Chargeback Reason Code

American Express Chargeback Reason Code C32: Goods/Services Damaged or Defective

General Information about Reason Codes

In 2016, Mastercard chargeback reason codes were condensed and consolidated, in a restructuring that resembled Visa Claims Resolution. Prior to this, Mastercardā€™s list of reason codes was long, convoluted, and confusing; now there are fewer than ten different reason codes relevant to most merchants. All the old reasons are still there, but theyā€™ve been grouped under more comprehensive ā€œumbrellaā€ codes.

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American Express Chargeback Reason Code C32: Goods/Services Damaged or Defective

What is American Express Chargeback Reason Code C32?

The American Express chargeback reason code C32 indicates customer disputes involving goods or services that arrived or were delivered damaged or defective. It could involve minor or major damages that render the product or service unusable. Although services can get defective, chargebacks of this nature are more prevalent in products.

Goods can get damaged in transit. Warehouse workers try to handle products carefully, but we canā€™t eliminate unseen or unintentional damages. Hence, these products may get to the customer in a damaged or defective state, different from the perfect state you shipped them out in.

We understand your reservations about fulfilling a customerā€™s request for a replacement immediately. A lot can happen between when the product leaves your facility to the customer. Nevertheless, delays can cause dissatisfied customers to file claims with American Express.

You have an obligation to investigate the customerā€™s claims and provide repairs or replacements as needed. Speedy attention should prevent these chargebacks. Still, expect them even when you see no convincing evidence to repair or replace the product (in cases where the product got damaged in the customer's hands).

Chargebacks under reason code C32 are closely related to those under C31. American Express does its best to investigate claims and appropriate the chargeback accordingly. Once received, prepare your response immediately to counter the cardholderā€™s claims.

Online and offline purchases are susceptible to chargebacks under this code. However, they are less frequent in offline purchases because the cardholder can physically inspect the product before purchase.

This guide will provide all you need to fight chargebacks involving defective goods or services. Weā€™ll also suggest ways to prevent them and ensure smooth business operations.

Why Did It Happen?

American Express will process a chargeback under reason code C32 when a cardholder claims that goods or services delivered were defective or damaged. This often occurs after the cardholder has made several attempts to contact you for a replacement, refund, or repair. Then, you will have a window of 20 days to respond to the chargeback, or American Express will process it permanently.

Regarding the possible scenarios that can lead to chargebacks under this code, they include the following:

  • Damaged or defective goods or services on delivery: The cardholder will file for a chargeback if they received the goods or services in a damaged or defective state. This can occur before or after the goods are shipped back to you. Donā€™t expect all customers to be patient with you to verify their claims before taking the issue up with American Express.
  • Unusable or unacceptable goods or services: This scenario relates to actual damages or defects. However, a cardholder might return a product and file a dispute if it is unusable or unacceptable. In the latter case, the damage might not affect the productā€™s functionality.

Minor dents or scratches on a product can cause a cardholder to deem it unacceptable. Although a replacement or repair request is more common in this case, chargebacks can still occur.

  • The cardholder is unaware of your policies for delivering defective or damaged goods or services: Your customer may contact American Express directly instead of contacting you. They could be unaware of your policies on what they should do if they receive damaged or defective products. Youā€™ll still have to investigate the claims to verify whether the goods or services are damaged or defective.
  • You agreed to a refund but have yet to process a credit: Cardholders can grow impatient if you donā€™t process a refund when they expect.

Friendly Fraud

A cardholder who contacts American Express for a chargeback without contacting you first is committing friendly fraud. The products or services may have been damaged after delivery. However, the customer will still file disputes, claiming they arrived damaged or defective.

A case of actual fraud would be where the products are in good condition but the cardholder claims they are damaged. Investigate all cases and reply accordingly. The following section explains how you should approach your defense, depending on the cardholder's claims.



How to Fight American Express Chargeback Reason Code C32: Goods/Services Damaged or Defective

The approaches you can take and the evidence you need are as follows:

  • If the products or services are not damaged: Provide evidence that the cardholder received the goods and services in good condition. A signed receipt from the cardholder can suffice as evidence.
  • If the products were not returned to you: Provide evidence that you have yet to receive the products. Hence, you cannot process a refund based on your return policy. Provide a copy of your return policy and show that the cardholder agreed to it at the time of purchase.
  • If you attempted to repair or replace the damaged or defective goods: Provide evidence that you attempted or are in the process of repairing or replacing the damaged or defective product or service.
  • If the cardholder violated your cancellation or return policies or applicable law: Submit evidence to show that the cardholderā€™s actions were not in line with your cancellation or return policies.
  • Submit evidence that the cardholder agreed to accept the products in that condition. A signed invoice or receipt stating the condition of the products or service will suffice.
  • Submit evidence that you processed a credit to refund the cardholder. Include the amount and date to show that the credit offsets the disputed charges.

For installment payment transactions and bill payment provider transactions:

Submit a copy of your terms and conditions and show that the cardholder agreed. Then, explain how the cardholderā€™s actions did not comply with them.

How to Prevent American Express Chargeback Reason Code C32: Goods/Services Damaged or Defective

Do the following to prevent chargebacks related to damaged or defective goods and services:

  • Use a secure package for your products to minimize or eliminate damages during shipping
  • Provide prompt response and resolve any claims involving defective or damaged products
  • Authorize returns immediately if you have verified that the products are defective or damaged
  • Process credits immediately to offset the disputed charge
  • Ensure the cardholder is aware of your return and refund policy at the time of purchase.


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