American Express Chargeback Reason Code C02: Credit (or Partial Credit) Not Processed

What is American Express Chargeback Reason Code C02?

The American Express chargeback reason code C02 represents credits that were not processed when due. It often arises from a cardholder dispute over the merchant’s promises or a refund. Hence, issuers rarely institute chargebacks under this reason code.

Businesses often make room for refunds to encourage customer participation and build trust. However, poor management can lead to miscommunication. Most cardholders will not hesitate to file claims that you promised or agreed to a refund but reneged on it.

Merchant error is often the cause of chargebacks under this reason code. However, we can agree that not all cardholders have the clearest of intentions. Some may knowingly file for a chargeback even when there was no promise or agreement to a refund.

Prompt communication should prevent chargebacks under this reason code for the most part. Notwithstanding, you should be ready to face it whenever it surfaces.

Issuers may send inquiry requests to confirm the cardholder’s claims of a non- or partial refund. That will allow you to dispute the cardholder’s claims and prevent a chargeback to your account. Otherwise, you are left with no way of escaping the chargeback after the cardholder has brought up the case.

Return policies are also common in chargebacks under this code. Sometimes, cardholders may file claims for a non- or partial refund even when it goes against your return policies.

If you’ve promised a refund, you should strive to process it on or before the agreed date. Maintaining a clear communication line with the cardholder can quell doubts and prevent chargebacks under this code.

We have a few recommendations for disputing chargebacks under this code. You’ll also learn how to prevent them from happening. That essentially involves eliminating situations that will cause cardholders to file chargeback claims.

In the meantime, let’s review how chargebacks under this reason code originate.

Why Did It Happen?

The primary reason for chargebacks under this reason code is that you failed to process a full credit to the cardholder. It can also come from a partial credit.

To expand on that, let’s see the following:

• The cardholder received your written acknowledgment for credit, but you have yet to apply the credit to the cardholder’s account
• The cardholder canceled the order, refused, or returned goods and services according to your return and cancellation policy. However, you have yet to process the credit to the cardholder’s account. Partial credit is also inclusive.
• You incorrectly billed the cardholder for a no-show reservation but have yet to process the credit to the cardholder’s account.

Cardholders will complain if any of the above happens. They might be patient for a moment, but expect them to complain to their issuers soon.

We understand that delays can set in during your business operations. However, most cardholders will not entertain such delays.

You might also forget to process the transaction. In addition, the paperwork needed might be unavailable.

Sometimes, your return or cancellation policy might keep part of the payment. Cardholders may see this as a partial refund and still file chargeback claims. In that case, the issuer will process a chargeback for the remainder under this reason code.

Friendly Fraud and Cyber Shoplifting

Some cardholders can still file chargeback claims even after you’ve agreed to process a refund. They can still do that even when they have yet to return your goods. This practice is akin to cyber-shoplifting where the cardholder hopes to get the goods and the money.

Cyber-shoplifting is easy to detect because you won’t receive the goods. However, fraud is a bit challenging.

You don’t need to focus on the cardholder’s intentions when disputing chargebacks under this reason code. Contacting the cardholder and reaching an alternative agreement is fine. You’ll have the leverage to dispute the chargeback even more.

Carefully examine your return or cancellation policy to clear yourself before disputing chargebacks under this reason code. Follow our guide in the next section to dispute them properly.

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How to Fight American Express Chargeback Reason Code C02: Credit (or Partial Credit) Not Processed

Cardholders have 120 days to file chargeback claims on any transaction. If the chargeback came after 120 days of completing the transaction, you can quickly dispute it. Submit proof that the chargeback occurred outside American Express’s applicable timeframe for cardholder disputes.

Outside of that, here are the steps to dispute chargebacks under reason code C02:

• Submit documents to prove that you processed a credit to offset the disputed amount before the chargeback occurred. The date and transaction amount should be included in the proof.
• Prove that you provided substitute goods or services, as per your agreement with the cardholder or as part of your return policy. This proof must also show that the cardholder accepted the replacement.
• Prove that you never received the goods from the cardholder; hence, you are not liable to provide a refund. That shows the cardholder violated your return policy and still requested a refund.
• Prove that the cardholder violated the no-show reservation policy and was liable for the charge.

If the chargeback does not qualify to be under this reason code, you can also indicate that in your submissions. Whatever you do, ensure you dispute the chargeback within 20 days of receiving the message.

How to Prevent American Express Chargeback Reason Code C02: Credit (or Partial Credit) Not Processed

Prompt refunds and clear communication with the cardholder should prevent chargebacks under this code on a larger scale. Nonetheless, some cases can slip through due to fraud or cyber-shoplifting.

Here’s what you can do to prevent chargebacks under reason code C02:

• Ensure your return or cancellation policy is visible at the time of purchase. Cardholders should agree to it before authorizing the transaction.
• Ensure your return or cancellation policy contains clear instructions on how the cardholders can get a refund or replacement.
• Process cancellation requests promptly to avoid cardholder dissatisfaction.
• Notify cardholders of any reductions from their refunds beforehand.
• Keep to your promises for swift credit processing.

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