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Discover Chargeback Reason Code 05 – Good Faith Investigation

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What Is The Discover Chargeback Reason Code 05 – Good Faith Investigation?

Discover's chargeback reason code 05, or "Good Faith Investigation," is used when a cardholder disputes a charge they believe is incorrect. Discover temporarily reverses the transaction, returning the funds to the cardholder while conducting a detailed investigation. The merchant is given the opportunity to provide evidence supporting the legitimacy of the charge. Discover reviews the evidence from both sides to make a final decision. This process protects cardholders from fraudulent or incorrect charges while requiring merchants to maintain thorough transaction records and respond promptly to disputes.

Common Causes Of Discovers' 05 Good Faith Investigation Chargeback

This chargeback reason usually comes up when the cardholder, doesn’t recognize a charge, believing there’s been a billing error, or suspecting fraud. It’s Discover’s way of saying, “Let’s pause and investigate to make sure this transaction is legitimate.”


Here’s the process:

  1. Customer Dispute: You, as the cardholder, notice a suspicious charge and contact Discover to dispute it.

  2. Initial Investigation: Discover takes your claim seriously and begins a preliminary investigation. They look into the details of the transaction and may contact the merchant for more information.

  3. Chargeback Issued: If Discover believes your claim has merit, they issue a chargeback to the merchant under reason code 05. This means the funds are temporarily taken from the merchant and returned to you, the cardholder, while they investigate further.

  4. Merchant’s Turn: The merchant now has the opportunity to respond to the chargeback. They can provide evidence that the transaction was legitimate, such as proof of delivery or communication with you.

  5. Final Decision: Discover reviews all the evidence from both sides. If the merchant’s evidence is strong, the chargeback might be reversed, meaning the funds would go back to the merchant. If the evidence supports your claim, the chargeback stands, and you keep the funds.

Resolution Time Frame for Discover Chargeback Reason Code 05 Good Faith Investigation

For customers:

  • Once you dispute the charge, Discover typically begins the investigation right away. You’ll usually see the temporary credit (funds returned to you) almost immediately while they investigate.

For merchants:

  • The resolution process can vary, but merchants are usually given a set time frame (often around 30 days) to respond with evidence to support the validity of the charge. The entire process can take a few weeks to a couple of months, depending on the complexity of the dispute and the responsiveness of both parties.

How to Avoid or Fix Chargeback Reason Code 05 Good Faith Investigation

For customers:

  • To avoid unnecessary disputes, always review your statements carefully. If you see something odd, double-check with family members or look for any related emails or receipts before filing a dispute.

For merchants:

  • Preventing Chargebacks:
    • Ensure clear and recognizable billing descriptors so customers recognize charges.
    • Provide excellent customer service and clear communication to resolve any issues before they escalate to a chargeback.
    • Use fraud prevention tools to minimize the risk of fraudulent transactions.
  • Fixing Chargebacks:
    • Respond promptly to the chargeback notification.
    • Provide comprehensive evidence, such as proof of delivery, transaction details, and any communication with the customer, to support the legitimacy of the charge.
    • Maintain thorough records of all transactions to quickly provide necessary documentation.

Discover’s “Good Faith Investigation” chargeback is a protective measure for customers to dispute suspicious charges while giving merchants a chance to prove the transaction’s validity. Both sides can help avoid or resolve these chargebacks through clear communication, diligent record-keeping, and prompt responses.

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