT] 4 device) occurring in Taiwan and

the Transaction amount is equal to or less than TWD 8,000

Time Frame. Within 45 calendar days of the chargeback settlement date

IPM Second Presentment Message Reason Code. One of the following:

• 2707 (No authorization request required or attempted) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. None

DE 72 (Data Record). Optionally: CAT 3 or In-Flight corresponding to the Second Presentment

Condition

Notes

Effective for transactions dated on or after 13 October 2017, this second presentment is not available

for any magnetic stripe transaction identified as occurring at a CAT 3 device.

Effective for Transactions occurring in Taiwan dated on or after 1 April 2019, this second presentment

is not available for any magnetic stripe Transaction identified as an In-Flight Transaction (whether at an

attended POS terminal or a Cardholder-Activated Terminal [CAT] 4 device).

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Credit Previously Issued

Second Presentment Condition. The merchant issued a credit to the cardholder’s account.

Time Frame. Within 45 calendar days of the chargeback settlement date

IPM Second Presentment Message Reason Code. One of the following:

• 2011 (Credit Previously Issued) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. None

DE 72 (Data Record). MMDDYY NNNNNNNNNNNNNNNNNNNNNNN

Notes

Replace MMDDYY with the date of the credit transaction.

Optionally, replace NNNNNNNNNNNNNNNNNNNNNNN with the Acquirer Reference Data (ARD) of

the credit transaction.

Additional Second Presentment Options

IPM Second Presentment Message Reason Codes and Second Presentment Conditions. One of

the following:

• One of the following for Dual Message System transactions:

– 2001—Invalid Acquirer Reference Data; Documentation was Received or was Not Required

The combination of Primary Account Number and Acquirer Reference Data contained in the

chargeback record does not match the information contained in the first presentment record.

– 2004—Invalid Acquirer Reference Data on Chargeback; Documentation was Received

The combination of Primary Account Number and Acquirer Reference Data contained in the

chargeback record does not match the information contained in the first presentment record.

– 2701—Duplicate Chargeback

The issuer processed a first chargeback for the same transaction more than once.

Mastercard recommends that the acquirer provides the processing date and chargeback

reference number of the original chargeback with its second presentment.

– 2702—Past Chargeback Time Limit

The issuer’s first chargeback is processed past the time frame specified for the chargeback.

– 2713—Invalid Chargeback

The first chargeback does not meet the prerequisites for the message reason code.

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. None

DE 72 (Data Record). None

Notes. Not available for ATM transactions.

Arbitration Chargeback

The tables in this section detail the conditions under which an arbitration chargeback in

response to an acquirer’s second presentment may be processed.

General Arbitration Chargeback

Arbitration Chargeback Condition. The issuer continues to dispute the transaction.

When the merchant’s explanation remedied the original chargeback condition but that information

allowed the issuer to determine a new chargeback condition exists, then the issuer may continue the

chargeback by processing the arbitration chargeback using the requirements of the new chargeback

condition.

Time Frame. Within 45 calendar days of the second presentment settlement date

IPM Arbitration Chargeback Message Reason Code. One of the following:

• 4808 Authorization-related Chargeback

• 48XX

Supporting Documents. None

DE 72 (Data Record). None

Notes. Replace 48XX with the valid chargeback message reason code.

Acquirer Reference Data (ARD) Does Not Match or is Invalid

Arbitration Chargeback Condition. One of the following:

1. When the issuer’s first chargeback didn’t include the ARD present in the first presentment, the

issuer must provide the correct ARD.

2. When the issuer’s first chargeback included the ARD present in the first chargeback, the issuer

must provide a copy of the first presentment as Supporting Documentation.

Time Frame. Within 45 calendar days of the second presentment settlement date

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

IPM Arbitration Chargeback Message Reason Code. One of the following corresponding to the

Arbitration Chargeback Condition:

1. When the second presentment used message reason code 2001: 4905—Invalid Acquirer

Reference Data; Documentation was Not Received or Not Required

2. When the second presentment used message reason code 2004: 4908—Invalid Acquirer

Reference Data; Documentation Received

Supporting Documents. One of the following corresponding to the Arbitration Chargeback

Condition:

1. None

2. A copy of the first presentment showing the ARD

DE 72 (Data Record). CORRECT REFERENCE NUMBER SUPPLIED

Notes. None

Additional Arbitration Chargeback Options

IPM Arbitration Chargeback Message Reason Codes and Arbitration Chargeback Conditions.

One of the following:

1. 4901—Required Documentation Not Received to Support Second Presentment

Required supporting documentation was not received.

An issuer must wait a minimum of eight calendar days from the second presentment before using

this message reason code.

An issuer can generate an arbitration chargeback with message reason code 4901 nine calendar

days from the second presentment and before the acquirer sends the supporting documentation.

The Mastercard Dispute Resolution staff will find the acquirer responsible when the acquirer files

an arbitration case.

The issuer must accept supporting documentation as long as the issuer has not processed an

arbitration chargeback.

2. 4902—Documentation Received was Illegible

Supporting documentation is illegible. The issuer’s arbitration chargeback will be considered

invalid should the Mastercard Dispute Resolution staff determine that the supporting

documentation is legible during an arbitration case filing.

3. 4903—Scanning error—Unrelated Documents or Partial Scan

Supporting documentation does not correspond to the transaction being charged back (for

example, the documentation concerns a different transaction) or is incomplete.

Time Frame. Within 45 calendar days of the second presentment settlement date

Dual Message System Chargebacks

Authorization-related Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. None

DE 72 (Data Record). None

Notes. None

Cardholder Dispute Chargeback

This section provides information in handling a cardholder dispute chargeback. Use of the

cardholder dispute chargeback requires that the cardholder engaged in the transaction.

A Cardholder Dispute chargeback may be submitted when the cardholder contacted the

issuer alleging one of the following:

• Goods or services were either not as described or defective, including shipped merchandise

was received damaged or not suitable for its intended purpose as well as the merchant

didn’t honor the terms and conditions of a contract

• Goods or services were not provided

• Digital goods were purchased totaling USD 25 or less and did not have adequate purchase

controls

• Credit not processed

• Counterfeit goods alleged to be authentic were purchased

• Recurring transaction canceled prior to billing

• Addendum dispute or “no-show” hotel charge was billed

• Purchase transaction did not complete

• Timeshare agreement or similar service provision was canceled within Mastercard time

frame, regardless of the contractual terms

• Credit posted as a purchase

A Cardholder Dispute chargeback must not be submitted for any of the following:

• Payment Transactions and MoneySend Payment Transactions

• The cash back amount or any portion of the cash back amount.

• Mastercard Commercial Payments Account transaction. A Mastercard Commercial

Payments Account transaction occurs when PDS 0002 (GCMS Product Identifier) was MAP

(Mastercard Commercial Payments Account) in the First Presentment/1240 message.

• Failure to credit shipping or handling charges for buyer’s remorse cancellations or returns.

• A retail sale processed as a cash disbursement. Customers must accept these transactions

and collect the difference in the interchange fee and cash directly from the acquirer. When

an issuer’s attempt to collect the difference directly from the acquirer proves unsuccessful,

the issuer should contact Global Customer Service.

Chargebacks are available to the issuer for transactions in which any value is purchased for

gambling, investment or similar purposes. However, issuers have no chargeback rights related

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

to the use of these chips or value, unspent chips, or withdrawal of such value, or on any

winnings, gains or losses resulting from the use of such chips or value.

Staged Digital Wallet. A transaction to fund a Staged Digital Wallet may be charged back if

the funds did not appear in the Staged Digital Wallet. Chargeback rights are not available for

any subsequent purchase of goods or service from a Staged Digital Wallet. Staged Digital

Wallet transactions are identified with a wallet identifier in DE 48 (Additional Data—Private

Use), subelement 26 (Wallet Program Data) Subfield 1—Wallet Identifier and in PDS 0207—

Wallet Identifier of the First Presentment/1240 Message.

Supporting Documents. Supporting Documents must be in English or accompanied by an

English translation unless both the issuer and the acquirer share a common language.

Supporting Documents must provide sufficient detail to enable all parties to understand the

nature of the dispute or rebuttal. Mastercard will determine whether the Supporting

Documents contain sufficient detail.

Supporting Documents must be provided using the MasterCom application.

Although Supporting Documents can be entered into MasterCom at any time before the next

cycle is processed, Supporting Documents must be entered into the MasterCom system within

eight calendar days of generating a chargeback or second presentment requiring Supporting

Documents to avoid liability for the disputed transaction solely for failing to provide

Supporting Documents (codes 2002 or 4901).

The cardholder email, cardholder letter, and/or cardholder message (including through a

password-protected website) must come directly from the cardholder or, in the case of a

commercial card, the corporate entity. A completed Dispute Resolution Form must be the

direct result of a conversation with the cardholder.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Chargeback

The tables in this section detail the conditions under which a Cardholder Dispute chargeback

may be processed.

Goods or Services Were Either Not as Described or Defective

Chargeback Condition. The cardholder contacted the issuer claiming all of the following:

• The cardholder engaged in the transaction

• The cardholder contacted the merchant, or attempted to contact the merchant, to resolve the

dispute

Merchant contact is optional when the cardholder is a corporate entity with a contractual

relationship with the merchant and the transaction is for an amount in excess of what is specified

in the contract. In such event the chargeback may be only for the amount of the excessive charge.

• The merchant refused to adjust the price, repair or replace the goods or other things of value, or

issue a credit

• For disputes involving goods: The cardholder returned the goods or informed the merchant the

goods were available for pickup

And one of the following:

• When delivered from the merchant, the goods arrived broken or could not be used for the

intended purpose.

• Goods and services did not conform to their description. Examples include, but are not limited to:

– The cardholder claims that the quality or workmanship of the product is not as described.

– The cardholder claims that the specified color, size, or quantity is not as described.

• The merchant did not honor the terms and conditions of the contract with the cardholder

including, but not limited to, 100 percent money back guarantee, written promises, or return

policy.

Time Frame. One of the following:

• 120 days from when the services ceased with a maximum of 540 calendar days from the

transaction settlement date for issues of interruption of ongoing services

• Between 15 and 120 calendar dates from the transaction settlement date

• Between 15 and 120 calendar dates from the delivery/cancellation date of the goods or services.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. Cardholder email, letter, message or completed Dispute Resolution Form—

Cardholder Dispute Chargeback (Form 1221) describing the cardholder’s complaint in sufficient detail

to enable all parties to understand the dispute.

When the cardholder is a corporate entity with a contractual relationship with the merchant and the

transaction is for an amount in excess of what is specified in the contract, the contract must be

provided when the merchant wasn’t contacted in an effort to resolve the dispute.

Optionally, documentation from an expert or professional that supports the cardholder’s dispute about

the level of quality or misrepresentation.

Optionally, documentation that supports the cardholder’s dispute including, but not limited to, the

original receipt, invoice, work order, brochure, contract, or appraisal.

DE 72 (Data Record). None

Notes. This chargeback is not available when proper disclosure of the conditions of the goods is made

at the time of the sale, such as when goods are sold in “as is” condition.

Goods or Services Not Provided

Chargeback Condition. One of the following:

• The cardholder contacted the issuer claiming both of the following:

– The cardholder engaged in the transaction.

– The purchased goods or services were not received.

• Travel services arranged through an online travel agency or tour operator were not received and

the travel agency or tour operator is no longer in business.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Time Frame.

• In cases involving delayed delivery of goods or services and the delivery or performance date was

not specified by the merchant: the issuer must wait 30 calendar days from the transaction date

before submitting a chargeback and not to exceed 120 calendar days from the transaction

settlement date.

However, the issuer may charge back the transaction immediately (and not wait the 30 calendar

days) upon learning the merchant will not provide the goods or services because, for example, for

the merchant is no longer in business.

• In cases involving delayed delivery of goods or services and the delivery or performance date was

specified by the merchant and the latest anticipated delivery or performance date was specified by

the merchant has passed: within 120 calendar days of the latest anticipated delivery or

performance date specified by the merchant.

However, the issuer may charge back the transaction immediately (and not wait until the latest

anticipated delivery or performance date has passed) upon learning the merchant will not provide

the goods or services because, for example, for the merchant is no longer in business.

• In cases involving interruption of ongoing services, within 120 calendar days of the date the

cardholder becomes aware that the service ceased. A chargeback must not be processed after 540

calendar days from the Central Site Business Date of the first presentment.

• In cases involving the purchase of a merchant-branded prepaid gift card without an expiration date

printed on the card and that merchant subsequently goes out of business, 540 calendar days from

the Central Site Business Date of the first presentment.

• In cases involving the purchase of a merchant-branded prepaid gift card with an expiration date

printed on the card and that merchant subsequently goes out of business, 120 calendar days from

the expiration date printed on the card.

• In all other cases: 120 calendar days from the transaction settlement date.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4855 (Goods or Services Not Provided) for Dual Message System transactions

• 55 (Non-receipt of Merchandise) for Debit Mastercard transactions processed on the Single

Message System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. Cardholder email, letter, message or completed Dispute Resolution Form—

Cardholder Dispute Chargeback (Form 1221) must include both of the following:

• A description of the cardholder’s complaint in sufficient detail to enable all parties to understand

the dispute

• A reasonably specific description of the goods/services purchased

For disputes involving a transaction performed by an online travel agency or tour operator that is no

longer in business at the time of the chargeback: an email, letter, or completed Dispute Resolution

Form—Cardholder Dispute Chargeback (Form 1221) provided by the individual or corporate entity

requesting the travel arrangements from the online travel agency or tour operator that includes all of

the following:

• A description of the complaint in sufficient detail to enable all parties to understand the dispute

• A reasonably specific description of the goods/services purchased

DE 72 (Data Record). None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Notes

This chargeback applies when the cardholder receives an empty box or a box containing worthless

items, such as a brick or a stack of paper.

Interruption of ongoing services

The issuer must only charge back an amount representing the services not received by the cardholder.

When an end date was not defined, then the issuer must calculate the prorated amount based upon

18 months.

For example, the cardholder purchased a lifetime membership for USD 1,000. The merchant goes out

of business after three months. The amount to be charged back is USD 833 (USD 1,000 divided by 18

months = USD 55 per month. 18 months minus 3 months = 15. USD 55 * 15 = USD 833.)

This chargeback does not apply when:

• The cardholder has taken possession of the merchandise from the merchant and subsequently

makes arrangements to have the merchandise shipped by a third party.

• The goods are being held in customs for unpaid duty or customs fees. The cardholder is obligated

to pay the appropriate fees.

• The merchant delivered the merchandise and the cardholder refused to accept delivery.

• The cardholder signed a waiver absolving the merchant from responsibility when the merchandise

is not received.

For example: A cardholder purchases vases and arranges with the merchant to have the vases

shipped to the United States. At the time of purchase, the cardholder signs a waiver form that

states: “PROOF OF DISPATCH OF THE MERCHANDISE WILL BIND THE CARDHOLDER.” The vases

never arrive, and the cardholder contacts the merchant. The merchant provides documentation to

show that the merchandise was shipped. By signing the waiver, the cardholder absolved the

merchant of liability for merchandise that the cardholder did not receive.

• The cardholder declined insurance.

For example: The merchant provides the cardholder with an opportunity to purchase insurance on

the merchandise to be delivered. Normally, such insurance stipulates that the cardholder must

initiate claims that limit the merchant responsibility to the presenting documentation that verifies

shipment or dispatch. The merchant should provide a signed waiver of liability obtained from the

cardholder when the cardholder declined to purchase insurance, along with documentation that

shows that the merchant shipped the merchandise.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only

Chargeback Condition.

For Intra-EEA and domestic European Transactions, when the cardholder contacted the issuer claiming

a travel service has not, or will not, be provided, and when the merchant is seeking protection from

creditors, insolvent, bankrupt or in liquidation, at least one of the following conditions must be met:

1. The travel service was covered by a bonding authority or similar scheme according to local law,

and one of the following:

– The cardholder (or traveler) requested reimbursement from the bonding authority or similar

scheme and did not receive it, or the claim was declined.

– For Swedish Domestic Transactions: no additional requirement. The cardholder (or traveler) is

not obligated to request reimbursement from a bonding authority or similar scheme prior to

the issuer raising a chargeback. The cardholder (or traveler) does not need to request

reimbursement from the bonding authority or similar scheme if the merchant, bonding

authority or similar scheme publicly states that the bond is insufficient prior to the chargeback.

2. The travel service was not covered by a bonding authority or similar scheme according to local

law, or neither the issuer nor the cardholder after reasonable effort can determine whether the

travel service was covered by a bonding authority or similar scheme according to local law.

Time Frame. One of the following:

1. Maximum 150 calendar days from the latest expected service date, whether the bonding

authority or similar scheme responded or not. The issuer must wait at least 30 calendar days from

the date the request was sent prior to processing a chargeback, unless a negative response was

received, in which case, the chargeback may be processed upon receipt of the negative reply.

The following exceptions apply:

– For German Domestic Transactions: Maximum 240 calendar days from the latest expected

service date, whether the bonding authority or similar scheme responded or not. The issuer

must wait at least 60 calendar days from the date the request was sent prior to processing a

chargeback, unless a negative response was received, in which case, the chargeback may be

processed upon receipt of the negative reply.

– For Polish Domestic Transactions: Maximum 540 calendar days from the Central Site Business

Date, whether the bonding authority or similar scheme responded or not. The issuer must wait

at least 60 calendar days from the date the request was sent prior to processing a chargeback,

unless a negative response was received, in which case, the chargeback may be processed

upon receipt of the negative reply.

– For Swedish Domestic Transactions: Maximum 120 calendar days from the latest expected

service date.

2. Maximum 120 calendar days after from the expected service date.

In all cases, the issuer does not have to wait for the latest expected service date before processing

the chargeback. A chargeback may be processed immediately upon learning the travel services

will not be provided to the cardholder (or traveler). The issuer is still obliged to meet all other

applicable chargeback requirements, such as a request for reimbursement from the bonding

authority or similar scheme.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Message Reason Code.

4853 (Cardholder Dispute—Defective/Not as Described) for Dual Message System transactions

The following message reason codes may continue to be used, however, it will eventually be replaced

by 4853:

• 4855 (Goods or Services Not Provided) for Dual Message System transactions

• 4859 (German Domestic Rule - Card Acceptor Unwilling or Unable to Render Services) for Dual

Message System transactions

Supporting Documents.

Cardholder email, letter, message or completed Dispute Resolution Form—Cardholder Dispute

Chargeback (Form 1221) must include all of the following:

• A description of the cardholder’s complaint in sufficient detail to enable all parties to understand

the dispute.

• A reasonably specific description of the travel services purchased. For example, for flights: relevant

airlines, flight numbers, origin/destination details, dates/times, passenger names, ticket/

confirmation numbers, and so on.

• If Chargeback Condition 1 is applicable (except Swedish Domestic Transactions): evidence of the

bonding authority or similar scheme’s response to the cardholder’s (or traveler’s) claim, or proof of

bond insufficiency. If the cardholder (or traveler) requested reimbursement and did not receive a

response, then a copy of the request for reimbursement. A detailed cardholder (or traveler)

explanation is permitted if such documentation is not available.

DE 72 (Data Record). None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Notes.

When the transaction is neither Intra-EEA nor domestic European, the applicable global rules apply,

namely Cardholder Dispute - Services Not Provided (reason code 4853). Bonding authority

requirements do not apply to such chargebacks.

If partial travel services have already been provided, the chargeback amount should be prorated to

reflect only the travel services not provided. If the cardholder (or traveler) has received partial

reimbursement from a bonding authority or similar scheme, the chargeback should also be prorated

to reflect the reimbursement.

If the acquirer provides specific evidence of bond coverage in a second presentment, the issuer must

instruct the cardholder (or traveler) to request reimbursement prior to an arbitration chargeback. The

arbitration chargeback is permitted if the reimbursement claim is declined or there is no

reimbursement after 30 calendar days from the date the request was sent. The reimbursement request

does not extend the arbitration chargeback timeframe, so the issuer should make a good-faith effort

to determine bond coverage prior to the initial chargeback.

For the avoidance of doubt, Mastercard does not consider the following the equivalent of a bonding

authority or similar scheme: 1) reimbursement that an issuer is legally required to provide to their

cardholder, 2) a cardholder’s (or traveler’s) personal or corporate travel insurance policy, and/or 3)

legally required compensation already paid or due to the cardholder (or traveler) by the merchant that

is separate from the purchase price. This list is not exhaustive.

If the travel service was paid for by a travel agency or tour operator as the cardholder, a cardholder (or

traveler) request for reimbursement from a bonding authority or similar scheme is still required if a

bond exists.

Digital Goods Purchase of USD 25 or Less

Digital goods are goods that are stored, delivered, and used in electronic format, such as, by

way of example but not limitation, books, newspapers, magazines, music, games, game

pieces, and software (excludes gift cards).

The delivery of digital goods purchased in a transaction may occur on a one-time or

subscription basis.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Chargeback Condition. The cardholder contacted the issuer alleging both of the following:

• Digital goods were purchased in an e-commerce transaction that was less than or equal to USD 25

(or the local currency equivalent)

• The merchant did not offer the cardholder purchase control settings.

In addition, all of the following:

• The cardholder's account is not closed

• The cardholder's account is in good standing with no associated fraudulent transactions

• The issuer must determine, based on a challenge of the cardholder, that prior to the date(s) of the

disputed transaction(s), the cardholder had provided card information to the merchant in order to

establish an account that could be used for future digital goods purchases, but the merchant did

not offer or establish the following minimum purchase controls in connection with the use of that

account:

– The option, enabled as a default setting, for the cardholder to disable all digital goods

purchases;

– The time period during which a digital goods purchase can be made on the cardholder’s

account with the merchant (the “account open” period) must not exceed 15 minutes from the

time at which the cardholder enters account authentication credentials; and

– Allowing the cardholder to confirm or to cancel the clearly displayed total transaction amount

of each pending digital goods purchase before completion of the transaction.

The issuer is advised to ask the following questions when challenging the cardholder and to educate

the cardholder on the use of purchase control settings:

1. Was the cardholder given the option to disable all digital goods purchases on the account?

2. Did the cardholder agree (such as by checking a box) to permit digital goods purchases to be

made without the entry of a password or other form of authentication?

3. When the cardholder was required to enter authentication credentials to use the account, was the

cardholder prompted to re-enter the credentials after a period of inactivity? When known, did

that period exceed 15 minutes?

4. Did the merchant site afford the cardholder the option to confirm or to cancel each purchase?

5. Did the cardholder receive notification (such as via email, text, or other means) promptly after

each purchase was completed?

Time Frame

Within 120 calendar days of the transaction settlement date

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4841 (Canceled Recurring or Digital Goods Transactions) for Dual Message System transactions

• 41 (Canceled Recurring Transaction) for Debit Mastercard transactions processed on the Single

Message System

Supporting Documents. Cardholder email, letter, message or completed Dispute Resolution Form—

Cardholder Dispute Chargeback (Form 1221) describing the cardholder’s purchase control complaint in

sufficient detail to enable all parties to understand the dispute.

In addition, for batched chargebacks: A list of the ARDs and the amount of each disputed transaction.

DE 72 (Data Record). DIGITAL GOODS.

For batched chargebacks: DIGITAL GOODS NNN

Notes. Replace NNN with the number of items being charged back.

This chargeback is not available for fraud disputes.

Batching Digital Goods Transactions

Multiple disputed transactions may be combined into one chargeback message, this is called batching.

The batching option is only available when the PAN, merchant name and acquirer are the same for all

of the disputed transactions being included in the batch.

Each individual disputed transaction included in the batch must be within the chargeback time frame.

The chargeback must be processed using an ARD from one of the disputed transaction included the

batch.

The chargeback must be processed for the total amount of all the disputed transactions included in

the batch.

Each transaction in the batch must be less than or equal to USD 25 or the local currency equivalent.

The total amount of all transactions in the batch must not exceed USD 250 or the local currency

equivalent.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Credit Not Processed

Chargeback Condition. The cardholder contacted the issuer claiming one of the following:

• The merchant failed to disclose its refund policy at the time of the transaction and is unwilling to

accept a return or cancellation of goods or services

• The merchant has not responded to the return or the cancellation of goods or services

• The merchant posted a credit for a reduced amount without proper disclosure

• The merchant failed to issue a Value Added Tax (VAT) credit

Time Frame. One of the following:

• 120 calendar days from the transaction date for a VAT credit.

• Between 15 and 120 calendar days from the date on the credit documentation, or the date the

service was canceled, or the goods were returned.

When waiting the 15 calendar days would cause the issuer to exceed the 120 calendar day time

frame, the issuer may chargeback the transaction earlier than 15 calendar days.

When the credit documentation is dated, the 120-day chargeback time frame counts the date on

the credit documentation as day zero.

When the credit documentation is undated, the 120-day time frame counts the date on the

cardholder letter, email, message, or Dispute Resolution Form—Cardholder Dispute Chargeback

(Form 1221) as day zero.

When the cardholder letter is undated, the chargeback time frame counts the receipt date of the

documentation by the issuer as day zero.

• The issuer can immediately charge back the transaction upon receiving one of the following forms

of credit documentation:

– A letter from the merchant advising the issuer to obtain credit using a chargeback

– Proof of an improperly disclosed in-store credit

– A TID voided by the merchant

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4860 (Credit Not Processed) for Dual Message System transactions

• 60 (Credit Not Processed) for Debit Mastercard transactions processed on the Single Message

System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. One of the following:

• A cardholder letter, email, message, or Dispute Resolution Form—Cardholder Dispute Chargeback

(Form 1221) describing the cardholder’s complaint in sufficient detail to enable all parties to

understand the dispute

• Merchant documentation to support a credit is due to the cardholder

• Proof of an improperly disclosed in-store credit and cardholder explanation

DE 72 (Data Record). For improperly disclosed partial credit only:

NNNNNNNNNNNNNNNNNNNNNNN

Notes

Replace NNNNNNNNNNNNNNNNNNNNNNN with the Acquirer Reference Data (ARD) of the credit

transaction.

Proper Disclosure

Merchants that are unwilling to accept buyer’s remorse returns and cancellations or that want to have

special terms including (but not limited to) restocking fees or in-store credits, must disclose these

terms at the time of the transaction. The cardholder must be informed of the refund policy as

described in the Transaction Processing Rules, section 3.11 Specific Terms of Transaction. Failure to

disclose a refund policy will result in the merchant’s requirement to accept the goods for return and

issue a credit.

When the merchant informed the cardholder of its refund policy at the time of purchase, the

cardholder must abide by that policy. For example, the cardholder’s sales slip clearly indicates that the

refund policy is “in-store credit only” or “no refunds.”

Counterfeit Goods

“Counterfeit” means that the goods were not produced by an authorized manufacturer of

the goods and therefore infringe on intellectual property rights.

Chargeback Condition. The cardholder contacted the issuer claiming both of the following:

• The cardholder engaged in the transaction.

• The cardholder claims that the goods were purported to be genuine, but were counterfeit.

Time Frame. One of the following:

• 120 calendar days from the Central Site Business

• When the transaction involved delayed delivery: 120 calendar days from the date the goods and

services were received

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute— Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. A cardholder letter, email, message or completed Dispute Resolution Form

—Cardholder Dispute Chargeback (Form 1221) describing the cardholder’s complaint in sufficient

detail to enable all parties to understand the dispute and the disposition of the goods. Examples of

disposition include but are not limited to:

• The goods are in the possession of a governmental agency, such as customs

• The goods are in the possession of the cardholder

• The cardholder discarded the goods

• The cardholder returned the goods to the merchant

DE 72 (Data Record). Optionally: COUNTERFEIT

Notes. None

Cardholder Dispute of a Recurring Transaction

A recurring transaction allows for continuous billing without a specified end date.

Chargeback Condition. The cardholder contacted the issuer claiming one of the following:

• The cardholder notified the merchant to cancel the recurring transaction and the merchant

continued to bill the cardholder.

• The cardholder was not aware that the cardholder was agreeing to a recurring transaction.

Time Frame. Within 120 calendar days of the transaction settlement date.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4841 (Canceled Recurring or Digital Goods Transactions) for Dual Message System transactions

• 41 (Canceled Recurring Transaction) for Debit Mastercard transactions processed on the Single

Message System

Supporting Documents. A cardholder letter, email, message, or completed Dispute Resolution Form

—Cardholder Dispute Chargeback (Form 1221) describing the cardholder’s complaint in sufficient

detail to enable all parties to understand the dispute.

In addition for batched chargebacks, a list of the ARDs and the amount of each disputed transaction.

DE 72 (Data Record). MULTIPLE TRANSACTIONS NNN.

Required for batched chargebacks as described below in Notes. The issuer must replace NNN with the

number of items being charged back.

Data record optional for all other chargebacks.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Notes

Proper Disclosure of Terms and Conditions

Terms and conditions for recurring transactions must be clearly detailed to the cardholder. Recurring

transaction terms and conditions must be separate and distinct from general terms and conditions of

sale.

Batching MCC 4816 or 5967 Transactions

Multiple disputed transactions may be combined into one chargeback message, this is called batching.

The batching option is only available when the PAN, merchant name and acquirer are the same for all

of the disputed transactions being included in the batch.

All of the disputed transactions must be encoded with either MCC 4816 or 5967

Each individual dispute transaction included in the batch must be within the chargeback time frame.

The chargeback must be processed using an ARD from one of the disputed transaction included the

batch.

The chargeback must be processed for the total amount of all the disputed transactions included in

the batch.

The issuer must include:

• A list of the disputed transactions, including the Acquirer Reference Data (ARD) and amount of

each disputed transaction.

• The following text in DE 72: MULTIPLE TRANSACTIONS NNN

The issuer must replace NNN with the number of items being charged back.

Issuer Dispute of a Recurring Transaction

Chargeback Condition. One of the following:

1. The issuer listed the account in the Payment Cancellation Service (PCS) prior to the disputed

transaction occurring.

2. The issuer previously charged back a disputed recurring transaction with the same PAN and

merchant

3. The issuer previously notified the merchant or acquirer to cancel the recurring transaction prior to

the disputed transaction occurring.

Time Frame. Within 120 calendar days of the transaction settlement date.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4841 (Canceled Recurring or Digital Goods Transactions) for Dual Message System transactions

• 41 (Canceled Recurring Transaction) for Debit Mastercard transactions processed on the Single

Message System

Supporting Documents. One of the following correspond to the Chargeback Condition:

1. None

2. One of the following:

– A new cardholder letter, email, message, or Dispute Resolution Form—Cardholder Dispute

Chargeback (Form 1221) stating that the merchant was notified of the cancellation before the

disputed transaction.

– The original cardholder letter, email, message, or Dispute Resolution Form—Cardholder

Dispute Chargeback (Form 1221) from the original chargeback disputing a recurring

transaction stating that the merchant was notified of the cancellation before the disputed

transaction.

3. Issuer certification letter stating that the merchant was notified of the cancellation before the

disputed transaction.

DE 72 (Data Record). One of the following correspond to the Chargeback Condition:

1. RPCS MMDDYY

2. CB MMDDYY ARD XXXXXXXXXXXXXXXXXXXXXXX

3. None

Notes. One of the following correspond to the Chargeback Condition:

1. Replace MMDDYY with the date the PAN was listed in the Payment Cancellation Service (PCS).

2. Replace MMDDYY with the date of the original chargeback for Cardholder Dispute of a

Recurring Transaction (refer to the previous table) which contained the cardholder’s letter, email,

message or completed Dispute Resolution Form describing the cardholder’s dispute.

Replace XXXXXXXXXXXXXXXXXXXXXXX with the Acquirer Reference Data (ARD) of the

original chargeback for Cardholder Dispute of a Recurring Transaction (refer to the previous table)

which contained the cardholder’s letter, email, message or completed Dispute Resolution Form

describing the cardholder’s dispute.

3. None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Addendum Dispute

An addendum dispute is the dispute of a separate transaction that occurs after a valid

transaction involving the same merchant and the same cardholder.

Chargeback Condition. The cardholder contacted the issuer claiming all of the following:

• The cardholder engaged in a valid transaction with the merchant.

• A subsequent transaction occurred with that same merchant without the cardholder’s consent.

• The cardholder contacted the merchant, or attempted to contact the merchant, to resolve the

dispute.

Merchant contact is optional when the cardholder is a corporate entity with a contractual

relationship with the merchant and the transaction is for an amount in excess of what is specified

in the contract. In such event the chargeback may be only for the amount of the excessive charge.

Time Frame. 120 calendar days of the Central Site Business Date of the disputed subsequent

transaction.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4859 (Addendum, No-show, or ATM Dispute) for Dual Message System transactions

• 59 (Services Not Rendered) for Debit Mastercard transactions processed on the Single Message

System

Supporting Documents. A cardholder letter, email, message, or completed Dispute Resolution Form

—Cardholder Dispute Chargeback (Form 1221) describing the cardholder’s complaint in sufficient

detail to enable all parties to understand the dispute. “Sufficient detail” includes:

• The cardholder engaged in a valid transaction with the merchant.

• A subsequent transaction occurred with that same merchant without the cardholder’s consent.

• The cardholder contacted the merchant, or attempted to contact the merchant, to resolve the

dispute.

Merchant contact is optional when the cardholder is a corporate entity with a contractual

relationship with the merchant and the transaction is for an amount in excess of what is specified

in the contract. In such event the chargeback may be only for the amount of the excessive charge.

When the cardholder is a corporate entity with a contractual relationship with the merchant and the

transaction is for an amount in excess of what is specified in the contract, the contract must be

provided when the merchant wasn’t contacted in an effort to resolve the dispute.

DE 72 (Data Record). None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Notes

The right to charge back the disputed amount is not dependent on the method of payment for the

original transaction. For example, the cardholder may have paid cash for the accepted transaction, but

the disputed subsequent transaction was applied to the Mastercard card because the cardholder

presented the Mastercard card to the merchant to guarantee the service.

A cardholder is not responsible for a charge representing loss, theft, or damage unless the transaction

was completed as described in the Transaction Processing Rules, section 3.12 Charges for Loss, Theft,

or Damage—Mastercard POS Transactions Only.

Cardholders are responsible for valid addendum charges. Examples include, but are not limited to:

meals that were signed for by the cardholder but not included in the final hotel folio or for parking

tickets/traffic fines issued while the vehicle was in the cardholder’s possession.

“No-Show” Hotel Charge

Chargeback Condition. The cardholder contacted the issuer to dispute a “no-show” hotel charge

from a merchant that participates in the Mastercard Guaranteed Reservations Service (described in

Appendix E, Lodging Merchant Services) and alleged one of the following:

1. The cardholder canceled the reservation

2. The cardholder used the accommodations

3. The merchant provided alternate accommodations. For example, the cardholder arrived at the

hotel and no room was available. Although the hotel arranged for accommodations at another

hotel, the merchant billed the cardholder in error.

4. The “no-show” charge differed from the rate quoted to the cardholder. Under these

circumstances, only the difference between the two charges can be charged back.

5. The merchant did not advise the cardholder that the merchant would charge a “no-show” fee.

Time Frame. 120 calendar days within the Central Site Business Date.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4859 (Addendum, No-show, or ATM Dispute) for Dual Message System transactions

• 59 (Services Not Rendered) for Debit Mastercard transactions processed on the Single Message

System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. A cardholder letter, email, message, or completed Dispute Resolution Form

—Cardholder Dispute Chargeback (Form 1221) and one of the following corresponding to the

Chargeback Condition:

1. When available, cancellation number

2. The issuer must provide the ARD of the transactions that represent the actual use of the

accommodations. When the cardholder used the accommodations but did not use his or her

credit card for payment, the issuer must provide verification of the alternate form of payment,

such as a cash receipt or canceled check.

3. No additional documentation is required

4. No additional documentation is required

5. No additional documentation is required

DE 72 (Data Record). When the “no-show” charge differed from the rate quoted to the cardholder,

one of the following:

• NO SHOW XXX NNNN

• RS5 XXX NNNN

Notes

When the “no-show” charge differed from the rate quoted to the cardholder, the issuer must:

• Replace XXX with the three-digit ISO currency code of the transaction currency in which the rate

was quoted

• Replace NNNN with the rate quoted expressed in that currency

Transaction Did Not Complete

Chargeback Condition. The cardholder contacted the issuer claiming all of the following:

• The cardholder engaged in the transaction

• The cardholder claims the disputed transaction failed to complete

• The cardholder did not use the goods or services

Time Frame. 120 calendar days from the transaction settlement date.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4855 (Goods or Services Not Provided) for Dual Message System transactions

• 55 (Non-receipt of Merchandise) for Debit Mastercard transactions processed on the Single

Message System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. Cardholder email, letter, message or completed Dispute Resolution Form-

Cardholder Dispute Chargeback (Form 1221) describing the cardholder’s complaint in sufficient detail

to enable all parties to understand the dispute.

DE 72 (Data Record). None

Notes. None

Timeshares

Chargeback Condition. The cardholder contacted the issuer claiming that the cardholder canceled

the timeshare or similar provision of services within the Mastercard time frame, regardless of the

contractual terms.

Time Frame. 120 calendar days from the cancellation date.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4860 (Credit Not Processed) for Dual Message System transactions

• 60 (Credit Not Processed) for Debit Mastercard transactions processed on the Single Message

System

Retrieval Request. No

Supporting Documents. A cardholder letter, email, message, or Dispute Resolution Form—

Cardholder Dispute Chargeback (Form 1221) is required when the cardholder made a transaction for a

timeshare or any similar provision of services and canceled the agreement within

• 90 calendar days of the agreement date for intra-European and inter-European transactions

• 14 calendar days of the agreement date for all other transactions

DE 72 (Data Record). TIMESHARE

Notes. None

Credit Posted as a Purchase

Chargeback Condition. The cardholder contacted the issuer claiming that the cardholder account

has been inaccurately posted with a debit instead of a credit.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Time Frame. 120 calendar days from the transaction settlement date.

Message Reason Code. One of the following:

• 4853 (Cardholder Dispute) for Dual Message System transactions

• 53 (Cardholder Dispute—Defective/Not as Described) for Debit Mastercard transactions processed

on the Single Message System

The following message reason codes may continue to be used, however, they will eventually be

eliminated:

• 4860 (Credit Not Processed) for Dual Message System transactions

• 60 (Credit Not Processed) for Debit Mastercard transactions processed on the Single Message

System

Supporting Documents. None

DE 72 (Data Record). None

Notes. The chargeback amount can be up to twice the original transaction amount to offset the error.

The issuer should then correctly credit the cardholder’s account.

Second Presentment

The tables in this section detail the conditions under which a second presentment in response

to a Cardholder Dispute chargeback may be processed.

PAN Mismatch. The Primary Account Number (PAN) in chargeback supporting

documentation may differ from the PAN included by the acquirer in the clearing record. As a

result, a difference in PANs must not be the sole reason for an acquirer’s second presentment.

General Second Presentment

Second Presentment Condition. The acquirer can provide evidence in response to the cardholder’s

claims.

Time Frame. Within 45 calendar days of the chargeback settlement date.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. The merchant’s explanation and documentation.

When the Second Presentment is in response to a First Chargeback for an Addendum Dispute the

acquirer must provide proof the transaction was completed as described in the Transaction Processing

Rules, section 3.12 Charges for Loss, Theft, or Damage—Mastercard POS Transactions Only.

When the Second Presentment is in response to a First Chargeback for Credit Not Processed, the

acquirer must provide documentation that proper disclosure was made in accordance with the

Transaction Processing Rules, section 3.11 Specific Terms of a Transaction.

DE 72 (Data Record). None

Notes. A merchant or acquirer statement that the cardholder never contacted the merchant to cancel

the recurring transaction is not a valid second presentment.

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only

Second Presentment Condition. The acquirer can provide evidence in response to the cardholder’s

claims.

Time Frame. Within 45 calendar days of the chargeback settlement date.

IPM Second Presentment Message Reason Code.

2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions.

Supporting Documents. One of the following:

• Proof that the cardholder (or traveler) received reimbursement from the merchant, a bonding

authority or similar scheme according to local law.

• The merchant’s explanation and documentation showing that the travel services paid for will be

provided or were available to the cardholder (or traveler).

• The merchant’s explanation and documentation, specifically documenting that the travel services

are covered by a bonding authority or similar scheme according to local law and that the

cardholder (or traveler) has recourse to collect reimbursement. Instructions on how to request

reimbursement must be provided. An acquirer statement that a bonding authority or similar

scheme exists is not sufficient by itself. This remedy is not applicable to Swedish Domestic

Transactions.

DE 72 (Data Record). None.

Notes. A merchant or acquirer statement that the cardholder never contacted the bonding authority

or similar scheme to request reimbursement is not a valid basis for a second presentment.

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Digital Goods Purchase of USD 25 or Less

Second Presentment Condition. The acquirer can substantiate that the merchant offered at least

the following minimum purchase controls at the time of the transaction or transactions (in the case of

multiple transactions charged back in a batch).

• The option, enabled as a default setting, for the cardholder to disable all digital goods purchases;

• The time period during which a digital goods purchase can be made on the cardholder’s account

with the merchant (the “account open” period) must not exceed 15 minutes from the time at

which the cardholder enters account authentication credentials; and

• Allowing the cardholder to confirm or to cancel the clearly displayed total transaction amount of

each pending digital goods purchase before completion of the transaction.

Time Frame. Within 45 calendar days of the chargeback settlement date.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. Documentation to support that the chargeback is remedied or invalid (for

example, website screen images).

DE 72 (Data Record). None

Notes. None

Credit Previously Issued

Second Presentment Condition. The merchant issued a credit to the cardholder’s account.

Time Frame. Within 45 calendar days of the chargeback settlement date.

IPM Second Presentment Message Reason Code. One of the following:

• 2011 (Credit Previously Issued) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Supporting Documents. For Intra-European and Inter-European transactions, one of the following:

1. When the credit was processed to the cardholder’s Mastercard account: None

2. When the credit was processed by other means: Compelling evidence showing the credit was

processed.

For all other transactions: None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

DE 72 (Data Record). For Intra-European and Inter-European transactions, one of the following

corresponding to the Supporting Documents:

1. CRED MMDDYY ARD

2. CREDIT MMDDYY XXXXXXXXXXXX

For all other transactions: MMDDYY ARD

Notes

This second presentment is not available for ATM transactions.

Replace MMDDYY with the date of the credit transaction.

Optionally, replace ARD with the Acquirer Reference Data (ARD) of the credit transaction.

Replace XXXXXXXXXXXX with the means by which the credit was processed. Examples include, but

are not limited to: bank transfer, store credit, check.

An Inter-European Transaction is defined as: A Transaction completed using a Card issued in a

country or territory listed in Single European Payments Area (SEPA) at a Terminal located in a country

or territory listed in Non-Single European Payments Area (Non-SEPA) or Transaction completed using a

Card issued in a country or territory listed in Non-Single European Payments Area (Non-SEPA) at a

Terminal located in a country or territory listed in Single European Payments Area (SEPA).

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Additional Second Presentment Options

IPM Second Presentment Message Reason Codes and Second Presentment Conditions. One of

the following:

• One of the following for Dual Message System transactions:

– 2001—Invalid Acquirer Reference Data; Documentation was Received or was Not Required

The combination of Primary Account Number and Acquirer Reference Data contained in the

chargeback record does not match the information contained in the first presentment record.

– 2002—Non-receipt of Required Documentation to Support Chargeback Required supporting

documentation not received.

An acquirer must wait a minimum of eight calendar days from the first chargeback before using

this message reason code. Mastercard will block the Arbitration Chargeback when an acquirer

second presents with message reason code 2002 after eight calendar days from the first

chargeback and before the issuer sends the supporting documentation. The acquirer must

accept supporting documentation as long as the acquirer has not processed a second

presentment.

– 2004—Invalid Acquirer Reference Data on Chargeback; Documentation was Received

The combination of Primary Account Number and Acquirer Reference Data contained in the

chargeback record does not match the information contained in the first presentment record.

– 2701—Duplicate Chargeback

The issuer processed a first chargeback for the same transaction more than once.

Mastercard recommends that the acquirer provides the processing date and chargeback

reference number of the original chargeback with its second presentment.

– 2702—Past Chargeback Time Limit

The issuer’s first chargeback is processed past the time frame specified for the chargeback.

– 2704—Invalid Data Record Text

Text required to appear in the first chargeback’s DE 72 (Data Record) is missing or incomplete.

– 2709—Documentation Received was Illegible Supporting documentation is illegible.

The acquirer’s second presentment will be considered invalid should Mastercard Dispute

Resolution Management staff determine that the supporting documentation is legible during

an arbitration case filing.

– 2710—Scanning Error—Unrelated Documents or Partial Scan

Supporting documentation does not correspond to the transaction being charged back (for

example, the documentation concerns a different transaction) or is incomplete.

– 2713—Invalid Chargeback

The first chargeback does not meet the prerequisites for the message reason code.

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

DE 72 (Data Record). None

Notes. None

Arbitration Chargeback

The tables in this section detail the conditions under which an arbitration chargeback in

response to a second presentment may be processed.

General Arbitration Chargeback

Arbitration Chargeback Condition. The cardholder continues to dispute the transaction.

When the merchant’s explanation remedied the original chargeback condition but that information

allowed the issuer to determine a new chargeback condition exists, then the issuer may continue the

chargeback by processing the arbitration chargeback using the requirements of the new chargeback

condition. For example, the first chargeback was for merchandise not received, the second

presentment includes proof that delivery occurred after the first chargeback was processed, the

cardholder now claims that the merchandise arrived damaged. The arbitration chargeback must meet

the conditions for Goods or Services were either Not as Described or Defective.

Time Frame. Within 45 calendar days of the second presentment settlement date.

IPM Arbitration Chargeback Message Reason Code. 4853 (Cardholder Dispute)

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. A new cardholder letter, email, message, or Dispute Resolution Form—

Cardholder Dispute Chargeback (Form 1221) dated after the second presentment and specifically

addressing the Merchant’s explanation.

In addition:

• For disputes involving Good or Services were Not as Described or Defective: When not

provided with the first chargeback, documentation from an expert or professional that supports

the cardholder’s dispute about the level of quality or misrepresentation may be required when the

validity of the dispute is challenged by the merchant. Other documentation necessary to support

the validity of the dispute may include, but is not limited to, the original receipt, invoice, work

order, brochure, contract, or appraisal.

• For disputes involving Counterfeit: When not provided with the first chargeback, one of the

following:

– Documentation provided by a person purporting to be the owner or authorized representative

of the owner of intellectual property rights for the goods purported to be counterfeit (which

documentation may be available from a website) substantiating that the goods purchased are

counterfeit; or

– Documentation substantiating that the merchant that sold the purported counterfeit goods

was closed by a governmental agency for selling counterfeit goods now purported by the

cardholder to be counterfeit; or

– Documentation from a bona fide expert substantiating that the disputed goods are counterfeit,

which documentation is on the expert’s letterhead or validated by other information

demonstrating that the opinion expressed is that of an expert.

Additionally, Mastercard requests that the issuer report the cardholder’s allegation of an intellectual

property rights infringement with an email to: ipinquiries@mastercard.com

• For disputes involving Credit Not Processed: When the original cardholder letter, email,

message, or Dispute Resolution Form—Cardholder Dispute Chargeback (Form 1221) included in

the first chargeback states that the cardholder returned the merchandise and the merchant denies

receiving the merchandise in the second presentment, the issuer must then obtain proof that the

merchandise was returned to and received by the merchant to accompany the arbitration

chargeback.

• For disputes involving Goods or Services Were Not Provided: One of the following:

– When the second presentment documentation includes a signed delivery receipt, the new

cardholder letter, email, message, or completed Dispute Resolution Form—Cardholder Dispute

Chargeback (Form 1221) must state the signature on the delivery receipt is not the cardholder’s

signature or the signature of any person authorized by the cardholder.

When the second presentment documentation stated that paper airline tickets were issued, the

new cardholder letter, email, message or completed Dispute Resolution Form—Cardholder

Dispute Chargeback (Form 1221) must explain the disposition of the paper airline tickets by

clearly stating that the airline tickets are no longer in the cardholder’s possession and how the

airline tickets were disposed (for example, the airline tickets were discarded, destroyed,

returned to the issuer, returned to the travel agency, or disposed in some other manner).

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

– None, when all of the following:

– The dispute was not for paper airline tickets

– The second presentment documentation included a delivery receipt dated before the

original cardholder letter

– The delivery receipt was not signed by the cardholder, or a person authorized by the

cardholder.

• For disputes involving a “No-show” Hotel Charge: When the original cardholder letter, email,

message, or completed Dispute Resolution Form—Cardholder Dispute Chargeback (Form 1221)

included in the first chargeback did not include a cancellation number and the acquirer processed

a second presentment that states one the following:

– The hotel has a formal Guaranteed Reservation Program that includes the issuance of

confirmation and cancellation numbers.

– The hotel has no record of the cancellation. The cardholder must provide proof of merchant

contact within the cancellation time frame required by the Guaranteed Reservation Service

program (such as a copy of a phone bill indicating that a call was made to the merchant before

18:00 [merchant’s local time] on the date of the reservation).

DE 72 (Data Record). None

Notes. The new cardholder letter, email, message or completed Dispute Resolution Form—Cardholder

Dispute Chargeback (Form 1221) must be dated after the second presentment and must specifically

address the rebuttal provided with the second presentment.

Failed Travel Merchant—Intra-EEA and Domestic European Transactions Only

Arbitration Chargeback Condition. The Cardholder continues to dispute the Transaction

Time Frame. Within 45 calendar days of the second presentment settlement date.

IPM Arbitration Chargeback Message Reason Code.

4853 (Cardholder Dispute-Defective/Not as Described) for Dual Message System transactions.

The following message reason codes may continue to be used, however, they will eventually be

replaced by 4853:

• 4855 (Goods or Services Not Provided) for Dual Message System transactions

• 4859 (German Domestic Rule - Card Acceptor Unwilling or Unable to Render Services) for Dual

Message System transactions

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Supporting Documents. A new Cardholder letter, email, message, or Dispute Resolution Form—

Cardholder Dispute Chargeback (Form 1221) dated after the second presentment and specifically

addressing the Merchant’s explanation.

When the Acquirer fulfilled the requirements for a valid second presentment, in particular by

documenting that the travel services were covered by a bonding authority or similar scheme according

to local law, then evidence of the bonding authority or similar scheme’s response to the Cardholder’s

(or traveler’s) claim, or proof of bond insufficiency must be provided. If the Cardholder (or traveler)

requested reimbursement and did not receive a response after 30 calendar days from the date the

request was sent, then a copy of the request for reimbursement must be provided. A detailed

Cardholder (or traveler) explanation is permitted if such documentation is not available.

DE 72 (Data Record). None.

Notes. A request for reimbursement from a bonding authority or similar scheme is not required for

Swedish domestic transactions.

Acquirer Reference Data (ARD) Does Not Match or is Invalid

Arbitration Chargeback Condition. One of the following:

1. When the issuer’s first chargeback didn’t include the ARD present in the first presentment, the

issuer must provide the correct ARD.

2. When the issuer’s first chargeback included the ARD present in the first chargeback, the issuer

must provide a copy of the first presentment as Supporting Documentation.

Time Frame. Within 45 calendar days of the second presentment settlement date

IPM Arbitration Chargeback Message Reason Code. One of the following corresponding to the

Arbitration Chargeback Condition:

1. When the second presentment used message reason code 2001: 4905—Invalid Acquirer

Reference Data; Documentation was Not Received or Not Required

2. When the second presentment used message reason code 2004: 4908—Invalid Acquirer

Reference Data; Documentation Received

Supporting Documents. One of the following corresponding to the Arbitration Chargeback

Condition:

1. None

2. A copy of the first presentment showing the ARD

DE 72 (Data Record). CORRECT REFERENCE NUMBER SUPPLIED

Notes. None

Dual Message System Chargebacks

Cardholder Dispute Chargeback

Chargeback Guide • 13 December 2018

Additional Arbitration Chargeback Options

IPM Arbitration Chargeback Message Reason Codes and Arbitration Chargeback Conditions.

One of the following:

1. 4901—Required Documentation Not Received to Support Second Presentment Required

supporting documentation was not received.

An issuer must wait a minimum of eight calendar days from the second presentment before using

this message reason code.

An issuer can generate an arbitration chargeback with message reason code 4901 nine calendar

days from the second presentment and before the acquirer sends the supporting documentation.

Mastercard Dispute Resolution Management staff will find the acquirer responsible when the

acquirer files an arbitration case.

The issuer must accept supporting documentation as long as the issuer has not processed an

arbitration chargeback.

2. 4902—Documentation Received was Illegible Supporting documentation is illegible.

The issuer’s arbitration chargeback will be considered invalid should Mastercard Dispute

Resolution Management staff determine that the supporting documentation is legible during an

arbitration case filing.

3. 4903—Scanning error—Unrelated Documents or Partial Scan

Supporting documentation does not correspond to the transaction being charged back (for

example, the documentation concerns a different transaction) or is incomplete.

Time Frame. Within 45 calendar days of the second presentment settlement date.

Supporting Documents. None

DE 72 (Data Record). None

Notes. None

Fraud-related Chargebacks

For purposes of the chargeback Standards, the following message reason codes are deemed

to be fraud-related.

• 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 Liability Shift—Lost/Stolen/Never Received Issue (NRI) Fraud

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

No Cardholder Authorization

This section provides information in handling a dispute when the cardholder states that the

cardholder did not engage in the transaction.

A No Cardholder Authorization chargeback must not be processed for any of the following:

• Face-to-face card-read transactions. A face-to-face transaction at an attended terminal

with card-read (not key-entered) account information.

• Authorization Approval after the FNS Date. The issuer approved the transaction after

submitting two or more chargebacks involving the same Mastercard card account (for this

purpose, “account” means primary account number [PAN] and expiration date) for any of

the following message reason codes: 4837, 4840, 4870, or 4871. Message reason code

4863 first chargebacks will be included in the FNS count once the FNS fraud chargeback

count is two or greater.

• FNS Counter Exceeds 15 Fraud-Related Chargebacks. The issuer submitted more than

15 chargebacks in aggregate involving the same account (as defined above) for message

reason codes 4837, 4840, 4870, or 4871. Message reason code 4863 first chargebacks will

be included in the FNS count once the FNS fraud chargeback count is two or greater.

• Emergency cash disbursements or emergency travelers check refunds.

• ATM transactions.

• Transactions that occurred at a cardholder-activated terminal (CAT) that were

properly identified in the authorization messages and clearing records as CAT Level 1

(where a PIN is required) or when properly identified in the clearing records as CAT Level 3.

• Counterfeit card transactions that occurred at a CAT Level 2 where the acquirer

transmitted the full unedited card-read data in the Authorization Request/0100 message

and obtained an authorization approval or valid transaction certificate.

• Transactions resulting from an account takeover and subsequently reported to SAFE as

such. An account takeover occurs when the transaction posts to an account that was

fraudulently taken over from the authorized cardholder that opened the account.

• Addendum Disputes. An addendum dispute is the dispute of a separate transaction that

occurs after a valid transaction involving the same merchant and the same cardholder. The

issuer must process a chargeback for message reason code 4853—Cardholder Dispute

when the cardholder acknowledges participation in the original transaction.

• Properly identified Mastercard SecureCode, Masterpass by Mastercard, and Digital

Secure Remote Payment (DSRP) transactions (including any subsequent transaction

related to the original DSRP transaction, such as a partial shipment or recurring payment)

identified in authorization (DE 48, subelement 42 [Electronic Commerce Indicators],

subfield, 1 (Electronic Commerce Security Level Indicator and UCAF Collection Indicator),

positions 1, 2, and 3) with the values of 211, 212, 215, 221, 222, 225, 241, 242, 245,

911, 912, or 915.

• Mastercard Commercial Payments Account. The transaction was a Mastercard

Commercial Payments Account transaction. A Mastercard Commercial Payments Account

transaction occurs when PDS 0002 (GCMS Product Identifier) was MAP (Mastercard

Commercial Payments Account) in the First Presentment/1240 message.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

• Digital Goods. An e-commerce transaction that was less than or equal to USD 25 (or the

local currency equivalent) for the purchase of digital goods resulted because the merchant

did not offer purchasing control settings to the cardholder when the cardholder created an

account with the merchant.

Digital goods are goods that are stored, delivered, and used in electronic format, such as,

by way of example but not limitation, books, newspapers, magazines, music, games, game

pieces, and software (excludes gift cards).

Refer to Message Reason Code 4853—Cardholder Dispute regarding chargeback

requirements for non-fraud digital goods transactions.

• Brazil only—The transaction was a Mastercard Agro Card transaction occurring in Brazil

with a Mastercard Agro Card issued in Brazil. A Mastercard Agro Card transaction occurs

when PDS 0002 (GCMS Product Identifier) was MLF (Mastercard Agro Card) in the First

Presentment/1240 message.

• Taiwan only—The transaction was chip-initiated domestic transaction occurring at a

cardholder-activated terminal (CAT) that was properly identified as a CAT Level 2 in Taiwan

under one of the below MCCs

– 4011—Railroads – Freight

– 4111—Transportation – Suburban and Local Commuter Passenger, including Ferries

– 4225—Public Warehousing-Farm Products Refrigerated Goods, Household Goods, and

Storage

– 5399—Miscellaneous General Merchandise

– 5411—Grocery Stores and Supermarkets

– 5422—Freezer and Locker Meat Provisioners

– 5542—Automated Fuel Dispensers

– 5812—Eating Places and Restaurants

– 5814—Fast Food Restaurants

– 5999—Miscellaneous and Specialty Retail Stores

– 7011—Lodging- Hotels, Motels, and Resorts

– 7012—Timeshares

– 7210—Laundry, Cleaning, and Garment Services

– 7278—Buying and Shopping Services and Clubs

– 7512—Automobile Rental Agency

– 7523—Parking Lots and Garages

– 7832—Motion Picture Theaters

– 8062—Hospitals

– 9402—Postal Services- Government Only

• Bangladesh only—The transaction was a Mastercard Corporate Purchasing Card (MCP)

transaction occurring in Bangladesh with a Mastercard MCP card issued in Bangladesh. A

Mastercard MCP card transaction occurs when PDS 0002 (GCMS Product Identifier) was

MCP (Mastercard Corporate Purchasing Card) in the First Presentment/1240 message when

the value of the transaction is equal to or greater than BDT 100,000.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

• India only—The transaction was a Mastercard Corporate Purchasing Card (MCP)

transaction occurring in India with a Mastercard MCP card issued in India. A Mastercard

MCP card transaction occurs when PDS 0002 (GCMS Product Identifier) was MCP

(Mastercard Corporate Purchasing Card) in the First Presentment/1240 message when the

value of the transaction is equal to or greater than INR 100,000.

• Sri Lanka only—The transaction was a Mastercard Corporate Purchasing Card (MCP)

transaction occurring in Sri Lanka with a Mastercard MCP card issued in Sri Lanka. A

Mastercard MCP card transaction occurs when PDS 0002 (GCMS Product Identifier) was

MCP (Mastercard Corporate Purchasing Card) in the First Presentment/1240 message when

the value of the transaction is equal to or greater than LKR 200,000.

• Corporate Purchasing Department Account Program transactions.

• Mastercard Biometric Card—The transaction occurred with a Mastercard Biometric Card

and biometric Cardholder authentication was successful. Refer to Appendix F for

Mastercard Biometric Card Program transaction identification information.

Supporting Documents. Supporting Documents must be in English or accompanied by an

English translation unless both the issuer and the acquirer share a common language.

Supporting Documents must provide sufficient detail to enable all parties to understand the

nature of the dispute or rebuttal. Mastercard will determine whether the Supporting

Documents contain sufficient detail.

Supporting Documents must be provided using the MasterCom application. Any action

received in MasterCom must be responded to in MasterCom.

Although Supporting Documents can be entered into MasterCom at any time before the next

cycle is processed, Supporting Documents must be entered into the MasterCom system within

eight calendar days of generating a chargeback or second presentment requiring Supporting

Documents to avoid liability for the disputed transaction solely for failing to provide

Supporting Documents (codes 2002 or 4901).

The cardholder email, cardholder letter, and/or cardholder message (including through a

password-protected website) must come directly from the cardholder or, in the case of a

commercial card, the corporate entity. A completed Dispute Resolution Form must be the

direct result of a conversation with the cardholder.

Chargeback

The tables in this section detail the conditions under which an issuer may process a first

chargeback under the No Cardholder Authorization chargeback.

No Cardholder Authorization

Chargeback Condition. The cardholder contacted the issuer claiming that the cardholder did not

authorize the transaction.

Time Frame. 120 calendar days

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Message Reason Code. One of the following:

• 4837 (No Cardholder Authorization) for Dual Message System transactions

• 37 (No Cardholder Authorization) for Debit Mastercard transactions processed on the Single

Message System

Supporting Documents. One of the following:

• Cardholder email, letter, message or completed Dispute Resolution Form-Fraud (Form 0412) stating

that the cardholder did not authorize the transaction.

• Written complaint from a company or government agency representative on behalf of a corporate

card cardholder when the company or government agency no longer employs the authorized

cardholder

In addition, for batched chargebacks: A list of the ARDs and the amount of each transaction.

DE 72 (Data Record). For batched chargebacks: MULTIPLE TRANSACTIONS NNN

For all other chargebacks: None

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Notes

SAFE Reporting

The transaction must be reported to SAFE as required in the SAFE Products User Guide.

Dispute Resolution Form-Fraud (Form 0412)

The Dispute Resolution Form-Fraud (Form 0412) form may only be used when all of the following

occur before processing the chargeback:

• The Mastercard card account is closed

• The issuer blocked the account on its host

• The issuer listed the account number on the Mastercard Stand-in Account File with a “capture

card” response until card expiration

• Report the transaction to SAFE

CAT 2 Transactions

This chargeback is not available for counterfeit transactions occurring at a cardholder-activated

terminal (CAT) that was properly identified as a CAT Level 2 in the authorization and clearing

messages.

The chargeback is also not available for chip-initiated domestic transactions occurring at a cardholder-

activated terminal (CAT) that was properly identified as a CAT Level 2 in Taiwan under one of the

below MCCs.

• 4011—Railroads – Freight

• 4111—Transportation – Suburban and Local Commuter Passenger, including Ferries

• 4225—Public Warehousing-Farm Products Refrigerated Goods, Household Goods, and Storage

• 5399—Miscellaneous General Merchandise

• 5411—Grocery Stores and Supermarkets

• 5422—Freezer and Locker Meat Provisioners

• 5542—Automated Fuel Dispensers

• 5812—Eating Places and Restaurants 5814—Fast Food Restaurants

• 5999—Miscellaneous and Specialty Retail Stores

• 7011—Lodging- Hotels, Motels, and Resorts

• 7012—Timeshares

• 7210—Laundry, Cleaning, and Garment Services

• 7278—Buying and Shopping Services and Clubs

• 7512—Automobile Rental Agency

• 7523—Parking Lots and Garages

• 7832—Motion Picture Theaters

• 8062—Hospitals

• 9402—Postal Services- Government Only

This chargeback is available for lost, stolen, never received (NRI) contact and contactless transactions

when all of the following occurs:

• Before processing the chargeback, the issuer must block the account on its host and list the

primary account number (PAN) on the Mastercard Stand-in Account File with a “capture card”

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

response until card expiration or for contactless transactions involving a Mastercard token, the

issuer must deactivate the token.

• The cardholder email, letter, message or completed Dispute Resolution Form—Fraud (Form 0412)

alleging that the transaction is fraudulent also must state, or the issuer must otherwise certify by

means of a separate document accompanying the cardholder letter, that the card was lost, stolen,

or never received (NRI) at the time of the transaction.

Aggregated Contactless Transit Transactions

The issuer may only charge back the disputed amount of an Aggregated Contactless Transit

transaction when the Aggregated Contactless Transit transaction cleared for an amount above the

applicable CVM Limit.

Domestic Installment Billing

This chargeback may be used to charge back the first installment submitted under a domestic

installment payment arrangement for a fraud-related reason. In order to keep the integrity of the

Fraud Notification Service chargeback counters, the issuer must use message reason code 4850—

Installment Billing Dispute to charge back any subsequent installment payments.

Batching MCC 4813, 4814, 4816 or 5967 Transactions

Multiple unauthorized, card-activated phone charges (MCC 4813 or 4814), computer network or

information service charges (MCC 4816), or audiotext or videotext charges (MCC 5967) transactions

may be combined into one chargeback message, this is called batching. The batching option is only

available when the PAN, merchant name and acquirer are the same for all of the disputed transactions

being included in the batch.

Each individual disputed transaction included in the batch must be within the chargeback time frame.

The chargeback must be processed using an ARD from one of the disputed transaction included the

batch.

The chargeback must be processed for the total amount of all the disputed transactions included in

the batch.

Replace NNN with number of transactions

Second Presentment

The tables in this section detail the conditions under which a second presentment in response

to a No Cardholder Authorization chargeback may be processed.

CAT 3. When the disputed transaction occurred at a CAT 3 device, the terminal must have

been properly identified as a CAT 3 device in the First Presentment/1240 message in order for

the acquirer to second present.

PAN Mismatch. The Primary Account Number (PAN) in chargeback supporting

documentation may differ from the PAN included by the acquirer in the clearing record. As a

result, a difference in PANs must not be the sole reason for an acquirer’s second presentment.

New Information. New information regarding the merchant name and/or transaction date is

not a valid second presentment.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Two or More Previous Fraud-related Chargebacks

Second Presentment Condition. The issuer approved the transaction after submitting two or more

chargebacks involving the same Mastercard card account (for this purpose, “account” means primary

account number [PAN], or PAN and expiration date) for message reason codes 4837, 4840, 4870,

and/or 4871.

Message reason code 4863 first chargebacks will be included in the FNS count once the FNS fraud

chargeback count is two or greater.

This condition has been met when PDS 0200 (Fraud Counter), subfield 1 (Fraud NTF Date) of the First

Chargeback/1442 message is present and contains a date value that is earlier than the authorization

approval date of the disputed transaction.

IPM Second Presentment Message Reason Code. One of the following:

• 2713 (Invalid Chargeback) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. None

DE 72 (Data Record). One of the following:

• FNS

• NN MMDDYY NN MMDDYY AUTH MMDDYY

Notes. The following applies to the use of DE 72 (Data Record):

• Use FNS when the authorization approval date of the disputed transaction is later than the date

value provided by the Fraud Notification Service in PDS 0200 (Fraud Counter), subfield 1 (Fraud

NTF Date) of the First Chargeback/1442 message.

• Use NN MMDDYY for a previous chargeback by replacing NN with the last two digits of the

message reason code and MMDDYY with the Central Site Business Date of the previous

chargeback. For AUTH MMDDYY, replace MMDDYY with the authorization approval date of the

disputed transaction.

Fraud-related Chargeback Counter Exceeds Threshold

Second Presentment Condition. The issuer submitted more than 15 chargebacks involving the same

card account (for this purpose, “account” means primary account number [PAN], or PAN and

expiration date) for message reason codes 4837, 4840, 4870, and/or 4871.

Message reason code 4863 first chargebacks will be included in the FNS count once the FNS fraud

chargeback count is two or greater.

This condition has been met when PDS 0200 (Fraud Counter), subfield 1 (Fraud NTF Date) of the First

Chargeback/1442 message is present and contains a date value that is earlier than the authorization

approval date of the disputed transaction.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

IPM Second Presentment Message Reason Code. One of the following:

• 2713 (Invalid Chargeback) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. None

DE 72 (Data Record). FNS COUNT NN

Notes. Replace NN with the chargeback count value provided by the Fraud Notification Service in PDS

0200, subfield 2 of the First Chargeback/1442 message. The chargeback count value must be 16 or

greater.

Contactless Transaction Unattended Terminals

Second Presentment Condition. The transaction was a contactless transaction equal to or less than

the applicable CVM limit.

Refer to Appendix C for the CVM limits.

IPM Second Presentment Message Reason Code. One of the following:

• 2008 (Issuer Authorized Transaction) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. None

DE 72 (Data Record). CONTACTLESS NNNNNN MMDDYY

Notes

Replace MMDDYY with the date the transaction was authorized.

Replace NNNNNN with the authorization approval code.

PIN Transaction

Second Presentment Condition. A PIN was present in the Authorization Request/0100 message.

IPM Second Presentment Message Reason Code. One of the following:

• 2008 (Issuer Authorized Transaction) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. None

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Chargeback Guide • 13 December 2018

DE 72 (Data Record). PIN MMDDYY NNNNNN

Notes

Replace MMDDYY with the date the transaction was authorized.

Replace NNNNNN with the authorization approval code.

Mastercard SecureCode SL1 (Merchant-only Liability Shift)

Second Presentment Condition. All of the following:

• All of the required e-commerce indicators were provided in the Authorization Request/0100

message.

• The Authorization Request Response/0110 message reflected the issuer’s approval of the

transaction.

• DE 48 (Additional Data—Private Use), subelement 42 (Electronic Commerce Indicators), subfield, 1

(Electronic Commerce Security Level Indicator and UCAF Collection Indicator), positions 1, 2, and

3) contained any of the following values of 211, 212, 215, 221, 222, 225, 241, 242, 245, 911,

912, or 915.

• For intraregional Europe transactions: The UCAF submitted by a Europe region merchant did

not contain the Mastercard-assigned static Accountholder Authentication Value (AAV).

IPM Second Presentment Message Reason Code. One of the following:

• 2008 (Issuer Authorized Transaction) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. None

DE 72 (Data Record). AUTH MMDDYY/NNNNNN SL 1

Notes

Replace MMDDYY with the date the authorization request message containing a value of 1 in DE48,

subfield 42, position 3 was approved.

Replace NNNNNN with the authorization approval code.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Mastercard SecureCode SL2 (Global Liability Shift)

Second Presentment Condition. All of the following:

• All of the required e-commerce indicators were provided in the Authorization Request/0100

message.

• The Authorization Request Response/0110 message reflected the issuer’s approval of the

transaction.

• DE 48 (Additional Data—Private Use), subelement 42 (Electronic Commerce Indicators), subfield, 1

(Electronic Commerce Security Level Indicator and UCAF Collection Indicator), positions 1, 2, and

3) contained any of the following values of 211, 212, 215, 221, 222, 225, 241, 242, 245, 911,

912, or 915.

IPM Second Presentment Message Reason Code. One of the following:

• 2008 (Issuer Authorized Transaction) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. None

DE 72 (Data Record). AUTH MMDDYY/NNNNNN SL 2

Notes

Replace MMDDYY with the date the transaction was authorized.

Replace NNNNNN with the authorization approval code.

This second presentment applies to Mobile Remote Payment transactions. For information about

Mobile Remote Payment transactions, see Chapter 18, Mastercard Mobile Rules of the Mastercard

Rules.

Account Takeover

Second Presentment Condition. The acquirer can provide evidence that the transaction resulted

from an account takeover.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Supporting Documents. Documentation proving the transaction resulted from an account takeover.

Examples include, but are not limited to:

• The Acquirer Loss File report. For more information, refer to the SAFE Products User Guide.

• The SAFE Acquirer Transaction Data report. For more information, refer to the SAFE Products User

Guide.

• A statement from the cardholder confirming that the account was in fact taken over and that

fraud subsequently occurred.

DE 72 (Data Record). None

Notes. None

Addendum Charges

Second Presentment Condition. The acquirer can substantiate that the addendum transaction is the

cardholder’s responsibility.

IPM Second Presentment Message Reason Code2700 (See Corresponding Documentation/

Chargeback Remedied) for Dual Message System transactions.

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. Documentation substantiating the cardholder has participated in the

original transaction and documentation to establish the cardholder is responsible for the addendum

transaction. For example, the original rental agreement or hotel folio.

When the disputed amount presents charges for loss, theft, or damage: Documentation

substantiating the transaction was completed as described in the Transaction Processing Rules, section

3.12 Charges for Loss, Theft, or Damage—Mastercard POS Transactions Only.

DE 72 (Data Record). None

Notes

For example, after the cardholder initially is billed for a vehicle rental, the cardholder is billed for a

separate additional amount that represents unpaid parking tickets. The cardholder claims that he or

she did not authorize the transaction for the parking tickets. The merchant should include, with the

second presentment, information about the violations showing that they were issued during the

period that the vehicle was rented by the cardholder, as well as the rental agreement with proof the

cardholder participated in the original transaction.

Address Verification Service (AVS) Transaction

Second Presentment Condition. Both of the following:

• The Authorization Response/0110 message included a positive Address Verification Service (AVS)

response of X or Y

• The address to which the merchandise was sent was the same as the AVS-confirmed address.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. Both of the following:

• Indicate AVS response X or Y

• Documentation supporting the merchandise was sent to the AVS-confirmed billing address

DE 72 (Data Record). None

Notes. None

Compelling Evidence for Airline Transactions

Second Presentment Condition. The acquirer can provide specific documentation to support

cardholder participation in the transaction.

This second presentment is limited to non-face-to-face airline transactions.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. At least one of the following documents and, when necessary, an

explanation:

• Flight ticket or boarding pass showing the passenger’s name

• Flight manifest showing the passenger’s name

• Additional transactions connected with the disputed flight, such as upgrades, excess baggage

charges, and in-flight purchases

• Passenger identification documentation showing a link to the cardholder

• Credits of frequent flyer miles for the flight, showing connection to the cardholder

• Proof of receipt of the flight ticket at the cardholder’s billing address

DE 72 (Data Record). COMP EVID

Notes. None

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Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Compelling Evidence for Recurring Transactions

Second Presentment Condition. The acquirer can provide specific documentation to support

cardholder participation in the transaction.

This second presentment is limited to non–face-to-face recurring transactions.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. All of the following:

• A description of the goods or services being provided

• The start date of the original recurring transaction

• State which, if any, of the following was used in the original transaction:

– SecureCode

– Card validation code 2 (CVC 2) and that the Authorization Response/0110 message included a

value of M in DE 48, subelement 87 (Card Validation Code Result)

• One of the following:

– The transaction was properly identified in both authorization and clearing as a recurring

transaction. Refer to the Customer Interface Specification and IPM Clearing Formats for the

recurring data element values.

– Documentation proving that the transaction was recurring. Examples included but are not

limited to: The merchant providing proof that the cardholder had to click to accept the

recurring terms and conditions or the cardholder signed a contract agreeing to the recurring

terms and conditions.

DE 72 (Data Record). COMP EVID

Notes. None

Compelling Evidence for E-commerce and MO/TO Transactions

Second Presentment Condition. The acquirer can provide specific documentation to support

cardholder participation in the transaction.

This second presentment is limited to e-commerce, mail order, and telephone order transactions.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. At least one of the following documents and, when necessary, an

explanation:

• A receipt, work order, or other document signed by the cardholder substantiating that the goods

or services were received by the cardholder (commonly referred to as “will call” and “in-store

pickup”)

• The cardholder’s written confirmation of registration to receive electronic delivery of goods or

services

• Copies of written correspondence exchanged between the merchant and the cardholder (such as

letter, email, or fax) showing that the cardholder participated in the transaction.

• A merchant statement documenting all of the following when, after completing an authenticated

e-commerce transaction, the merchant obtained authorization for a related transaction involving a

partial shipment or the payment of a balance due:

– The initial transaction was a Digital Secure Remote Payment (DSRP) transaction, DE 48,

subelement 42 (Electronic Commerce Indicators), subfield 1 (Electronic Commerce Security

Level Indicator and UCAF Collection Indicator), position 3 (UCAF Collection Indicator) is set to 2

in authorization, or was SecureCode-initiated;

– Description of the goods or services purchased in the initial transaction;

– Date and authorization approval code for the initial transaction; and

– The initial transaction was not disputed.

• When a merchant requires a cardholder to register prior to completing a purchase, the merchant

must provide documentation confirming the cardholder or authorized user is registered to

purchase goods with a password and must provide one or more of the following documentation:

– The cardholder or authorized user completed other undisputed purchases prior to, or after, the

alleged fraudulent transaction

– The cardholder or authorized user completed the disputed transaction from a registered device

and IP address

– Details of the purchase

– Signed proof of delivery

– Email addresses to support digital download delivery

– The cardholder or authorized user registered the disputed goods or services. For example,

registration for purposes of warranty or future software updates.

– The disputed goods or services were used

– A fully enabled SecureCode transaction was used to register a PAN for future transactions

DE 72 (Data Record). COMP EVID

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Notes

This second presentment right does not apply when the cardholder purchased as a guest.

A merchant’s ability to register a cardholder to make purchases does not, in and of itself, provide a

second presentment right.

A partial shipment may occur when an item ordered by the cardholder was unavailable at the time of

the initial transaction. A balance may be due when the cardholder agrees to pay in installments, or to

pay a deposit upon placing the order and the balance upon delivery of the goods (a “delayed

delivery”). Refer to Appendix F for Digital Secure Remote Payment (DSRP) transaction identification

requirements.

Guaranteed Reservation Service (“No-show")

Second Presentment Condition. The transaction was the result of a “no show” as described in the

Guaranteed Reservations section of the Lodging Merchant Service appendix of this manual.

IPM Second Presentment Message Reason Code. One of the following:

• 2700 (See Corresponding Documentation/Chargeback Remedied) for Dual Message System

transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date

Supporting Documents. All of the following:

• The primary account number (PAN)

• The cardholder’s name present on the card

• The confirmation number provided at the time the reservation was made

DE 72 (Data Record). None

Invalid Chargeback

Second Presentment Condition The issuer’s chargeback was invalid. For example, the issuer

submitted documentation that failed to support the chargeback.

IPM Second Presentment Message Reason Code. One of the following:

• 2713 (Invalid Chargeback) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. None

DE 72 (Data Record). Reason for the second presentment

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Notes. None

Chip Liability Shift

Second Presentment Condition. All of the following:

1. The transaction was between Customers that participate in the appropriate Chip Liability Shift

Program.

2. The transaction was face-to-face, occurred at an attended a hybrid terminal with card-read (not

key-entered) account information.

3. The transaction was initiated with a non-EMV chip card.

This is a final remedy.

IPM Second Presentment Message Reason Code. One of the following:

• 2870 (Chip Liability Shift) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. None.

DE 72 (Data Record). AUTH MMDDYY NNNNNN

Notes

Replace MMDDYY with the date the transaction was authorized.

Replace NNNNNN with the authorization approval code.

Chip/PIN Liability Shift

Second Presentment Condition. A transaction between Customers that participate in the Global

Chip Liability Shift Program Level 2 and the acquirer can show that the transaction occurred at a

hybrid terminal equipped with a PIN pad, while the card was not PIN-preferring.

This is a final remedy.

IPM Second Presentment Message Reason Code. One of the following:

• 2871 (Chip/PIN Liability Shift) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. DE 55 must be provided in the first presentment or authorization record.

DE 72 (Data Record). When applicable, AUTH MMDDYY NNNNNN

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Notes

Replace MMDDYY with the date the transaction was authorized.

Replace NNNNNN with the authorization approval code.

Credit Previously Issued

Second Presentment Condition. The merchant issued a credit to the cardholder’s account.

IPM Second Presentment Message Reason Code. One of the following:

• 2011 (Credit Previously Issued) for Dual Message System transactions

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Supporting Documents. None

DE 72 (Data Record). MMDDYY NNNNNNNNNNNNNNNNNNNNNNN

Notes

Replace MMDDYY with the date of the credit transaction.

Optionally, replace NNNNNNNNNNNNNNNNNNNNNNN with the Acquirer Reference Data (ARD) of

the credit transaction.

Additional Second Presentment Options

IPM Second Presentment Message Reason Codes And Second Presentment Conditions. One

of the following:

• One of the following for Dual Message System transactions:

– 2001—Invalid Acquirer Reference Data; Documentation was Received or was Not Required

The combination of Primary Account Number and Acquirer Reference Data contained in the

chargeback record does not match the information contained in the first presentment record.

– 2004—Invalid Acquirer Reference Data on Chargeback; Documentation was Received

The combination of Primary Account Number and Acquirer Reference Data contained in the

chargeback record does not match the information contained in the first presentment record.

– 2702—Past Chargeback Time Limit

The issuer’s first chargeback was processed past the time frame specified for the chargeback.

– 2704—Invalid Data Record Text

Text required to appear in the first chargeback’s DE 72 (Data Record) is missing or incomplete.

• 13 (Representment) for Debit Mastercard transactions processed on the Single Message System

Time Frame. Within 45 calendar days of the chargeback settlement date.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Supporting Documents. None

DE 72 (Data Record). None

Notes. None

Arbitration Chargeback

This section details the conditions under which an arbitration chargeback in response to a

second presentment may be processed.

New Location Information Provided in the Second Presentment

Arbitration Chargeback Condition. Both of the following:

• New information regarding the merchant location was provided in the second presentment

• The cardholder continues to claim that the cardholder did not authorize the transaction.

IPM Arbitration Chargeback Message Reason Code. 4837 (No cardholder authorization)

Time Frame. Within 45 calendar days of the second presentment settlement date.

Supporting Documents. One of the following:

• A new cardholder letter, email, or message dated after the second presentment specifically

addressing the new information.

• When the Mastercard card account is closed, a completed Dispute Resolution Form-Fraud (Form

0412) form dated after the second presentment and based on a discussion with the cardholder.

• A new cardholder letter, email, message or Dispute Resolution Form-Fraud (Form 0412) form is not

required when all of the following:

– The Mastercard card account is closed

– The original cardholder letter, email, message or Dispute Resolution Form-Fraud (Form 0412)

form specified the date on which the last legitimate transaction performed by the authorized

cardholder occurred

– The disputed transaction was approved after that date

DE 72 (Data Record). None

Notes. Before processing the arbitration chargeback with the Dispute Resolution Form-Fraud (Form

0412) form, the issuer must block the account on its host, list the account number on the Mastercard

Stand-in Account File with a “capture card” response until card expiration, and report the transaction

to SAFE.

New Information. New information regarding the merchant name and/or transaction date is not a

valid second presentment.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Addendum Disputes

Arbitration Chargeback Condition. One of the following:

• When the original transaction was fraudulent: The acquirer did not provide proof of card

presence for the original transaction and the original rental agreement or hotel folio

• When the charge is for loss, theft, or damage: The acquirer failed to provide proof of the

transaction was completed as described in the Transaction Processing Rules, section 3.8 Charges

for Loss, Theft, or Damage.

IPM Arbitration Chargeback Message Reason Code. 4837 (No cardholder authorization)

Time Frame. Within 45 calendar days of the second presentment settlement date.

Supporting Documents. When the original transaction was fraudulent and the acquirer failed to

provide proof of card presence: A new cardholder letter, completed Dispute Resolution Form-Fraud

(Form 0412), email, or message dated after the second presentment and specifically including both of

the following:

• Addresses the merchant’s explanation

• Identifies that the original transaction also was fraudulent

For charges of loss, theft, or damages where the acquirer failed to provide proof of card presence:

None

DE 72 (Data Record). None

Notes. When, as a result of information provided in the second presentment, the issuer learns that

the disputed transaction is an Addendum Transaction involving the same merchant, the issuer must

change the message reason code to 4853-Cardholder Dispute Chargeback, Addendum Dispute.

Address Verification Service (AVS) Transaction

Arbitration Chargeback Condition. One of the following:

1. Both of the following:

– The cardholder continues to dispute an AVS-confirmed transaction.

– The issuer confirmed that the AVS-confirmed address belonged to the legitimate cardholder at

the time of the authorization.

2. The issuer reviewed the AVS information from the second presentment and one of the following:

– Denies that a positive AVS was given

– Denies the merchandise was sent to the AVS-confirmed address.

IPM Arbitration Chargeback Message Reason Code 4837 (No cardholder authorization

Time Frame. Within 45 calendar days of the second presentment settlement date.

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Supporting Documents. One of the following corresponding to the Arbitration Chargeback

Condition:

1. One of the following:

– A new cardholder letter, email message, or Dispute Resolution Form-Fraud (Form 0412) dated

after the second presentment in which the cardholder continues to assert that the cardholder

did not authorize the transaction.

– A new cardholder letter, email, message, or Dispute Resolution Form-Fraud (Form 0412) dated

after the second presentment from a company or government agency representative on behalf

of a corporate card cardholder when the company or government agency no longer employs

the authorized cardholder and the issuer has closed the account.

2. None

DE 72 (Data Record). One of the following corresponding to the Arbitration Chargeback Condition:

1. CONFIRMED AVS

2. INVALID AVS REMEDY

Notes. None

Compelling Evidence

Arbitration Chargeback Condition. The cardholder reviewed the information provided in the

second presentment and reasserts fraud.

IPM Arbitration Chargeback Message Reason Code 4837 (No cardholder authorization)

Time Frame. Within 45 calendar days of the second presentment settlement date.

Supporting Documents. One of the following:

• A new cardholder letter, email, or message dated after the second presentment specifically refuting

the documentation received from the merchant in the second presentment.

• When the Mastercard card account is closed, a completed Dispute Resolution Form-Fraud (Form

0412) form dated after the second presentment and, based on a discussion with the cardholder,

specifically refuting the documentation received from the merchant in the second presentment.

DE 72 (Data Record). None

Notes. An arbitration chargeback is not available when SecureCode was used to initiate the

transaction.

Guaranteed Reservation Service (“No-show”)

Arbitration Chargeback Condition. The issuer or cardholder continues to dispute a Guaranteed

Reservation Service (“no-show”) transaction.

IPM Arbitration Chargeback Message Reason Code. 4837 (No cardholder authorization)

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Time Frame. Within 45 calendar days of the second presentment settlement date.

Supporting Documents. One of the following:

• A statement (or DE 72 text) by the issuer stating that information provided by the merchant is not

accurate and, in particular, which information is not accurate (for example, incorrect cardholder

name or incorrect cardholder address).

• A new cardholder letter, email, or message dated after the second presentment, to reconfirm the

cardholder’s dispute.

• When the Mastercard card account is closed, a completed Dispute Resolution Form-Fraud (Form

0412) form dated after the second presentment and based on a discussion with the cardholder.

DE 72 (Data Record). None

Notes. None

Acquirer Reference Data (ARD) Does Not Match or is Invalid

Arbitration Chargeback Condition. One of the following:

1. When the issuer’s first chargeback didn’t include the ARD present in the first presentment, the

issuer must provide the correct ARD.

2. When the issuer’s first chargeback included the ARD present in the first chargeback, the issuer

must provide a copy of the first presentment as Supporting Documentation.

Time Frame. Within 45 calendar days of the second presentment settlement date

IPM Arbitration Chargeback Message Reason Code. One of the following corresponding to the

Arbitration Chargeback Condition:

1. When the second presentment used message reason code 2001: 4905—Invalid Acquirer

Reference Data; Documentation was Not Received or Not Required

2. When the second presentment used message reason code 2004: 4908—Invalid Acquirer

Reference Data; Documentation Received

Supporting Documents. One of the following corresponding to the Arbitration Chargeback

Condition:

1. None

2. A copy of the first presentment showing the ARD

DE 72 (Data Record). CORRECT REFERENCE NUMBER SUPPLIED

Notes. None

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

Additional Arbitration Chargeback Options

IPM Arbitration Chargeback Message Reason Codes and Arbitration Chargeback Conditions.

One of the following:

• 48XX—New valid chargeback reason

When the merchant’s explanation remedied the original chargeback condition but that information

allowed the issuer to determine a new chargeback condition exists, then the issuer may continue

the chargeback by processing the arbitration chargeback using the requirements of the new

chargeback condition.

When the first chargeback was processed as 4837-No Cardholder Authorization, an issuer is

prohibited from processing an arbitration chargeback using 4870-Chip Liability Shift or 4871-Chip

Liability Shift—Lost/Stolen/Never Received Issue (NRI) Fraud .

• 4901—Required Documentation Not Received to Support Second Presentment

Required supporting documentation was not received.

An issuer must wait a minimum of eight calendar days from the second presentment before using

this message reason code.

An issuer can generate an arbitration chargeback with message reason code 4901 nine calendar

days from the second presentment and before the acquirer sends the supporting documentation.

Mastercard Dispute Resolution Management staff will find the acquirer responsible when the

acquirer files an arbitration case.

The issuer must accept supporting documentation as long as the issuer has not processed an

arbitration chargeback.

• 4902—Documentation Received was Illegible Supporting documentation is illegible.

The issuer’s arbitration chargeback will be considered invalid should Mastercard Dispute Resolution

Management staff determine that the supporting documentation is legible during an arbitration

case filing.

• 4903—Scanning error—Unrelated Documents or Partial Scan

Supporting documentation does not correspond to the transaction being charged back (for

example, the documentation concerns a different transaction) or is incomplete.

Time Frame. Within 45 calendar days of the second presentment settlement date.

Supporting Documents. None

DE 72 (Data Record). None

Notes. None

Fraudulent Processing of Transactions

This section provides information for an issuer and acquirer in handling a dispute regarding

the fraudulent processing of transaction(s).

The issuer may use this chargeback when the cardholder contacted the issuer alleging all of

the following:

Dual Message System Chargebacks

Fraud-related Chargebacks

Chargeback Guide • 13 December 2018

• The cardholder was still in possession and control of all valid cards at the time of the

transaction

• The cardholder admits to at least one legitimate face-to-face transaction

• The cardholder denies making one or more additional face-to-face transactions at that

same merchant location

The transactions being denied by the cardholder must have occurred within 15 minutes of the

legitimate face-to-face transaction.

An issuer must not submit a chargeback using this message reason code for any of the

following:

• Non–face-to-face Transactions.