The clock is ticking, again! Visa made changes in its time limits in April 2018 (view details here). But MasterCard chargeback time limits are just as important. And cardholders, issuers, acquirers, and merchants all must comply with these time limits. Each reason code has its own conditions that affect the chargeback process. So it's crucial to have this information upfront, so that you don't lose time in gathering compelling evidence.
This post has aggregated information from MasterCard's Chargeback Guide. Along with other merchant rules, this post also has details of the time limits associated to the chargeback reason codes. Now, some of these reason codes have conditions that can impact the timeframe. You'll be able to spot these reason codes with an asterisk (*). They'll be described in greater detail below the table. Let's see what we're working with.
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MasterCard Chargeback Time Limits
The chargeback process remains the same across the major card networks. And each network has their own way of describing this process. However, these differences are like how two friends describe a movie. One friend will go into great length in explaining how this movie is amazing. The other friend may describe the movie in two words: 'It's amazing'. So, MasterCard describes the chargeback process as:
A dispute resolution process that is used to determine the responsible party in a chargeback-related dispute. The process has three cycles in which stakeholders can resolve the dispute amongst themselves. If they do not resolve the case within these three cycles, the case must be sent to arbitration. In arbitration, MasterCard becomes the decision maker.
Here are the three cycles that must be carried out before a dispute reaches arbitration:
- First chargeback - submitted by the issuer to dispute a transaction
- Second presentment - submitted by the acquirer to refute the issuers first chargeback
- Arbitration chargeback - submitted by the issuer when the evidence provided by the acquirer in the second presentment is deemed insufficient
Now, here are MasterCard's reason codes and its affiliated time limits. Notice how the issuer and the cardholder have more leniency. If only acquirers and merchants had the same time limits.
|Reason Code Description||Time Limit (Issuer)||Time Limit (Acquirer)|
|4807||Warning Bulletin File||45||45|
|4812||Account Number Not on File||45||45|
|4831||Transaction Amount Differs||120||45|
|4837||No Cardholder Authorization||120||45|
|4840||Fraudulent Processing of Transactions||120||45|
|4841||Canceled Recurring or Digital Goods Transactions||120||45|
|4846||Correct Transaction Currency Code Not Provided||120||45|
|4849||Questionable Merchant Activity||120||45|
|4850||Installment Billing Dispute||120*||45|
|4853||Cardholder Dispute -
Not as Described or Defective Merchandise
|4854||Cardholder Dispute - Not Elsewhere Classified (U.S. Region Only)||60 or 120*||45|
|4855||Goods or Services Not Provided||120*||45|
|4859||Addendum, No-show, or ATM Dispute||120||45|
|4860||Credit Not Processed||120*||45|
|4863||Cardholder Does Not Recognize - Potential Fraud||120||45|
|4870||Chip Liability Shift||120||45|
|4871||Chip/PIN Liability Shift||120||45|
|4999||Domestic Chargeback Dispute (Europe region Only)||120||45|
Here are the conditions that affect MasterCard reason codes 4850, 4855 and 4860.
MasterCard Chargeback Reason Code 4850 Time Limit Modifiers
Chargebacks filed under reason code 4850 must be processed either:
- 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 goods or services
MasterCard Chargeback Reason Code 4854 Time Modifiers
There are two limits to file a chargeback under reason code 4854. It must be processed either:
- 60 calendar days after first learning about the dispute from the cardholder
- 120 calendar days of the Central Site Business Date
MasterCard Chargeback Reason Code 4855 Time Limit Modifiers
Reason code 4855 chargebacks must be processed within 120 calendar days from the settlement date. Or it must be processed in the latest anticipated date that the goods or services were to be provided. However, there are adjustments that can be made based on circumstances. This includes:
- Cases that involve interruption of ongoing services, 120 calendar days from 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.
- Cases that involve the purchase of a merchant-branded prepaid gift card without an expiration date printed on the card. It also applies to merchants who subsequently go out of business. Both cases require the chargeback to be processed 540 calendar days from the Central Site Business Date of the first presentment.
- Cases that involve the purchase of a merchant-branded prepaid gift card with an expiration date printed on the card. This also applies to merchants who subsequently go out of business. Bot cases require the chargeback to be processed 120 calendar days from the expiration date printed on the card.
In addition, the issuer's timeframes adjust based on the presence of specific circumstances:
- The issuer must wait 30 calendar days from the transaction date before submitting a chargeback. This is only when the delivery or performance date was not specified
- The issuer can chargeback the transaction earlier than 30 calendar days. But that's only if those 30 days cause the issuer to exceed the 120 calendar day timeframe.
- The issuer may charge back the transaction immediately upon learning the merchant will not provide the goods or services. For example, the merchant may no longer be in business.
What About Visa Chargeback Time Limits?
Never fear. The answer you're looking for is right here. You'll be able to have all information about Visa's timeframes and conditions that affect some reason codes. You can also download our encyclopedia here and learn the time limits set by all four major card networks. It also informs you of the inquiry reason codes and ticket retrieval requests from American Express and Discover.
MasterCard Chargeback Reason Code 4860 Time Limit Modifiers
Once again, the issuer's timeframes can adjust based on the following:
- The issuer can immediately chargeback 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
- The issuer must wait 15 calendar days from one of the following:
- The date on the credit documentation
- The date goods were returned
- The date services were cancelled
- The issuer may chargeback the transaction earlier than the 15 calendar days. But that's only if those days cause the issuer to exceed the 120 calendar day time frame.
MasterCard reason code 4860 chargebacks can be processed within 120 calendar days from the day the service was canceled or the goods were returned. Or it can be processed 120 calendar days from the transaction date for a VAT credit. However:
- If the credit documentation is dated, the 120-day chargeback time frame counts the date on the credit documentation as day zero
- If 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 as day zero
- If the cardholder letter is undated, the chargeback time frame counts the receipt date of the documentation by the issuer as day zero