Chargeback Reason Code

Discover Chargeback Reason Code NM: Non-receipt of Merchandise

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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Discover Chargeback Reason Code NM: Non-receipt of Merchandise

What is Discover Network Chargeback Reason Code NM?

The Discover Network chargeback reason code NM applies to cardholder disputes involving non-receipt of your merchandise. It is a service dispute that can take a little time to investigate. That is because you must track the goods from your warehouse to determine if the claims are correct.

You can receive chargebacks with this reason code for online or offline orders. However, the order must involve some pick-up or delivery point where the cardholder claims the items purchased. A lot can go wrong between your merchant store and the pick-up points.

Cardholders are the sole initiators of disputes that result in chargebacks with this reason code. Notwithstanding, Discover Network must confirm the following details before initiating a chargeback:

  • All payments were made for the merchandise.
  • You and the cardholder agreed upon the delivery time and date.
  • A pick-up point was set.
  • The cardholder did not find the items at the pick-up point on the delivery date.

Shipped products are often involved in disputes that result in chargebacks with reason code NM. We can also see them with in-store purchases of heavy and sizeable items. Of course, you would have to deliver it to the cardholderā€™s residence or provided address.

Could it be that someone else took delivery of the item and did not inform the cardholder? Things like that could happen, especially if the delivery arrived when the cardholder was unavailable. That wonā€™t stop the cardholder from disputing the transaction if the receiver didn't inform them of the delivery.

Go to the Discover Network Dispute System for more information on the chargeback. You can request more details for a thorough investigation and response. Whichever way, do all you can to invalidate the cardholderā€™s claims if you delivered the merchandise.

We have a few recommendations for dealing with chargebacks of this nature. However, a thorough understanding of why Discover Network will escalate a dispute to chargeback with this reason code is necessary. The causes range from merchant errors to cyber-shoplifting.

The good news is that chargebacks with this reason code are easy to reverse, provided you did your bit. With that in mind, letā€™s see why they occur.

Why Did It Happen?

Discover Network will initiate a chargeback with this reason code when a cardholder complains about not receiving the purchased items. The chargeback amount will equal what they paid for the merchandise.

Chargebacks with this reason code often occur after the delivery date. However, you can expect it before the delivery date for distant shipments.

You can estimate delivery dates and times. Still, that can change with transport conditions and the involvement of third-party delivery services.

Hereā€™s why cardholders will complain in this regard:

  • No item was delivered: This is the most obvious. It means the cardholder never received the merchandise at the pick-up point when it was due. That does not imply that you did not ship it out for delivery.

Youā€™d expect the cardholder to contact you if the goods were not delivered. Still, prepare for chargebacks. Some cardholders will contact their issuers directly or do so after failing to reach you.

  • Billing before shipment: Often, the best approach is to wait till shipment begins before billing the cardholder. Skipping that step can cause knee-jerk reactions that result in complaints. Another point would be guaranteeing a pay-on-delivery service but charging the cardholder before the merchandise arrives.

Late deliveries can be complicated. For example, the cardholder may have already won the chargeback before the merchandise arrived. Itā€™s left for you to obtain the cardholderā€™s delivery receipt and submit it to Discover Network for a reversal.


You have to watch out for cyber-shoplifters. These people will purchase from you, receive your merchandise, and still claim not to have received it. They can get away with a chargeback if they present enough evidence.

Donā€™t expect them to return your merchandise even after receiving the chargeback. We can quantify chargebacks in this case under actual fraud.

Discover Network does its best to investigate chargeback claims. Nonetheless, a few cases of friendly fraud can slip through. You must be on your guard to refute the claims against you and reverse the chargeback.



How to Fight Discover Chargeback Reason Code NM: Non-receipt of Merchandise

There are several ways to refute claims that result in chargebacks under this reason code. Anything you must do should be within 30 days. That said, hereā€™s how to approach chargebacks in this category:

  • Ā If you delivered the merchandise as agreed: This is the easiest to deal with. Submit proof of the delivery. Signed receipts are crucial to show the cardholder taking delivery of the items.
  • The chargeback occurred before you delivered the items: Cancellations may require refunds, but that should happen as per your cancellation policy. Submit evidence that you have yet to deliver the products as agreed. Show the agreed date and time to refute the cardholderā€™s claims.
  • The cardholder has yet to pay a balance: Provide evidence if you agreed to deliver the merchandise after the cardholder paid the balance. Show receipts for the first payment and the outstanding balance to prove your agreement. Outstanding payments are enough to reverse the chargeback.
  • The cardholder has withdrawn the dispute: Provide evidence of the communication where the cardholder withdrew the dispute. You may have reached an alternative agreement, or the cardholder may decide to withdraw the dispute after receiving the products later.
  • The cardholder received a refund: Submit evidence of the transaction to prove that you refunded the cardholder. The transaction amount and date should be visible in your documentation.

How to Prevent Discover Chargeback Reason Code NM: Non-receipt of Merchandise

We hope you will avoid the stress of disputing chargebacks. Hereā€™s what you can do for those with the reason code NM:

  • Inform the buyer of any delivery delays. Include the new expected delivery dates and times.
  • Inform the buyer of any changes to the pick-up point. Include the new pick-up address and obtain their authorization.
  • Process cancellation requests and issue refunds as quickly as possible.
  • Collect signed receipts to prove delivery and collection of your merchandise.


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