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What Is The American Express Chargeback Reason Code M01 – Chargeback Authorization
American Express chargeback reason code M01 – Chargeback Authorization is used when a cardholder disputes a charge because the merchant didn't properly authorize the transaction. This means the charge went through without getting the necessary approval from American Express. If you're a merchant dealing with this chargeback, you'll need to check your records, gather proof that the transaction was authorized, and submit this evidence to American Express. The resolution process usually takes about 40 to 60 days, ensuring a thorough and fair review of the situation.
Common Causes Of American Express' M01 – Chargeback Authorization
Lack of Authorization: The merchant failed to obtain authorization for the transaction, either due to oversight or a system error.
Improper Authorization: The authorization was obtained but not in accordance with the required procedures, such as using outdated authorization codes or incorrect transaction details.
Technical Issues: Problems with the payment processing system might result in transactions being processed without valid authorization.
Example Scenario of M01 – Chargeback Authorization
Imagine you run a small boutique, and a customer makes a purchase with a credit card. Due to a system glitch, the transaction is processed without obtaining the necessary authorization from American Express. The customer later disputes the charge, leading to a chargeback under reason code M01 – Chargeback Authorization.
To handle this, you would review your transaction records, gather any relevant documentation, and submit this evidence to American Express. If the transaction was not authorized properly, you might need to issue a refund to resolve the dispute.
Resolution Time Frame for American Express Chargeback Reason Code M01 – Chargeback Authorization
The resolution time frame for American Express chargeback code M01 – Chargeback Authorization typically follows a structured process. Here’s an outline of the typical timeline:
Chargeback Filing: When a cardholder disputes a transaction due to improper authorization, American Express initiates the chargeback process. This usually happens shortly after the cardholder reports the issue.
Merchant Response Time: Once the chargeback is issued, the merchant is notified and given an opportunity to respond. American Express generally allows merchants up to 20 days to gather and submit evidence to support their case. This evidence might include authorization logs, transaction records, sales receipts, and any communication with the cardholder.
Review and Decision: After the merchant submits their evidence, American Express reviews the information provided. This review period typically takes around 20-30 days. During this time, American Express assesses the validity of the merchant’s evidence and determines whether the chargeback should be reversed or upheld.
Final Resolution: The entire process, from the initial dispute to the final decision, can take anywhere from 40 to 60 days. If the merchant’s evidence shows that the transaction was properly authorized, the chargeback may be reversed. If the evidence supports the cardholder’s claim that the transaction was not authorized correctly, the chargeback stands, and the cardholder keeps the funds.
How to Avoid Chargeback Reason Code M01 – Chargeback Authorization
To minimize these disputes, consider these proactive measures:
Always Obtain Authorization: Ensure every transaction goes through the proper authorization process before being processed.
Accurate Processing: Train your staff to accurately process transactions and double-check authorizations to prevent mistakes.
System Checks: Regularly check and maintain your payment processing systems to ensure they handle authorizations correctly.
How to Fix Chargeback Reason Code M01 – Chargeback Authorization
If you receive a chargeback under code M01, here’s what you should do:
Review Transaction Details: Verify the details of the disputed transaction, including whether proper authorization was obtained and recorded.
Gather Documentation: Collect all relevant documents that support your case. This might include authorization logs, transaction records, sales receipts, and any communication with the cardholder.
Submit Evidence: Provide this evidence to American Express promptly. Clearly explain the situation and provide documentation showing that the transaction was authorized correctly or provide an explanation for the lack of authorization.
Resolve the Issue: If the transaction was not authorized properly, acknowledge the mistake and, if necessary, process a refund for the cardholder to resolve the dispute.
