A chargeback happens when a payment made by a guest is reversed, and the card issuer sends the funds back to the guest’s original payment method.
Chargeback representment is the process where merchants present evidence to issuing banks to fight chargebacks. If the evidence is strong enough, the chargeback is reversed. You have 15 days to initiate a representment request from the first day a chargeback is filed.
During a chargeback, you cannot process a refund in Guesty or through the payment processor. If you decide to refund the guest, agree to the chargeback instead.
It may take up to 2 days for a chargeback to sync and appear on the reservation page in Guesty.
Important:
When a payment processor (such as Stripe or GuestyPay) handles a dispute, the final amount pulled from the merchant's account is determined by the guest's issuing bank. There are two primary reasons for a difference in totals: currency fluctuation and partial disputes.
Common reasons for chargebacks
Chargebacks can occur for many reasons. The main reasons include:
- Customer disputes
- A guest not receiving a refund
- Friendly fraud
- Buyer identity fraud
Major credit card brands list over 100 reason codes. Identify and understand the reason for each chargeback, and take the necessary steps to dispute the chargeback.
| Card Network | Category | Code | Description |
|---|---|---|---|
| Visa | Fraud | 10.1 | EMV Liability Shift Counterfeit Fraud |
| Visa | Fraud | 10.2 | EMV Liability Shift Non-Counterfeit Fraud |
| Visa | Fraud | 10.3 | Other Fraud — Card Present Environment |
| Visa | Fraud | 10.4 | Other Fraud — Card Absent Environment |
| Visa | Fraud | 10.5 | Visa Fraud Monitoring Program |
| Visa | Authorization | 11.1 | Card Recovery Bulletin |
| Visa | Authorization | 11.2 | Declined Authorization |
| Visa | Authorization | 11.3 | No Authorization |
| Visa | Processing Errors | 12.1 | Late Presentment |
| Visa | Processing Errors | 12.2 | Incorrect Transaction Code |
| Visa | Processing Errors | 12.3 | Incorrect Currency |
| Visa | Processing Errors | 12.4 | Incorrect Account Number |
| Visa | Processing Errors | 12.5 | Incorrect Amount |
| Visa | Processing Errors | 12.6.1 | Duplicate Processing |
| Visa | Processing Errors | 12.6.2 | Paid by Other Means |
| Visa | Processing Errors | 12.7 | Invalid Data |
| Visa | Consumer Disputes | 13.1 | Merchandise/Services Not Received |
| Visa | Consumer Disputes | 13.2 | Cancelled Recurring |
| Visa | Consumer Disputes | 13.3 | Not as Described or Defective Merchandise/Services |
| Visa | Consumer Disputes | 13.4 | Counterfeit Merchandise |
| Visa | Consumer Disputes | 13.5 | Misrepresentation |
| Visa | Consumer Disputes | 13.6 | Credit Not Processed |
| Visa | Consumer Disputes | 13.7 | Cancelled Merchandise/Services |
| Visa | Consumer Disputes | 13.8 | Original Credit Transaction Not Accepted |
| Visa | Consumer Disputes | 13.9 | Non-Receipt of Cash or Load Transaction Value |
| Mastercard | Authorization | 4808 | Warning Bulletin File |
| Mastercard | Authorization | 4808 | Authorization-Related Chargeback |
| Mastercard | Authorization | 4808 | Account Number Not on File |
| Mastercard | Authorization | 4808 | Required Authorization Not Obtained |
| Mastercard | Authorization | 4808 | Expired Chargeback Protection Period |
| Mastercard | Authorization | 4808 | Multiple Authorization Requests |
| Mastercard | Authorization | 4808 | Cardholder-Activated Terminal (CAT) 3 Device |
| Mastercard | Point of Interaction Error | 4834 | Point of Interaction Error |
| Mastercard | Point of Interaction Error | 4834 | Transaction Amount Differs |
| Mastercard | Point of Interaction Error | 4834 | Late Presentment |
| Mastercard | Point of Interaction Error | 4834 | Point-of-Interaction Currency Conversion |
| Mastercard | Point of Interaction Error | 4834 | Duplication/Paid by Other Means |
| Mastercard | Point of Interaction Error | 4834 | ATM Disputes |
| Mastercard | Point of Interaction Error | 4834 | Loss, Theft, or Damages |
| Mastercard | Fraud | 4837 | No Cardholder Authorization |
| Mastercard | Fraud | 4849 | Questionable Merchant Activity |
| Mastercard | Fraud | 4870 | EMV Chip Liability Shift |
| Mastercard | Fraud | 4871 | EMV Chip/PIN Liability Shift |
| Mastercard | Cardholder Disputes | 4853 | Cardholder Dispute of a Recurring Transaction |
| Mastercard | Cardholder Disputes | 4853 | Goods or Services Not Provided |
| Mastercard | Cardholder Disputes | 4853 | No-Show Hotel Charge |
| Mastercard | Cardholder Disputes | 4853 | Addendum Dispute |
| Mastercard | Cardholder Disputes | 4853 | Credit Not Processed |
| Mastercard | Cardholder Disputes | 4853 | Goods/Services not as Described or Defective |
| Mastercard | Cardholder Disputes | 4853 | Digital Goods $25 or less |
| Mastercard | Cardholder Disputes | 4853 | Counterfeit Goods |
| Mastercard | Cardholder Disputes | 4853 | Transaction Did Not Complete |
| Mastercard | Cardholder Disputes | 4853 | Credit Posted as a Purchase |
| Mastercard | Cardholder Disputes | 4854 | Cardholder Dispute Not Classified Elsewhere |
| Mastercard | Other | 4850 | Installment Billing Dispute (Participating Countries Only) |
| Mastercard | Other | 4999 | Domestic Chargeback Dispute (Europe Region Only) |
| American Express | Authorization | A01 | Charge Amount Exceeds Authorization Amount |
| American Express | Authorization | A02 | No Valid Authorization |
| American Express | Authorization | A08 | Authorization Approval Expired |
| American Express | Fraud | F10 | Missing Imprint |
| American Express | Fraud | F14 | Missing Signature |
| American Express | Fraud | F24 | No Card Member Authorization |
| American Express | Fraud | F29 | Card Not Present |
| American Express | Fraud | F30 | EMV Counterfeit |
| American Express | Fraud | F31 | EMV Lost/Stolen/Non-Received |
| American Express | Card Member Dispute | C02 | Credit Not Processed |
| American Express | Card Member Dispute | C04 | Goods/Services Returned or Refused |
| American Express | Card Member Dispute | C05 | Goods/Services Cancelled |
| American Express | Card Member Dispute | C08 | Goods/Services Not Received |
| American Express | Card Member Dispute | C14 | Paid by Other Means |
| American Express | Card Member Dispute | C18 | “No Show” or CARDeposit Cancelled |
| American Express | Card Member Dispute | C28 | Cancelled Recurring Billing |
| American Express | Card Member Dispute | C31 | Goods/Services Not as Described |
| American Express | Card Member Dispute | C32 | Goods/Services Damaged or Defective |
| American Express | Processing Error | P01 | Unassigned Card Number |
| American Express | Processing Error | P03 | Credit Processed as Charge |
| American Express | Processing Error | P04 | Charge Processed as Credit |
| American Express | Processing Error | P05 | Incorrect Charge Amount |
| American Express | Processing Error | P07 | Late Submission |
| American Express | Processing Error | P08 | Duplicate Charge |
| American Express | Processing Error | P22 | Non-Matching Card Number |
| American Express | Processing Error | P23 | Currency Discrepancy |
| American Express | Inquiry/Miscellaneous | R03 | Insufficient Reply |
| American Express | Inquiry/Miscellaneous | R13 | No Reply |
| American Express | Inquiry/Miscellaneous | M01 | Chargeback Authorization |
| American Express | Inquiry/Miscellaneous | M10 | Vehicle Rental - Capital Damages |
| American Express | Inquiry/Miscellaneous | M49 | Vehicle Rental - Theft or Loss of Use |
| American Express | Inquiry/Miscellaneous | FR2 | Fraud Full Recourse Program |
| American Express | Inquiry/Miscellaneous | FR4 | Immediate Chargeback Program |
| American Express | Inquiry/Miscellaneous | FR6 | Partial Immediate Chargeback Program |
| Discover | Fraud | UA01 | Fraud – Card Present Transaction |
| Discover | Fraud | UA02 | Fraud – Card Not Present Transaction |
| Discover | Fraud | UA05 | Fraud – Chip Counterfeit Transaction |
| Discover | Fraud | UA06 | Fraud – Chip and PIN Transaction |
| Discover | Fraud | UA10 | Request Transaction Receipt (swiped card transactions) |
| Discover | Fraud | UA11 | Cardholder Claims Fraud (swiped transaction, no signature) |
| Discover | Authorization | NA | No Authorization |
| Discover | Authorization | DA | Declined Authorization |
| Discover | Authorization | AT | Authorization Non-Compliance |
| Discover | Authorization | EX | Expired Card |
| Discover | Processing Errors | IN | Invalid Card Number |
| Discover | Processing Errors | LP | Late Presentation |
| Discover | Services | 5 | Good Faith Investigation |
| Discover | Services | AA | Does Not Recognize |
| Discover | Services | AP | Recurring Payments |
| Discover | Services | AW | Altered Amount |
| Discover | Services | CD | Credit/Debit Posted Incorrectly |
| Discover | Services | DP | Duplicate Processing |
| Discover | Services | IC | Illegible Sales Data |
| Discover | Services | NF | Non-Receipt of Cash from ATM |
| Discover | Services | PM | Paid by Other Means |
| Discover | Services | RG | Non-Receipt of Goods, Services, or Cash |
| Discover | Services | RM | Cardholder Disputes Quality of Goods or Services |
| Discover | Services | RN2 | Credit Not Processed |
| Discover | Other | DC | Dispute Compliance |
| Discover | Other | NC | Not Classified |
Refund not received by the customer
Provide refunds within three days of a guest’s request. If you do not grant the refund, the guest may submit a chargeback to receive their funds.
Friendly fraud
Friendly fraud occurs when a guest purchases a service or stay, then claims the money back in bad faith.
Buyer identity fraud
Buyer identity fraud happens when someone uses stolen payment information to make a booking. The fraud victim will submit the chargeback request. Their credit card will be canceled and replaced for privacy and security.
Chargeback process
Guests follow these steps if they cannot resolve an issue directly with you:
- Contact their card issuer and request a dispute against the charge. They usually have 60 to 120 days from the initial payment to do this.
- The card issuer investigates the dispute and decides if the guest’s complaint has merit.
- If the card issuer approves the chargeback, they forward the dispute to the acquiring bank (your bank), and debit funds from your account.
- The acquirer sends you notification and removes the funds from your account.
- The issuer transfers the funds back to the guest’s account.
Chargeback fees
Processing banks charge merchants a fee when a chargeback occurs. This fee covers costs for investigation, communication, and dispute resolution among the card issuer, acquiring bank, and merchant.
Your agreement with the payment processor outlines the chargeback fee amount and when fees apply.