American Express Chargeback Reason Code FR6: Partial Immediate Chargeback Program

What is the American Express Chargeback Reason Code FR6?

Chargebacks do not portray your business in a good light; hence, you must avoid them. The American Express chargeback reason code FR6 indicates disputed transactions when the merchant is in the partial immediate chargeback program. It falls under the “inquiry/miscellaneous” category and expands beyond potential fraudulent transactions.

American Express uses several fraud and chargeback monitoring programs to keep merchants in check and promote trustworthy business transactions. The Fraud Full Recourse program is one such program, but it is exclusively for fraud-related chargebacks. Merchants get enrolled in it when they incur excessive fraud-related chargebacks from customer disputes.

Cardholders must dispute transactions before American Express decides to use the FR6 reason code. Any dispute other regular chargeback codes would have covered can cause American Express to use this one. Hence, merchants in the partial immediate chargeback program have little leeway to resolve complaints before they escalate to a chargeback.

Fortunately, you can use compelling evidence when disputing chargebacks under this reason code. These include the following:

• Pictures related to the cardholder’s use or receipt of the goods or services
• Signatures on receipts or alternative agreements
• Email conversations
• Other relevant documents outside the standard transaction data that can help your case

You can present these pieces of evidence when responding to the chargeback message. However, your aim should be to exit the partial immediate chargeback program. Future chargebacks will use the reason code if you are still in the program.

The Partial Immediate Chargeback Program

American Express set up this program to monitor merchants with excessive chargebacks. Successfully disputing most of the chargebacks is irrelevant if that happened after the initial processing. The issuer’s goal is to ensure merchants reduce chargebacks to the barest minimum.

Excessive chargebacks can come from the following:

• Poor customer service, forcing cardholders to approach their issuers with chargeback claims
• Slow and lax response to inquiry requests
• Using POS systems that process chip card payments without PIN validation
• Transmitting partial chip data to American Express during payments
• Using non-EMV-enabled payment terminals
• Unclear refund policy
• Slow processing of credits to offset customer refunds

The list can continue depending on merchant errors and customer disputes. However, American Express will use this chargeback reason code when the disputed transactions fall within specific ranges. These are up to $20, $25, $50, $100, or $250.

Exceeding these thresholds will bring other chargeback reason codes when customers dispute transactions. Fraud-related cases might incur the FR2 code if you are in the Fraud Full Recourse Program.

American Express will not send inquiry requests for chargebacks in this category. Instead, they follow the steps below:

• Review the cardholder’s dispute
• Check if you are in the partial immediate chargeback program.
• Process the chargeback under the reason code FR6 if you are in the program.
• Send an inquiry request if you are not in the program.

Why Did It Happen?

Chargebacks under this reason code occur when cardholders dispute transactions. The reasons could differ, provided you are in the partial immediate chargeback program. A few we can think of include the following:

• Merchant error: These errors can come from multiple reasons. A few include not processing cancellation requests, recurrent billing, currency discrepancies, hidden charges, submitting transactions when the authorization code is invalid, etc. You can refer to other chargeback reason codes and their underlying causes.

Chargebacks due to merchant errors will stick, except where American Express processed them outside the standard timeframe. Hence, they are often responsible for driving up your chargeback numbers to warrant inclusion in the partial immediate chargeback program.

• Cardholder disputes: Cardholders may dispute a transaction even in error. For example, a cardholder may agree to recurrent billing and forget it during the next billing cycle. We classify these reasons as friendly fraud.

Shoplifters and other fraudulent customers can knowingly dispute transactions to warrant chargebacks. For example, a cyber-shoplifter might demand a refund even after receiving and using your goods or services.

Responding quickly to inquiry requests and presenting substantial evidence can deter chargebacks of this nature. However, they are still viable enough to drive up your chargeback numbers for inclusion in the partial immediate chargeback program.

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How to Fight American Express Chargeback Reason Code FR6: Partial Immediate Chargeback Program

American Express’s timeframe to dispute chargebacks under this reason code is 20 days. You can use compelling evidence to support your claim and refute the chargeback. Follow the approaches below to dispute chargebacks under the reason code FR6:

• If you are not on the partial immediate chargeback program: Prove that you were not part of the partial immediate chargeback program when the transaction occurred. You can share your status or when American Express enrolled you in the program. Note that the chargeback will stick if you were in the program but are currently delisted from it.
• If you processed a credit to offset the disputed charge: Submit the credit transaction to prove that the cardholder was duly refunded. Provide the transaction details, including the date and the amount. Your credit refund should be within the timeframe in your refund policy, or the customer should be aware of any delays.
• If you settled for an alternative resolution with the cardholder: Submit compelling evidence to show the alternative resolution between you and the cardholder.

How to Prevent American Express Chargeback Reason Code FR6: Partial Immediate Chargeback Program

The best approach to preventing chargebacks under the reason code FR6 is to be delisted from the partial immediate chargeback program. That requires reducing the number of chargeback cases, regardless of their causes.

A few improvements you can make to your business operations include the following:

• Use modern anti-fraud tools to detect and eliminate fraudulent transactions.
• Process credit transactions to offset disputed charges within seven days.
• Upgrade your payment terminals to use EMV-enabled systems.
• Have a clear refund policy with clearly stated timeframes.
• Provide excellent customer service to handle complaints before they escalate to chargebacks.
• Provide quick and thorough responses to issuer inquiry requests.
• Avoid manually keying transactions.
• Submit transactions in batches at least once a day.
• Review transactions thoroughly before submission for final processing.

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