Mastercard Chargeback Reason Code 4846: Correct Transaction Currency Code Not Provided

What is Mastercard Chargeback Reason Code 4846?

The Mastercard chargeback reason code 4846 is a point-of-interaction error arising from currency conversion or use. It covers scenarios where the buyer claims the correct transaction currency code was not provided.

Of course, the buyer will dispute the transaction amount since there was no proper information. The issuer will charge back the amount processed for the payment. Now, it’s up to you to prove you took the adequate steps to provide the correct code and adequately inform the buyer.

There’s no reason to fret, as this case is simple. You can quickly submit a second presentment to nullify the chargeback and receive the correct transaction amount. However, you’ll need a couple of documents to fight it.

This chargeback reason code often applies to international transactions that involve two or more currencies. We will help you get through it, but being careful with your transactions is best.

There are things you can do to prevent this chargeback, such as removing automatic dynamic currency conversions from transactions. But we’ll get to that subsequently. In the meantime, let’s address the possible causes of this chargeback reason code.

This chargeback differs from disputes involving point-of-interaction (POI) currency conversion, as they are often confused as being the same.

Why did it happen?

This chargeback occurs when a customer claims to have been charged with no approved currency conversion code. It often occurs for international customers who may or may not require currency conversion for payments. 

Suppose a customer uses USD to pay for your service or product in Dubai. Converting USD to  AED using an exchange rate the customer is unaware of will lead to this chargeback. The buyer can dispute the transaction, claiming the exchange rate or dollar charge was not stated.

With that in mind, here are the reasons the chargeback will occur:

• The buyer claims they weren’t provided the option to choose the currency for the transaction. Hence, the payment was processed in an unauthorized currency.
• The point-of-interaction transaction was processed in a currency other than the buyer’s billing currency.
• A currency conversion occurred despite dispensing cash in the buyer’s billing currency.
• The transaction currency code (DE 49) provided for the currency of the transaction was incorrect.
• The transaction amount was displayed in another currency for information purposes but processed in the same currency.

The error can come from the buyer or you. For the former, customers may forget that they applied dynamic currency conversion to the transaction. Buyers’ remorse after realizing the high charge from the exchange rate may also cause customers to file for this chargeback.

Both cases fall under friendly fraud and can be easily remedied. However, there isn’t much you can do if the chargeback is due to an error on your end. Applying dynamic currency conversion without proper buyer authorization will validate the chargeback.

The best you can do is verify the amount and ensure it is adequately charged. You can file for a refund if the chargeback is higher than expected.

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How to Fight Mastercard Chargeback Reason Code 4846: Correct Transaction Currency Code Not Provided

So, how do you fight this chargeback and get a refund? The solution is straightforward, provided you do it within 45 days. There are things to do and avoid when fighting the Mastercard chargeback reason code 4846.

You must thoroughly verify that you used the correct currency code for the transaction and that the buyer was fully aware. In that case, you need the following:

• Documents proving that you used the valid currency code and processed the right amount
• Proof that the customer was aware of the charge and authorized the transaction with the currency code
• A transaction receipt that reflects the use of the valid currency indicator

We’d like to point something out in the transaction receipt. It is a supporting document but does not prove or disprove a buyer’s agreement to the currency conversion. Hence, it is only considered for determining if a POI currency conversion occurred on the disputed transaction.

If these documents validate your claims, go ahead and file the representment. What happens if the chargeback is valid but you’ve already made a refund? The next course of action is to submit proof that the cardholder was adequately refunded.

How to Prevent Mastercard Chargeback Reason Code 4846: Correct Transaction Currency Code Not Provided

Proper in-house training for your staff should keep this chargeback far away from you. Still, there might be friendly fraud cases that can be quickly dealt with.

Ensure your staff understands currency conversion procedures, costs, and rules. Also, keep customers in the loop regarding their conversion options before authorizing a transaction.

The fundamental prevention of this chargeback is processing payments in local currencies—for example, processing Emirati Dirhams for Dubai customers, euros for European customers, etc.

We have identified a few things you can do to prevent this chargeback if currency conversions are necessary for your business. They include the following:

• Avoid keeping dynamic currency conversion as the default option for international transactions. The option should be there, and customers should be allowed to choose when and when not to use it. The conversion should not be automatically applied to transactions.
• Ensure you present adequate information to your buyers about any necessary currency conversions. The fees or charges for these conversions should be clearly stated. Then, seek authorization or confirmation before processing the payment.
• Do your best to provide the option of processing payments in local currencies. That will spare you the hassles of dealing with unstable currency conversions.
• Establish protocols for dealing with foreign currencies and train your staff on the correct application.
• Process payment with the currency conversion rate stated on the transaction date. We understand the exchange rates may be unstable for some currencies. Notwithstanding, stick to what the buyer authorized.
• Process and file transactions immediately. That will prevent dealing with a fluctuating exchange rate.

A well-defined protocol involving currency conversion will go a long way in keeping this chargeback away from your door.

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