What Does American Express Chargeback Reason Code P05 Mean?
Chargeback code P05 – "Incorrect Charge Amount" is used when a cardholder disputes a transaction because the amount charged to their account is different from what they agreed to pay. This can happen due to clerical errors, system glitches, or miscommunication about the final amount. Merchants should pull receipts or invoices showing the correct figure and send that evidence to Amex. Expect a 40‑ to 60‑day review before the dispute is settled.
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Common Causes Of American Express' P05 Chargeback Code
Clerical Errors: The merchant or their staff might have accidentally entered the wrong amount when processing the transaction.
System Glitches: Technical issues with the payment processing system might result in incorrect amounts being charged.
Miscommunication: There might have been a misunderstanding or miscommunication between the cardholder and the merchant about the final amount to be charged.
Example Scenario of P05 – Incorrect Charge Amount
Imagine you run a restaurant, and a customer pays for their meal with a credit card. Due to a data entry error, the amount charged is higher than the total bill. The customer notices this discrepancy on their statement and disputes the charge under reason code P05 – Incorrect Charge Amount.
To handle this, you would review your transaction records, gather evidence showing the agreed bill amount, and confirm the error. You would then issue a refund for the overcharged amount, gather proof of the refund, and submit this evidence to American Express to resolve the dispute.
Resolution Time Frame for Chargeback Reason Code P05
An American Express P05 chargeback begins when the cardholder reports an incorrect amount; the merchant then has 20 days to submit receipts or logs. Amex reviews that evidence for roughly 20–30 days, so the full cycle runs 40–60 days. If the documentation proves the charge was correct, the dispute is reversed; otherwise, the cardholder keeps the funds.
Here is a more detailed breakdown of resolution actions and timeframes for chargeback code P05:
Chargeback Filing: When a cardholder disputes a transaction due to an incorrect charge amount, 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 transaction logs, sales receipts, invoices, 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 amount was correct or that the issue was resolved satisfactorily, the chargeback may be reversed. If the evidence supports the cardholder’s claim of an incorrect charge amount, the chargeback stands, and the cardholder keeps the funds.
How to Prevent Chargeback Reason Code P05
To minimize these disputes, consider these proactive measures:
Accurate Data Entry: Ensure all transaction amounts are entered accurately during processing. Double-check manual entries to prevent errors.
Clear Communication: Communicate clearly with customers about the total amount to be charged and provide detailed receipts.
System Checks: Regularly check and maintain your payment processing systems to ensure they are functioning correctly and accurately.
How to Fix Chargeback Reason Code P05 – Incorrect Charge Amount
If you receive a chargeback under code P05, here’s what you should do:
Review the Transaction: Verify your records to confirm the details of the transaction, including the agreed amount and the amount actually charged.
Gather Documentation: Collect all relevant documents that support your case. This might include transaction logs, sales receipts, invoices, and any communication with the cardholder.
Submit Evidence: Provide this evidence to American Express promptly. Clearly explain the situation and provide documentation showing the agreed amount and any steps taken to correct the error if applicable.
Issue a Refund if Necessary: If you find that the charge was incorrect and the cardholder was overcharged, issue a refund immediately and provide proof of this action to American Express and the customer.
