What Causes Disputes? (Hint: Might Be One of Your Teams)

Alex ForbessChargeback BasicsLeave a Comment

What Causes Disputes_ (Hint_ Might Be One Of Your Teams)

Where do disputes come from? There’s more than one answer to this question. If you’re having trouble with chargeback fraud, friendly fraud or true fraud such as ID fraud, we recommend that you read its associated posts. However, there’s another source that causes disputes. And it’s somewhere within your business. Our mission is to point you in the right direction in knowing the causes of your disputes.

But be prepared to look at disputes in a different lens. The card networks offer four reason code categories that show disputes being caused by Fraud, Authorization, Processing Errors and Consumer Disputes. We added a twist by showing five categories that causes disputes. This included Fraud / No Authorization, Cancel Recurring Billing, Products / Services, Liability Shift and Miscellaneous. Here, we’re showing the causes of disputes within your business. This will focus on how Customer Service, Shipping/Logistics, Finance/Accounting, and Sales/Marketing can cause disputes.

To be clear, these categories are not presented in a chronological order, especially since disputes can originate anywhere at any time. After explaining each cause, we’ll show you the reason codes that are closely associated to it. It’ll be listed under each team you see below. Keep in mind that some reason codes are listed under more than one team. Feel free to click on each code to know how to respond and what evidence is needed to disprove a dispute. That being said, here is where you can find (internal) dispute causes.

Your Teams

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Customer Service

First of all, let’s start by looking at a team that’s on the forefront of dispute resolution. Here, customer service includes teams who are responsible for phone calls, online chats and social media strategies that prevent disputes. Their the responsibilities remain the same whether you use a mixture of online/offline channels:

Customer service is initially the first team who tries to resolve disputes. Some example include handling product returns, refunds and reassuring quality in the goods/services.

The customer claims that customer service wouldn’t accept returns or issue refunds. Unfortunately, some customers may still feel compelled to dispute a transaction. Their claim may be legitimate, or it may be fraudulent. The fact is these disputes attempt to critique how customer service tried (or didn’t try) to resolve it. Here are some dispute causes that are tied to customer service:

  • The goods/services did not meet the expectations of the customer, and customer service did not attempt to resolve the issue
  • The customer service team did not have authorization to charge the customer
  • The customer argues that customer service misrepresented the goods/service with false or superfluous information

Here are the reason codes that are closely associated to this team:

How Customer Service Causes Disputes

American Express Discover MasterCard Visa
A01 Charge Amount Exceeds Authorization Amount AT Authorization Noncompliance 4808 Authorization-Related Chargeback 10.3 Other Fraud – Card-Present Environment
A02 No Valid Authorization 05 Good Faith Investigation 4853 Cardholder Dispute 10.4 Other Fraud – Card-Absent Environment
C04 Goods/Services Returned or Refused AP Recurring Payments 4841 Cancelled Recurring Transaction 11.1 Card Recovery Bulletin or Exception File
C05 Goods/Services Cancelled RM Cardholder Disputes Quality of Goods or Services 4854 Cardholder Dispute—Not Elsewhere Classified (U.S. Region Only) 11.2 Declined Authorization
C08 Goods or Services Not Received or Only Partially Received 4855 Goods or Services Not Provided 11.3 No Authorization
C28 Cancelled Recurring Billing 13.1 Merchandise/Services Not Received
C31 Goods/Services As Described 13.2 Cancelled Recurring
C32 Goods/Services Defective or Damaged 13.3 Not As Described or Defective Merchandise/Services
F10 Missing Imprint 13.7 Cancelled Merchandise/Services
F24 No Card Member Authorization 13.8 Original Credit Transaction Not Accepted

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Your delivery method must run efficiently, and your policies must have clear descriptions of the process. In other words, your policies must describe how purchased goods will be shipped and delivered. This applies to physical and digital goods. However, shipping and logistics can another source that causes disputes. This may occur due to inefficient delivery or insufficient evidence that’s attached to your response. Here are some scenarios that causes disputes from shipping and logistics:

  • The customer claims the goods have not arrived to their shipping address. This can involve a physical or a digital good.
  • The shipped goods are either damaged or defective, and the customer claims the merchant did nothing to resolve it
  • The purchased goods arrived at the shipping address, but at a much later time than it was mentioned in the policy. The customer claims they didn’t receive any update of the delayed service.

These are three common scenarios that causes disputes. And it can extend to your third-party carrier, such as FedEx. As a result, a dispute is filed if there are alleged mishaps with delivery. These are some dispute reason codes affiliated to this team:

How Shipping/Logistics Causes Disputes

American Express Discover MasterCard Visa
C31 Goods/Services As Described RG Non-Recipient Goods of Goods, Service, or Cash 4853 Cardholder Dispute 13.1 Merchandise/Services Not Received
C32 Goods/Services Defective or Damaged RM Cardholder Disputes Quality of Goods or Services 4854 Cardholder Dispute—Not Elsewhere Classified (U.S. Region Only) 13.3 Not As Described or Defective Merchandise/Services
4855 Goods or Services Not Provided

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We can’t stress enough how good record keeping is essential for your business. You may rely on a software or a team of accountants to keep your records straight. It doesn’t change the fact that inconsistent records can create a domino effect of disputes. For example, outdated spreadsheets show a customer enrolled in recurring billing. But the dispute claims the customer cancelled this subscription well over a month a go. Therefore, the customer will have enough ammunition to request a chargeback.

There are other scenarios that causes disputes. Here are some examples that arise from finance and accounting:

  • The records may show the merchant charged the customer more than the agreed transaction amount.
  • Inconsistent data may have convinced the merchant to charge the customer twice in order to earn the original transaction. But the customer has the descriptors, and transaction amount, to show the original transaction was already processed.
  • The previous spreadsheets were not regularly updated with the new ones. As as result, the merchant generated improper invoices that showed errors in the transaction amount, order details and customer profile.

Some causes can be connected to this team even if they don’t have direct involved in the dispute. Inconsistent data may have come from defective POS terminals. As a result, finance and accounting may have kept inconsistent records. It’s not uncommon to see disputes being caused by more than one team. It’s times like that call for a new tool in automated dispute management. Nonetheless, here are some dispute reason codes you should be aware of:

How Finance/Accounting Causes Disputes

American Express Discover MasterCard Visa
P01 Unassigned Card Number IN Invalid Card Number 4812 Account Number Not On File 12.1 Late Presentment
P03 Credit Processed As A Charge LP Presentment 4834 Point-of-Interaction Error 12.2 Incorrect Transaction Code
P04 Charge Processed As A Credit 4831 Transaction Amount Differs 12.3 Incorrect Currency
P05 Incorrect Charge Amount 4842 Late Presentment 12.4 Incorrect Account Number
P07 Late Submission 4846 Correct Transaction Currency Code Not Provided 12.5 Incorrect Amount
P08 Duplicate Charge 4850 Installment Billing Dispute 12.6 Duplicate Processing/Paid By Other Means
P22 Non-Match Card Number 4999 Domestic Chargeback Dispute (Europe Region Only) 12.7 Invalid Data
P23 Currency Discrepancy

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These two teams are perhaps the most interdependent while some businesses treat them separately. Marketing may focus on lead generation while sales focuses on closing deals. But both teams are determined to retain customers during and after the transaction lifecycle. Things may run smoothly either collectively or separately in each team. That still may not be enough to deter valid and invalid disputes alike.

The dispute itself will vary since it depends on the situation and the customer. But these disputes often focus on one particular theme:

The good/services were misrepresented by sales and/or marketing. Some examples include false advertisement, omission of terms and conditions, and incorrect product descriptions.

In other words, sales and marketing need to be honest and transparent with the customer. And they must adapt communications accordingly online, in-person and in written form. There are some dispute reason codes you can connect to sales and marketing. And here they are:

How Sales/Marketing Causes Disputes

American Express Discover MasterCard Visa
C31 Goods/Services As Described RM Cardholder Disputes Quality of Goods or Services 4853 Cardholder Dispute 13.3 Not As Described or Defective Merchandise/Services
C32 Goods/Services Defective or Damaged 4841 Cancelled Recurring Transaction 13.5 Misrepresentation
4854 Cardholder Dispute—Not Elsewhere Classified (U.S. Region Only) 13.7 Cancelled Merchandise/Services

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I’ve Found The Cause. What’s The Solution?

Now, you’re playing defense. You’ll need to gather compelling evidence for each dispute. You’ll be able to know which evidence is needed by clicking on each link above. The categories above are another lens that show you what causes disputes. This also gives you an opportunity to run a brief audit with your teams, regardless if a dispute is valid or invalid.

But knowing the causes of disputes is only half the battle. The best kind of solution is giving merchants tailored information for an effective dispute response. That will save you time in searching for the most compelling evidence to strengthen your case.

We Call This Real-time Resolution

Why wait to receive a dispute when you can disprove it in real-time? The Chargeback App automatically gives issuers and customers the data they need to prevent disputes from becoming chargebacks. This includes elements like order details, customer data and delivery information. Real-time Resolution not only saves you and your team time. It repurposes it for future goals in customer service, shipping, accounting, sales and marketing. Let us breakdown the other features that support Real-time Resolution.


There’s no need to ‘copy+paste’ when your SaaS can aggregate data that’s related to the disputed transaction. That’s the benefit of DataSync. It allows the App to seamlessly integrate with multiple data sources, which include processors, gateways and sales data. And the best part is that there’s no need for multiple logins. The Chargeback App will connect and save login information of all the merchant’s accounts. We give huge credit to our development team for making the App capable supporting DataSync.


The Chargeback App offers uses automation in several ways. One of which is document generation (i.e., DocGen). Basically, the App generates a response that adhere to the card networks’ rules. While it’s always beneficial to know the meaning of reason codes, DocGen is continuously updated to tailor each response to a given reason code. In other words, you won’t waste time researching a reason code while crafting the written response.


Responses often rely on more than data sources. And it will always include your payment processor. The Chargeback App lets merchants send documents automatically to their processors. You won’t have to worry documents being sent improperly. After all, the App send documents accordingly to the card brand’s guidelines.

Bottom Line

Transactions are being processed automatically. It’s illogical for you and your teams to fight disputes manually. Furthermore, it’s more beneficial to have automated dispute management in-house, rather than from a third-party.


Time is a factor. And who knows your customer’s better than yourself? A third-party may seem like a time saver. But it’ll require another team to commit time in learning the causes of your disputes. You may already know the answer before your third-party. Therefore, it’s best to equip you and fellow merchants with the right tools for dispute management. We’re glad to fulfill this need while offering more advice on Our Blog.

Before you bounce, feel free to look at the features of the Chargeback App. You can also contact us to learn more about how Real-time Resolution works. And feel free to check our prices before you embrace the App. You can always request a demo when you’re ready to experience Real-time Resolution.

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