Posted by NationalACH on May 08, 2017
Tips for Dealing with Chargebacks- High Risk Merchants

Chargebacks are the Achilles heel of the payments industry. An unfortunate price paid by merchants to offer their customer ease and convenience. Depending on the nature of the business, high risk payments could be unavoidable. However, there could be a lot you can do to reduce the risk involved with such payments.

Before you can tackle this endemic issue you must understand it. So, here are the most common reasons for chargebacks and what you can do to mitigate problems with high risk payments.

Reasons for Chargebacks

The reasons for chargebacks could differ based on the industry and the nature of the business. Nevertheless, issuing banks tend to see some chargeback reason codes turn up more frequently than others. Here are some of the most common reasons for chargebacks across the payments landscape:

Fraudulent transaction (Visa 83, Mastercard 4837): The name may suggest the card was used fraudulently, but sometimes the cardholder simply refuses to give full authorization for the purchase. This may happen when a family member has used the card inadvertently.

Products or services not as described (Visa 53, Mastercard 4853): A code signifying the wrong item was sent, items were damaged during shipment or were not as per the retailer’s description.

Cardholder doesn’t recognize the transaction (Visa 75, Mastercard 4863): Usually a case of the customer either forgetting or not recognizing the merchant’s name on their bank statement.

Services not rendered or merchandise not received (Visa 30 Mastercard 4855): A case of the merchant not delivering the product or the cardholder being billed before the item was delivered.

Credit not processed (Visa 83, Mastercard 4837): This is a tricky code. It usually signifies the customer  did not receive a refund after return.

Duplicate processing (Visa 82, Mastercard 4834): Multiple batches of transactions for the same item.

Transaction amount differs from the agreed upon amount (Visa 80, Mastercard 4831): A disparity between the transaction amount and the amount agreed with the customer can usually boil down to miscommunication or human error.

Cancelled recurring transaction (Visa 41, Mastercard 4841): Cardholder charged despite cancelling a recurring transaction.

These are some of the most common reasons for chargebacks. As a merchant, you may need to study the issues carefully, try to prevent them, and take the necessary precautions while dealing with high risk payments that have the potential to fit into one of these categories.

Tips for Dealing with Chargebacks

Getting the exact reason or a better explanation for a particular chargeback could prove tricky. Issuing banks are usually protective of their client’s interests and privacy laws prevent them from giving too much information.

So, the best you can do is prevent chargebacks by following a few simple tips:

  • Follow all the protocols laid out by the card processors.
  • Use a better descriptor so that your clients can instantly recognize your transactions on their credit card statement.
  • If possible, get your clients to sign a contract laying out the terms of the arrangement clearly.
  • Deal with customer services issues as quickly as possible to prevent dissatisfied customers approaching their issuing banks.
  • Look for red flags that can indicate a fraudulent transaction.
  • Train your employees to keep a track of every transaction, store all the details, and identify fraud effectively.
  • Find the best merchant account provider. National ACH provides sophisticated tools that can help you prevent chargebacks and detect fraud.


Chargebacks and high risk payments are a part of doing business. It’s the price you pay for offering your customers a convenient payment method. However, these costs can stack up over time and have a substantial impact on your business. Take the time to understand the issue and weed out inefficiencies in your payment structure. Reach out to a high quality merchant account provider that can equip your business with the right tools to mitigate the risks of fraudulent transactions and minimize chargebacks.  

Do you need expert assistance to deal with high risk payments?

Try a free demo and see what National AC can do for your business.