|This article will guide you through understanding some of the top reasons for customer chargebacks. This will show possible reasons why customer is disputing the charge, the documentation needed/used to send back to the bank, and a brief explanation of what the card companies are looking for and why.
Reasons For Chargebacks
4. Card Not Present - Potential Fraud / Fraudulent Transaction - No Cardholder Authorization
VISA Reason Code: 0083
MasterCard Reason Code: 4837
Discover Reason Code: 7030Most Common Reasons:
- Member does not recognize the charge
- Member believes the membership is cancelled
- Member used another person's card to purchase membership (spouse, parent or significant other is primary cardholder)
- Member is unaware of recurring billing
- A change in the billing description on the CC statement, due to a change in billing services
- Cardholder's information from the club does NOT match the bank's information
Documentation proving the club was authorized to take payment:
- Signed agreement
- Check In History and/or Booking Log
- Club notes showing communication between staff and member
- Email correspondence
- Since the payments for the membership are automatically drafted, this is considered a Card Not Present transaction.
- It is easy for members to consider this fraudulent, because they weren't present when payment was deducted.
- It is more difficult for the club to win the dispute as well, since the member can maintain revocation, meaning they did not approve the charge, regardless of the contract policies.
- Make sure the member is the cardholder or an authorized user, and that personal information is correct and verified.
- This reason code requires more communication documented, to disprove fraud. Good club notes and a well written contract are key to winning the chargeback.
5. Credit Not Processed
VISA Reason Code: 0085
MasterCard Reason Code: 4860
Discover Reason Code: 8002Most Common Reasons:
- Member is expecting a refund/credit but it is not reflected on CC statement
- Member believes the agreement was cancelled
- Amount of the charge is incorrect, or member was expecting a credit for the difference
- Agreement was previously frozen and reinstated without the member's knowledge
- Member did not properly follow cancellation policy
Documentation needed to show why credit is not due:
- Signed agreement
- Check In History and Booking Log
- Signed cancellation (or freeze, if applicable) form
- Email correspondence between club and member regarding cancellation
- Rescission letter and certified tracking information, and a copy of
the dated post mark
- Club notes showing
member and club communication regarding cancellation reasons and terms
- Medical or
relocation documentation, and date of receipt
- This reason code is very similar to Cancelled Recurring Transaction, but it implies the member is aware of charge and has attempted to
reconcile with the club, with no result
- The dispute rights are more relaxed than Cancelled Recurring
Transaction, but is still difficult to win without proper documentation. The more often policies are discussed and
communication is in writing, the better our chances to win.
- Check In History and Booking Logs are the best documentation, and show the member used the services.
- Emails and club notes are good ways to show the merchant was actively
advising member of policies, and attempting resolution to issues.
6. not As Described Or Defective Merchandise / Quality Of Goods And Services Dispute
VISA Reason Code: 0053
MasterCard Reason Code: 4853
Discover Reason Code: 4553Most Common Reasons:
- Member was
not satisfied with the club's amenities
- Personal Training
sessions or Classes were unsatisfactory
- Member did
not agree with policies in membership
- Terms and policies
in contract were not sufficiently explained at time of purchase
- Billing terms were
not adequately explained
Documentation needed to defend merchandise / goods and services:
- Signed agreement
- Signed cancellation and/or freeze forms
- Email documentation showing
communication, explaining the services provided and/or terms of the
- Club notes documenting
verbal and/or face to face communication with member, advising of policies in
contract; or attempting to resolve issues with goods and services (PT sessions
- Even though the policy is disclosed in the contract, members often misunderstand it is their responsibility to
schedule the classes and they are charged regardless of whether or not they use the services.
- Showing the CC company proof of usage and/or that the
member signed off on the policy is important to prove they are responsible for the charge.
- Documentation is important to prove the club attempted to
clear up any confusion to the terms of the membership, as well as take step to
problems with services provided.