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What Does Mastercard 4870 Chargeback Reason Code Mean? Mastercard chargeback reason code 4870, or "Chip Liability Shift," shows up when a transaction is processed using the magnetic stripe instead of the emv chip, and the cardholder disputes it as fraudulent. In this case, the merchant is on the hook for the payment because they didn’t use the more secure chip technology. To avoid this, merchants should make sure they’re using EMV chip-enabled terminals and always process transactions with the chip. This helps keep things secure and cuts down on fraud-related chargebacks.
Key Details of Chargeback Reason Code 4870 Chip Liability Shift
- Definition: This chargeback reason code is applied when a transaction made with a chip-enabled card is processed using a magnetic stripe method, and it turns out to be fraudulent. The liability for the fraud shifts to the merchant because they did not use a chip-enabled terminal.
- Applicability: This code is relevant primarily to face-to-face (card-present) transactions where EMV technology is available but not used.
Common Causes of 4870 Chip Liability Shift
- Non-EMV Compliant Terminals: The merchant’s point-of-sale (POS) terminal is not equipped to process chip transactions.
- Magnetic Stripe Transaction: The merchant processed the transaction using the magnetic stripe reader instead of the chip reader.
- Technical Issues: Issues with the chip reader that led to the transaction being processed using the magnetic stripe.
Resolution Time Frame for Mastercard Reason Code 4870
- For Cardholders: Cardholders typically have 120 calendar days from the transaction date to dispute a charge.
- For Merchants: Upon receiving a chargeback, merchants usually have up to 45 days to respond with evidence to refute the chargeback.
Preventing or Mitigating Chargeback Reason Code 4870
Here are some tips to avoid or deal with these kinds of 4870 chip liability shift chargebacks:
- Upgrade Your Gear: Make sure your payment terminals can read chip cards.
- Train Your Team: Teach your employees to always use the chip reader for chip cards.
- Regular Check-Ups: Keep your terminals in good shape and up-to-date so they can read chip cards without any issues.
- Encourage Chip Use: Remind customers to insert their chip cards instead of swiping.
- Keep an Eye on Transactions: Make sure chip cards are being processed correctly.
- Educate Customers: Let your customers know the importance of using their chip cards and guide them on how to do it right.
