Chargeback Reason Code

Discover Chargeback Reason Code RG: Non-receipt of Recurring Goods or Services

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, Mastercard’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 they’ve been grouped under more comprehensive “umbrella” codes.

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Discover Chargeback Reason Code RG: Non-receipt of Recurring Goods or Services

What is Discover Network Chargeback Reason Code RG?

This chargeback reason code applies when a cardholder claims that the goods and services paid for were not received. It is a service dispute with broad causes. The cardholder may be in error just as much as the merchant is.

You can find this chargeback reason code in online e-commerce or offline shopping. For the latter, the goods or services are delivered after the cardholder has left the merchant store. We can see this on bulkier items, like double-door fridges or large cabinets.

For in-person services, an example would be a cardholder paying for lawn mowing but not receiving the service at the expected date.

Although this chargeback reason code applies to online and offline transactions, e-commerce payments tend to have it more. The recurring nature, as described in the code, brings in subscriptions, which can be monthly, weekly, quarterly, or annually.

Subscription-based services often process payments during the billing period. However, some allow annual subscriptions, which exempt you from monthly charges. That approach demands the recurring provision of the services during the billing cycles.

A clear case of this will be when making an annual payment for software but the provider withdraws the services in the subsequent billing cycle. The cardholder can file claims with the issuer, prompting the use of this chargeback reason code. Then, it will be up to you to defend your position and give sufficient reasons why the cardholder is wrong or the chargeback is ungrounded.

The Discover Network Dispute System is your one-stop platform to manage and address your chargebacks. You’ll have more information about cases involving chargeback reason code RG, or you can request more details.

Merchant errors are often the cause for chargebacks under this reason code. Nonetheless, some cardholders may intentionally or unintentionally file false claims.

Discover Network might resort to this code if they receive an unsatisfactory response to their inquiry. That is because cases of this nature often require additional verification. The inquiry is an opportunity for you to prevent a chargeback under this code.

Disputing the cardholder’s claims requires evidence to prove otherwise. We’ll see that in a subsequent section. In the meantime, let’s see how merchant and cardholder errors can cause chargebacks of this nature.

Why Did It Happen?

Chargebacks with reason code RG occur when the cardholder sufficiently proves that they did not receive the recurring goods or services when due. Some cardholders will contact you before contacting their issuers and escalating the case to a chargeback. However, we can’t assure you that this happens all the time.

Here are the possible causes for chargebacks with reason code RG:

  • Non-delivery of goods on agreed date: One-time and recurring deliveries have one thing in common: an agreed delivery date. Failure to deliver the goods during that period is enough reason for a cardholder to approach the issuer for a chargeback. Often, the chargeback will occur if you fail to inform the customer of a delay.
  • Non-execution of the service on the agreed date: Cases in this category are like the previously discussed one. The only difference is the replacement of goods with services. It could be an online subscription or an in-person service, like weekly barbing, lawn mowing, monthly house maintenance, etc.
  • False claims from the cardholder: Friendly fraud can occur with dissatisfied customers. Some may have buyer’s remorse and want a refund. They might contact you or go straight to their issuers after returning the product.

Cyber-shoplifting can occur with recurring goods. That happens when a cardholder receives the product but files false claims about not receiving it.

One final cause of chargebacks under this reason code is theft. You may have delivered the goods, but they got stolen before the cardholder could pick them up. We see this with porch pirates that steal people’s online orders.

Services are easier to deal with than goods. With goods comes the possibility of theft, as earlier described. That is no fault of yours or the cardholder.

Video recordings of the theft might exempt you from liability or the chargeback. Nevertheless, that is a long shot when resolving chargebacks with this reason code.



How to Fight Discover Network Chargeback Reason Code RG: Non-receipt of Recurring Goods or Services

Submit your response to this chargeback within 30 days of receiving the message. It should be as thorough as possible to address all the points.

Our approach to disputing chargebacks under this reason code will be in categories as follows:

For card-not-present transactions (services):

  • Prove that the cardholder received the electronic material on the agreed date. If it is software, prove that the cardholder downloaded and used the software. Your documentation should include the email, IP address, date, and time of the delivery or download.

For chargebacks with site-to-store modifiers:

  • Submit the duly signed pick-up form
  • Submit a copy of the identification the cardholder presented when picking up the goods

For chargebacks with the airline transaction modifier:

  • Prove that the customer used the airline ticket
  • Prove that the customer’s lost ticket application was invalid

Other scenarios:

  • Provide receipts, proof of delivery, and other signed documents that show you delivered the goods or services as per the cardholder’s agreement
  • Any correspondence that shows the cardholder received the goods or services

Anything outside these will require a credit refund. Submit documentation if you already did that. Otherwise, accept the chargeback and take preventive measures.

How to Prevent Discover Network Chargeback Reason Code RG: Non-receipt of Recurring Goods or Services

Here are a few tips that will help you avoid chargebacks with reason code RG:

  • Always follow the cardholder’s agreement when delivering goods or services
  • Inform cardholders of any impending delays and your expected delivery date. Ensure they acknowledge the delay.
  • Avoid charging the cardholder’s account until after shipping the order.
  • Obtain signed receipts after product or service delivery.
  • Provide tracking information for shipped orders to reduce anxiety and improve trust.
  • Ensure the orders are ready at pick-up locations at agreed dates and times.
  • Keep open communication with your customers and respond promptly to their complaints.
  • Obtain identification of cardholders when they pick up their products.
  • Process credit refunds when cardholders return goods under your return policy.


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