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Mastercard revises dispute processing and chargeback rules

Card Present / Card-Not-Present / eCommerce


The Change: Mastercard is announcing a summary of chargeback rules changes, as well as rules and procedural changes to the arbitration and compliance case filing process. These revisions will enhance the integrity of the dispute process, reduce complexity and shorten dispute resolution timeframes. Additional information relating to the specific revised rules and standards associated with these changes will be provided in a future announcement. For more information related to these revisions, click learn more below.


The Impact: All Merchants


The Timing: October 12, 2018



Effective as of October 12, 2018:

  • For chargeback reason code 4837 (No Cardholder Authorizations) second presentments, new information such as a merchant name, location, or dates will no longer be allowed as a potential remedy to this chargeback when a merchant’s information is a complete mismatch between the authorization and clearing.
  • For late presentments:
    • The Late Presentment chargeback rights and language will be moved from chargeback reason code 4834 (Point of Interaction Errors) to reason code 4808 (Authorization-related Chargebacks). Reason code 4808 (Authorization-related Chargebacks) addresses disputes involving the timeliness of the presentment in relationship to the authorization.
    • Reason code 4842 (late presentment) will be invalid
  • Supporting documentation such as a cardholder letter or email is required for chargeback reason code 4863 (Cardholder Does Not Recognize). Documentation must be a direct result of cardholder communication. Expedited Dispute Resolution forms will not be allowed.
    • For Digital Goods, supporting documentation is required to support the reason for the disputes.
    • For cancelled Recurring Payments, supporting documentation is required in the first chargeback even if there was a previous chargeback with the same PAN (primary account number) and merchant combination disputing a cancelled recurring payment. The documentation may be either new documentation or the documentation provided in the referenced previous chargeback.
  • Dispute documentation such as the cardholder’s final bill or receipt is required for reason code 4834/4831 (Point of Interaction [POI] Error Family-Incorrect Transaction Amount/Transaction Amount Differs).
  • The following pre-compliance and compliance case filing reasons will no longer be allowed and will be removed from Chapter 5 of the chargeback guide:
    • SecureCode (outside of a rejected transaction)
    • Coutnerfeit Goods
    • Timeframe Extensions
  • Pre-compliance is required prior to escalation as a compliance case for ALL applicable compliance filing reasons, cases, products, or transaction types (excluding Fee Collection dispute situations).
  • The pre-compliance and compliance case filing timeframes will be reduced from 180 days to 120 days from the central site processing or violation date, or 45 days from the chargeback rejects or fee collection date for escalated compliance cases.


Additional changes are effective April 12, 2019

  • Dual Message processed chargebacks will change from three cycles to two cycles when the arbitration cycle is removed. Arbitration chargebacks will not be allowed, and applicable documentation requirements will be moved to the first chargeback cycle. This will exclude some Fraud and Cardholder Dispute reason code dispute situations, such as with progressive letters and expert opinion letters, which will be required as part of the pre-arbitration rules and processes.
  • Pre-arbitration is required for the following reason codes prior to escalating as an arbitration case filing:
    • Fraud (excluding chip 4870/70 and 4871 chip/PIN liability shift chargebacks)
    • Cardholder Disputes
    • POI Errors
  • The first chargeback timeframes will be reduced from 120 days to 90 days for reason code 4834 (Point of Interaction [POI] Error Family) disputes. POI Error related chargebacks involving ATM transactions will remain at 120 days. Fraud, Authorization-related and Cardholder Disputes chargeback timeframes remain unchanged.
  • Unjust enrichment associated with credits issued before or after a chargeback or after a second presentment will not be allowed via a pre-compliance or compliance case, and must be resolved via the chargeback management process and within chargeback timeframes.
  • Chargeback rights for reason code 4840 (Fraudulent Processing of Transactions) will be eliminated and invalid.


Additional future changes:

  • Tentatively effective between July 12, 2019 and October 18, 2019, Chargeback rights for reason code 4863 (Cardholder Does Not Recognize) will be eliminated and invalid. The new dispute process and exact effective date will be published in a future announcement.
  • Tentatively effective on October 18, 2019, Mastercard will align Single and Dual Message chargeback rules (reason codes, timeframes, and brands) across all regions to the global chargeback consolidated family reason codes.

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