Chargeback Management can be confusing.
The lack of consistency in how they are managed and ruled is one of the most difficult facets of handling your Chargebacks. This is because the process is drastically different depending on the Issuing card used. Knowing the differences in the Chargeback process of American Express, Visa, Mastercard, and Discover is vital to understanding and managing your chargebacks, and can even help you avoid them altogether.
Here I will go over the policies of American Express, how they are different from the other card brands, and full lists of Chargeback codes and reasons for Inquiry.
Understanding American Express
Unlike Visa and Mastercard- who rely on external Card Issuers such as Bank of America, Capital One, and Chase- American Express functions as a Card Issuer and Network which means they don’t have anyone contact the merchant on their behalf.
Chargeback Process
There are a few things unique to American Express in the way they handle the chargeback process:
- They do almost everything internally. Since they don't provide services through card issuers there's no go between with the issuer and they are much more involved, handling everything directly
- American Express will sometimes send an "inquiry" to get more information before escalating to a chargeback. this can give you a better chance of avoiding an unnecessary chargeback.
When American Express receives a chargeback from a cardholder they will:
Usually, American Express can settle all transaction disputes based on in-house information. In the rare situations where the financial institution doesn’t have the necessary information, an inquiry will be issued to the merchant.
The merchant can respond in one of four ways:
- Authorize the chargeback.
- Issue a credit or supply evidence of a previously-issued credit.
- Issue a partial credit (and evidence to support the reduced refund amount).
- Provide sufficient evidence to validate the original charge. To validate the charge, the merchant will need to provide sufficient evidence.
There are several reasons why American Express might send an inquiry. The following table lists the inquiry reasons and the suggested documents you should send in response.
Four outcomes are possible when merchants are issued inquiries:
- The inquiry response successfully settles the dispute in the merchant’s favor.
- A chargeback is issued because the merchant failed to respond to the inquiry or didn’t reply within the time limit.
- A chargeback is issued because the merchant replied to the inquiry with inaccurate or insufficient documentation.
- A chargeback is issued because the merchant authorized it.
If American Express does not need to gather more information in most cases they will issue an Immediate Chargeback.
Generally speaking, a Chargeback is a final ruling and there are no chances to remove it unless you submit a “Chargeback Reversal”
If you submit a reversal and your reasoning is compelling, American express may opt to remove it on your behalf. This is not generally the case, so it’s very important to PREVENT the Chargeback from happening at all.
American Express Chargeback reason codes
Here is a complete list of the reason codes that a cardholder can use when disputing a charge.
American Express Chargeback reason codes are divided into four main categories and always include a class letter, plus a two-digit number (e.g. C03):
Issues in this category: when the charged amount is larger than the authorization amount on a card, when there is no valid authorization or when the authorization approval has expired.
Issues in this category: when a card number hasn’t been assigned, issues with a credit being processed as a charge (or a charge being processed as a credit), when the wrong amount is charged or when there is an inconsistency in the currencies used.
Issues in this category: cards not being processed, merchandise or services being returned, refused, not as described, damaged, canceled or partially received.
Issues in this category: missing imprints, missing signatures, expired or invalid cards, when cards aren’t present during a purchase or when there is no cardholder authorization.
Preventing chargebacks
Here are four tips straight from American Express you can take to help lower the number of Inquiries you receive and reduce the number of chargebacks:
1. Always get an authorization approval code
a. Without it, it is very difficult to support your position if a Cardmember claims a transaction is fraudulent.
2. Respond to Inquiry letters on time
a. If you wish to contest a Cardmember claim, you must send us supporting material that resolves the dispute by the date displayed on the Inquiry letter.
3. Follow Card acceptance procedures accurately
a. Always get the Cardmembers name as it appears on the Card, the Card number, and expiry date. If the Cardmember is not present, verify the address with American Express.
4. Pay special attention when taking orders by telephone, mail order or the internet
a. If you accept such charges, the precise procedures outlined in the Merchant Agreement should be followed and a greater degree of caution should be exercised.
9 Comments
Learn everything you need to know about managing disputes, including how the process works and tips for avoiding disputes in the first place. A dispute occurs when a Card Member contacts American Express to question a charge on their statement that they don’t recognise. A chargeback occurs when, after investigation of the dispute, we debit your account for the amount of the disputed transaction and credit the Card Member with this amount. There are simple steps you can take to minimise the chances of a dispute and chargeback happening.
Awesome post! Keep up the great work! 🙂
Great content! Super high-quality! Keep it up! 🙂
Thank you!
Very shortly this web page will be famous amid all blogging viewers, due to it’s good articles or reviews
Thank you for sharing your info. I truly appreciate your efforts
and I will be waiting for your next write ups thanks once again.
I’m excited to uncover this great site. I wanted to thank you for your time for this
particularly wonderful read!! I definitely appreciated every bit of it and
I have you book-marked to check out new information on your blog.
Wow, superb blog layout! How long have you been blogging for?
you make blogging look easy. The overall look of your website is wonderful, let alone the content!
I like the valuable information you provide to your articles.
I’ll bookmark your blog and test once more right here frequently.
I am slightly certain I’ll be informed a lot of new stuff proper here!
Good luck for the following!
Comments are closed for this article!