Discover Chargeback Reason Code EX: Expired Card

What is Discover Chargeback Reason Code EX?

The Discover chargeback reason code EX applies to transactions involving expired cards. Although rare, payment terminals can still process payments on expired cards. Cardholders with such a card will rightly dispute the transaction, expecting no further charges through the expired card.

Recurring billing can continue beyond the expiration date of a card. With sufficient investigations, complaints involving expired cards and recurring billing should not result in chargebacks. That is the ideal case, but let’s not rule out any possibility.

Transactions through POS or online terminals will typically be declined if an expired card is used. That is because the issuer must verify the card's validity before processing the payment. Also, it will confirm that the authorization is coming from an authorized cardholder.

In cases involving expired cards, cardholders have little to no role. It often points back to merchants and their processing terminals. That does not exclude fraudulent attempts from people who have unauthorized access to the cards.

Merchant errors often involve forcing a declined transaction or using a faulty payment terminal. In addition, network glitches at the time of the transaction may override security checks meant to validate the card. That will cause the payment to go through, to no fault of yours or the cardholder.

Discover will likely send a retrieval request for more information on the disputed transaction. That will allow you to arrest the situation in its tracks. If that doesn’t happen, a chargeback is inevitable.

Provided the payment terminals work fine, you have nothing to worry about. We’ll show you what you need when disputing chargebacks with reason code EX. The representment is a simple process that must be done with care.

Your evidence should be convincing to reverse the chargeback. Before that, let’s review what disputes result in chargebacks with this reason code.

Why Did It Happen?

Chargebacks with reason code EX occur when cardholders dispute transactions on an expired card. That often comes after they’ve presented enough evidence to Discover to escalate the dispute to a chargeback. Even so, you have the opportunity to dispute the chargeback.

Cardholders expect expired cards to be out of service and unable to process payments. Hence, you can see why they’ll dispute transactions that go through.

On the one hand, you may have forced a declined transaction and failed to check the expiration date on the card. That inexcusable error leaves you with very little to dispute the chargeback.

Fraudsters who are aware of the card’s expiration date may capitalize on it to purchase items. They may persuade you to conduct the transaction while deliberately hiding the card’s expiration from you. We expect you to have sufficient safeguards for wrongful authorizations.

Another possible cause of chargebacks with reason code EX is obtaining authorization before the card’s expiration but processing it after. This is rare but possible. It relates to “authorization-only” transactions where you hold cash for a later settlement date.

Authorization-only transactions are common in businesses where you need proof that the cardholder has sufficient funds. An example is when a hotel places an authorization on a guest’s card but completes the transaction when the guest checks out.

Typically, authorization-only transactions have limited validity. They are often valid for 7 to 30 days. That is enough time for a card to expire.

Chargebacks often indicate that Discover has enough evidence from the cardholder or its investigations. Nevertheless, you can still dispute it. Only do so after carefully examining all points raised in the chargeback message.

If you’ve done that, the next step is to gather your evidence. The following section shows our recommended approach to disputing the chargeback.

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How to Fight Discover Chargeback Reason Code EX: Expired Card

Chargebacks with reason code EX do not always mean the card expired before the transaction occurred. Fraudsters can make false claims. Similarly, Discover can make mistakes.

Your responsibility is to respond to every point raised in the message. Do that within 30 days of receiving the chargeback message.

Here are the best approaches you can take when disputing chargebacks with reason code EX:

• In cases where the transaction occurred before the card expired: Provide a transaction receipt (offline or online) to show that the card was valid at the time of the purchase. It doesn’t matter if authorization was received, provided the card was valid. Authorization disputes will fall under a different reason code.
• Submit documents containing the transaction date, authorization approval, and the amount. For card-present transactions, submit evidence that the card was swiped or manually imprinted. That should show that you took adequate steps to verify the card at your terminal.
• Provide evidence that the transaction was an authorization-only type. That requires submitting the initial authorization the cardholder gave before the expiration date. Submit the amount and ensure it aligns with your charge during final processing.
• In cases of recurring billing: Provide evidence that the transaction is part of recurring billing. Also, show proof that you successfully processed a transaction in recurring billing before the card expired. That could be a receipt showing the date and amount.
• In cases where refunds were processed: Submit evidence of processing a refund to the cardholder. The document should include the amount and date of the payment. 

How to Prevent Discover Chargeback Reason Code EX: Expired Card

Chargebacks with the reason code EX are often due to merchant errors. Fraud and network glitches can also cause them.

The tips below are within your control and should be implemented immediately:

• Always follow recommended practices to validate a card’s payment information, including the expiration date
• Obtain appropriate authorization before processing a transaction
• Check the expiration date on a card if necessary
• Always use a card on file for your transactions
• Use authorization-only transactions only when necessary
• Request for a new payment method if the transaction keeps getting declined
• Ensure you use up-to-date payment terminals to avoid faults that can override the security checks
• Inform customers of any authorization-only transaction before proceeding
• Remind customers of recurring billing before the transaction date

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