At ClearSale, we go beyond reason codes. To guarantee the quality of our solution’s feedback, we classify every chargeback by labeling the cardholder in one of four categories.
Criminal Fraud
This is what we think of most often when we think of chargebacks. Criminal fraud occurs when someone uses another person’s payment card information without authorization.
Consumer Disputes
Customers may dispute charges on their statements, even when the charges are genuine. Sometimes consumer disputes are deliberate attempts at fraud and other times they arise from honest mistakes. We call this “friendly fraud.”
Authorization Issues
Authorization problems happen when businesses fail to get the proper authorization for a transaction, don’t submit a valid authorization approval or fail to provide a verifiable authorization.
Processing Errors
When a consumer believes a business didn’t hold up their end of the deal, it’s considered a processing error. For example, a cardholder authorizes a transaction, but the promised goods never arrive. Or a cardholder cancels a recurring transaction, but the business fails to process the cancelation. Or a business doesn’t issue a refund after a return. And the list goes on.
Related Topics
False Declines & Approval Rates
Related Sources
Understanding Credit Card Chargeback Reason Codes
Is Your Chargeback Rate Accurate?
The Ultimate Guide to Debit Card Chargebacks