Discover Network Chargeback Reason Code NA: No Authorization

What is Discover Network Chargeback Reason Code NA?

The chargeback reason code NA applies to unauthorized transactions. That could mean you did not request authorization before processing the payment. It could also mean that you requested authorization after processing the transaction.

Although this chargeback reason code falls under the “Authorization” category, it is also related to fraudulent transactions. Cardholders who believe the transaction occurred without their consent will dispute it and file for a refund. We see that often with stolen or lost cards.

The earliest step in transaction processing is requesting authorization approval. Once sent, the issuer confirms if the credentials are correct and the account is in good standing to cover the payment. You must obtain the authorization approval before finalizing the transaction.

Authorization approval applies to card-present and card-not-present transactions. Hence, you can receive chargebacks under this code for telephone, internet, and mail orders.

Processing payments after authorization approval should prevent chargebacks under this reason code. Notwithstanding, merchant errors are only part of the cause of these chargebacks. Some cardholders may intentionally or unintentionally dispute transactions, claiming they never authorized them.

There are moments when you can bypass the traditional authorization approval request. However, using that route leaves you vulnerable to chargebacks under this code.

A common case for bypassing the traditional authorization approval request is forcing a denied transaction. That involves keying in the credentials manually or requesting an offline authorization code. This approach is legitimate, but you must use it sparingly and with trusted buyers.

Chargebacks under this code are challenging to dispute. You can have leverage if the issuer mistakenly identified the transaction as an error. Otherwise, you’ll be liable for skipping the authorization process.

You can represent this chargeback if you believe the issuer acted in error. That’ll involve proving that you requested and received the authorization approval before finalizing the transaction. We will show you our recommended approach to replying to Discover Network for the best possible chance of a reversal.

Discover Network will use this reason code if it believes no fraud was intended. Otherwise, the chargeback will fall under the fraud category.

You should reduce chargebacks under this reason code to zero. Incurring them will paint your business in a bad light.

Why Did It Happen?

Chargebacks under reason code NA occur when the cardholder disputes a transaction and denies authorizing it. Discover Network will escalate to a chargeback if further investigations reveal that you never received authorization approval. That points us to merchant error, but cardholders can also be at fault.

Here’s how the causes of chargebacks under this reason code work:

• Merchant error in obtaining authorization: This reason includes all possible errors that can occur while requesting authorization approval. You may have sent the request but made some errors, resulting in authorization denial. However, the processing still went through with an override.
• The merchant did not request authorization: in this case, Discover Network has no record of you seeking authorization approval for the transaction. That often occurs with forced transactions where you use offline authorization codes. It can also involve using a previous authorization to process the new payment.
• Increased transaction amount: Increasing the amount after obtaining transaction authorization will lead to chargebacks under this reason code. That is because each approval is for the specific amount that was entered when sending the request. Cardholders can easily dispute the transaction and win a chargeback if Discover Network discovers this discrepancy.

Discover Network can initiate the chargeback in error. However, merchant error is often the cause of chargebacks under reason code NA.

Forced transactions shouldn’t be a thing in your business. Fraudsters often persuade merchants to force transactions with stolen or lost cards. The payment will go through if the cardholder has yet to report the card stolen or lost and block it.

Cardholders may persuade you to force transactions if you can’t get through with the traditional approval route. They can turn around and deny the transaction, forcing Discover Network to review the authorization process. You are more than likely to incur a chargeback in that case.

How to Fight Discover Network Chargeback Reason Code NA: No Authorization

Prove the receipt of the transaction authorization, and you’ll have the chargeback reversed. The authorized timeframe for your second presentment is 30 days.

Here’s how to dispute chargebacks with reason code NA:

• If the transaction was authorized: Inform your acquirer and submit evidence to show the authorization approval response. The transaction amount and date should be included in the documentation. Discover Network will reverse the chargeback once it matches the authorization with the transaction.
• If you’ve reached an alternative resolution with the cardholder: Provide evidence of the alternative resolution and show the cardholder’s endorsement of the alternative. Ensure you have adequate cardholder authorization, like a signature, to prove the cardholder’s compliance.
• If you’ve processed a refund: Submit details of the credit transaction. Include the date, time, and amount to prove the credit payment is for the disputed transaction.

Request additional details if you are unsure about the disputed transaction. Ensure you have everything you need before submitting your second presentment.

Accept the chargeback if your findings reveal merchant error. However, take active steps to prevent chargebacks under this reason code from occurring again.

How to Prevent Discover Network Chargeback Reason Code NA: No Authorization

Modern systems are designed to deny unauthorized transactions. Hence, the error often occurs outside these systems.

Here’s how you can prevent chargebacks under reason code NA:

• Update your payment terminals and replace any faulty hardware.
• Avoid forcing transactions when the payment systems deny them.
• Avoid processing damaged cards.
• Do not add to the final transaction amount after obtaining authorization for a lesser amount.
• Print the approval code in the right section of the receipt when using point-of-sale terminals.
• Write down the approval code for phone authorizations.
• Finalize transactions as soon as you enter them.
• Request an alternative payment method if the issuer keeps denying your authorization request.
• Obtain and record authorizations for each level before proceeding to the next.

‍