4853 – Goods or Services Not Provided

DESCRIPTION

Why did I receive a ‘goods or services not provided’ chargeback?

You received this chargeback because the customer claims you didn’t provide the goods or services as promised.

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CLASSIFICATION

How does Mastercard classify this dispute?

Mastercard nests several subcategories under general, overarching reason codes. This ‘goods or services not provided’ subcategory is part of reason code 4853 – cardholder dispute chargeback.

Cardholder disputes are typically the result of mistakes or misunderstandings. Either you made a mistake and didn’t fulfil expectations or the cardholder misunderstood what was supposed to happen.

Mastercard has two transaction processing workflows: dual message and single message. Reason code 4853 is for the dual message workflow.

ISSUER TIME LIMIT

How long can the issuer wait to file a ‘goods or services not provided’ chargeback?

The chargeback timeline can be based on one of several start dates:

• If the delivery date or service performance date was not specified, the issuer must wait at least 30 calendar days after the transaction processing date to initiate the chargeback but not exceed 120 calendar days. However, the 30 day waiting period can be waived if you’ve gone out of business or otherwise won’t be able to fulfill your obligations.
• If the delivery date or service performance date was specified and has passed, the chargeback must be initiated within 120 calendar days of the latest anticipated delivery or performance date. If you’ve gone out of business or otherwise won’t be able to fulfill your obligations, the issuer can file the chargeback immediately and doesn’t have to wait until the scheduled delivery day.
• If ongoing services are terminated, the chargeback must be initiated within 120 calendar days of the date the cardholder realised that services ended (but not to exceed 540 days of the original transaction processing date).
• If the cardholder bought a prepaid gift card and you go out of business, a chargeback must be initiated within 120 calendar days of the card’s expiration date or within 540 calendar days of the transaction processing date if there is no expiration date on the card (this timeline is shortened to 120 days if both the issuer and merchant are in Canada or the U.S.).

Timelines vary slightly for mainland China.

SECOND PRESENTMENT

Can I fight a ‘goods or services not provided’ chargeback?

Yes. You can fight this chargeback — a process called representment or second presentment — in the following situations.

• Goods or services were provided.
• The cardholder’s supporting documentation is suspected to be partially altered or completely falsified.
• You have already refunded the transaction.
• The chargeback was invalid.

There are a couple of reasons why this chargeback might be invalid.

• The chargeback does not meet Mastercard’s filing requirements.
• The chargeback was processed after the time limit.
• A single transaction had more than one chargeback.
• The primary account number (PAN) and acquirer reference number (ARN) used in the chargeback does not match what was sent in the original transaction record.
• The cardholder did not provide the required supporting documentation.
• The cardholder’s supporting documentation was illegible or incomplete.

SUPPORTING DOCUMENTS

What supporting documents are needed for a ‘goods or services not provided’ chargeback?

If an issuer inaccurately files a cardholder dispute chargeback and it can be challenged, your acquirer’s chargeback technology may automatically catch the error and respond on your behalf.

If your acquirer doesn’t automatically respond and you receive a chargeback notice, you can challenge the chargeback yourself. Here’s how.

Create a chargeback rebuttal letter and explain why the chargeback should be reversed. Include information that supports your case and is relevant to the reason for fighting the chargeback. If you want to be extra helpful, you could also provide the acquirer with Mastercard’s required message code.

• If you are disputing a chargeback because the issuer didn’t follow Mastercard’s rules, explain why the chargeback was invalid in your rebuttal letter. The message code is 2713 (Invalid Chargeback).
• If you are disputing a chargeback because it was filed after the time limit, share the transaction processing date and the chargeback processing date. The message code is 2702 (Past Chargeback Time Limit).
• If you are disputing a chargeback because the issuer had previously filed a chargeback for the same transaction, provide the processing date and the reference number for the first chargeback. The message code is 2701 (Duplicate Chargeback).
• If you are disputing a chargeback because the cardholder didn’t provide supporting documents, you can simply reply with the message code: 2002 (Non-receipt of Required Documentation to Support Chargeback).
• If you are disputing a chargeback because the cardholder’s supporting documents are illegible or incomplete, you can simply reply with the relevant message code: 2709 (Documentation Received was Illegible) or 2710 (Scanning Error-Unrelated Documents or Partial Scan).

The majority of the time, your acquirer probably won’t catch the issue and you’ll be responsible for challenging the chargeback yourself.

There are a couple situations that don’t require supporting documents — just specific data elements included in the rebuttal letter.

• If you are disputing a chargeback because a refund has already been issued to the cardholder’s Mastercard account, provide the date and ARN for the refund. The message code is 2011 (Credit Previously Issued).
• If you are disputing a chargeback because you suspect the cardholder altered or falsified documents, you need to clearly explain what has been manipulated. The message code is 2001 (Suspected Altered or Falsified Documentation).

The remainder of the time, your second presentment package does need documents to support the claims you made in your rebuttal letter.

If you are disputing a chargeback because you have already issued a refund — but it was not to the cardholder’s Mastercard account — you need to prove where and how you returned the funds to the cardholder. For example, store credit, check, cash, prepaid card, etc.

If you are disputing a chargeback because you did provide the goods or services as promised, you’ll need documents to support your case. Here are some examples of evidence you might want to use.

• Pictures showing the goods were delivered to the address provided by the cardholder.
• Proof that you provided a one-time passcode to the cardholder’s email or phone number and that passcode was used to retrieve the merchandise from a physical mailbox or locker.
• A receipt or invoice signed by the person who picked up the merchandise (either the cardholder or a person authorised by the cardholder).
• A ‘proof of delivery’ receipt signed by the person who accepted the merchandise (either the cardholder or a person authorised by the cardholder).
• Proof that tickets were used by either the cardholder or a person authorised by the cardholder.
• Proof that the services were provided (for example, the airline flight or cruise occurred).
• Proof that a deposit payment was applied to the cardholder’s outstanding balance.
• Proof that funds were successfully loaded onto a prepaid gift card.
• Proof that the goods or services were delivered after the chargeback was initiated.

NOTE: This information applies to chargebacks processed with the dual message system (which nearly all card-not-present transactions use). Chargebacks for single message transactions use a slightly different process.

ACQUIRER TIME LIMIT

How quickly do I need to file a chargeback response?

In most situations, a second presentment (also referred to as a representment or chargeback response) must be submitted to the issuer within 45 calendar days of the chargeback processing date.

However, there are a few timeline exceptions. The following countries have alternate time limits in certain situations — either 10, 20, or 30 days instead of 45.

• Costa Rica
• Kazakhstan
• Mainland China
• Nigeria
• Tanzania

NOTE: These time limits are for the acquirer — not you, the merchant. Merchant time limits are usually much shorter. Review your chargeback notice or check with your acquirer to find out how long you have to respond.

ADVANCING THE CASE

Are pre-arbitration and arbitration an option for a ‘goods or services not provided’ chargeback?

Yes, in most situations, an issuer can advance the dispute after completing the chargeback and second-presentment stages of the dispute lifecycle.

An issuer can file pre-arbitration if the original chargeback was valid and one of the following happens after the second presentment:

• Your second presentment doesn’t resolve the dispute.
• The cardholder continues to claim that the goods or services were not provided.
• The cardholder refutes your claim that the supporting documents were altered or falsified.
• The issuer claims the supporting documents weren’t legible or weren’t submitted within the time frame.

If the issuer escalates the case to pre-arbitration, you — the merchant — have the chance to respond. You can either accept or reject liability. If you reject the pre-arbitration case, the issuer will likely proceed to arbitration. If that happens, you could be responsible for paying the expensive filing fees.

Check our Mastercard pre-arbitration and arbitration guide to learn more.

NOTE: Pre-arbitration is optional for ATM transactions. Issuers are encouraged to direct file arbitration.

PREVENT

How can I avoid chargebacks like this in the future?

Here are steps you can take to avoid this type of chargeback in the future.

• Abide by the delivery or service date you promised.
• Have merchandise ready for pickup at the time you specified it would be available.
• Make sure you accurately describe the services that will be provided.
• Don’t charge the card until the merchandise has been shipped.
• Notify the customer as soon as possible if merchandise is out of stock or the delivery will be delayed.

Want more information about preventing cardholder dispute chargebacks? Visit our detailed guide about chargeback prevention.

NOTE

Mastercard chargeback rules are complex. The guide is over 1,500 pages long — compared to 67 pages for Visa — and contains detailed rules for both issuers and acquirers.

In an attempt to simplify the complex, we are only sharing information that is most relevant to merchants. If you are an acquirer and in need of more details, reach out to our team. We’d be happy to walk through the specifics with you.