Chargebacks are a common occurrence in the world of online payments. They occur when a cardholder disputes a transaction with their bank or card issuer, and the bank or card issuer reverses the transaction, returning the funds to the cardholder. Chargebacks can be initiated for a variety of reasons, including fraud, goods not received, or items received that are not as described. Mastercard, like other card issuers, has established specific chargeback time limits to help merchants and cardholders resolve disputes in a timely manner. In this article, we’ll provide a complete guide to Mastercard chargeback time limits.
Mastercard Chargeback Reason Codes
Before diving into the chargeback time limits, it’s important to understand the reason codes that Mastercard uses to categorize chargebacks. Mastercard chargeback reason codes are three-digit numbers that indicate the reason for the chargeback. Some of the most common reason codes include:
- 4837: Fraudulent Transaction – Card Present Environment
- 4840: Fraudulent Transaction – Card Absent Environment
- 4855: Non-Receipt of Goods or Services
- 4863: Cardholder Dispute
- 4870: Chip Liability Shift
Understanding these reason codes can help merchants better respond to chargebacks and improve their overall chargeback management strategy.
Mastercard Chargeback Time Limits
Mastercard has established chargeback time limits for each reason code to ensure that disputes are resolved in a timely manner. The time limits vary depending on whether the transaction was made in a card-present or card-not-present environment. Here are the chargeback time limits for some of the most common reason codes:
- Reason Code 4837: Fraudulent Transaction – Card Present Environment
The chargeback time limit for this reason code is 120 calendar days from the transaction processing date.
- Reason Code 4840: Fraudulent Transaction – Card Absent Environment
The chargeback time limit for this reason code is 120 calendar days from the transaction processing date.
- Reason Code 4855: Non-Receipt of Goods or Services
The chargeback time limit for this reason code is 120 calendar days from the expected delivery date or the date the cardholder became aware that the goods or services would not be provided.
- Reason Code 4863: Cardholder Dispute
The chargeback time limit for this reason code is 120 calendar days from the transaction processing date.
- Reason Code 4870: Chip Liability Shift
The chargeback time limit for this reason code is 120 calendar days from the transaction processing date.
It’s important to note that these time limits are subject to change, so merchants should stay up to date with Mastercard’s chargeback policies to ensure that they are in compliance.
Responding to Chargebacks
When a merchant receives a chargeback, they have the opportunity to respond and dispute the chargeback. The response window varies depending on the reason code and can range from 10 to 45 calendar days from the chargeback issuance date. Merchants should respond to chargebacks in a timely manner and provide as much evidence as possible to support their case.
Conclusion
Mastercard chargeback time limits are an important part of the chargeback process. Merchants should be aware of these time limits and respond to chargebacks in a timely manner to avoid unnecessary losses. By understanding the reason codes and chargeback time limits, merchants can improve their chargeback management strategy and reduce the risk of chargebacks in the future.