Understanding Mastercard Chargeback Reason Code 4871: Chip Liability Shift–Lost/Stolen/Non-Received Issue

Reason code 4871 applies when a fraudster uses a lost, stolen or never-received EMV card and the merchant’s point-of-sale terminal does not complete the chip and PIN process. Because the terminal failed to use chip technology, liability “shifts” from the issuer to the merchant, and the transaction is disputed as unauthorised.

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Key Takeaways

• What it means: Liability moves to the merchant if a chip card is swiped or keyed without a PIN.
• Causes: Lost, stolen or undelivered cards used at non-EMV or PIN-bypassed terminals.
• How to respond: Supply proof of PIN use, non-chip card, or other cardholder approval.
• How to prevent: Upgrade to EMV hardware, refuse mag-stripe fallback, train staff, and try out Chargeback alerts.

What is a Mastercard Reason Code 4871 Chargeback?

Reason code 4871 sits within Mastercard’s fraud group under “Chip Liability Shift–Lost/Stolen/Non-Received Issue”. It is raised when a cardholder, or their bank, states that a purchase was never authorised because the genuine card was not in the cardholder’s hands at the time. The card was reported lost, stolen, or missing in the post, yet a transaction still went through. 

If that payment was processed without full chip and PIN verification, Mastercard rules say the acquirer (and therefore the merchant) must absorb the cost. The issuer reimburses the cardholder and files the chargeback. In short, 4871 is a penalty for processing an EMV card as though it were a simple mag-stripe card. Merchants should ensure that staff are trained not to allow swipes when the card has a chip. Instead, they should request an alternate form of payment or deny the sale.

Primary Causes for a Code 4871 Chargeback

Fraudsters exploit two gaps. First, they acquire a physical card that belongs to someone else. Second, they locate a retailer whose terminal either cannot read chips or whose staff override the chip process. When the card is swiped or keyed, the terminal cannot generate the one-time cryptogram that proves authenticity, so the issuer cannot confirm the real cardholder is present. That makes the merchant the weakest link. 

Friendly fraud can also trigger 4871. A legitimate customer might claim the card was not in their possession to reverse a purchase, betting that the merchant skipped PIN entry. Any time a merchant permits a chip card to bypass PIN—by swiping, keying, or tap-only over the contactless limit—the scene is set for this chargeback. On the positive side, this chargeback is easy to avoid with the proper processes in place. 

Time Limit for Disputing a Mastercard Reason Code 4871 Chargeback

Issuers have a window of 120 calendar days from the processing date to submit a 4871 chargeback. Merchants, through their acquirer, receive the dispute and must act quickly. Mastercard grants 45 days for the acquirer to send a second presentment (re-presentment) if they wish to contest the claim.

 If the merchant misses this deadline, the case is lost by default. Mark these dates in your dispute calendar and react as soon as the original notification arrives. It's important to act quickly to preserve evidence while it is still easy to gather. CCTV, till receipts, or PIN pad logs can age out quickly, leaving you at risk of losing the dispute.

What 4871 Means for Consumers & Issuers

For consumers, 4871 is clear protection. If their card is lost in the post, stolen from a wallet, or lifted from the till, they are not left out of pocket. The issuer must credit them promptly, then invoke the chargeback system to recoup funds. 

Because the EMV framework is designed to block misuse when chip and PIN are followed, any breach suggests the merchant did not process the card securely. Issuers therefore rely on 4871 to push liability away from customers and back along the chain. The rule also motivates acquirers to promote EMV adoption among their merchants, reducing fraud in the wider ecosystem.

What 4871 Means for Merchants

For retailers, 4871 is a cost and a warning. Each dispute removes the sale amount, adds chargeback fees and raises fraud ratios. Too many disputes threaten the relationship with the acquirer. The code highlights weaknesses in card-present procedures. A single counterfeit or stolen card incident can erode margin, but repeated events can compromise the ability to accept Mastercard altogether. 

Merchants that still rely on mag-stripe readers, or staff who allow chip cards to swipe, carry the financial burden that issuers once shouldered. Upgrading hardware costs money, yet continuing with outdated terminals risks much larger losses. Best practice is to treat 4871 as a business case for modern, chip-ready, PIN-capable devices.

How to Respond to a Code 4871 Chargeback

A strong response package aims to prove one of four points:

• The cardholder approved the transaction. Provide signed receipts, CCTV stills, or PIN-pad audit logs showing correct PIN entry.
• The card was not an EMV card. Supply clear images or terminal data element 55 records showing the absence of a chip.
• Mastercard rules were followed. Show that chip data and PIN verification codes were transmitted to the issuer successfully.
• The dispute is procedurally invalid. Highlight late filing beyond 120 days or duplicate claims against the same transaction.

Include a concise cover letter referencing the Mastercard rules relevant to the dispute. Avoid broadly worded statements; specific factual evidence is more likely to lead to success. Attach all supporting documents, ensuring that they are clearly labelled. Submit the response package through your acquirer portal well within the 45-day window. If you already refunded the sale, document the credit so the issuer can close the case.

Proactive Prevention: The Ultimate Defence

Most 4871 disputes never arise when merchants hard-wire good habits into every sale. Upgrade every terminal to full EMV capability, keep firmware current, and never let staff swipe a chip card “for speed”. Train teams to ask for PIN, signature or biometric verification as required, and set tills to reject mag-stripe fallback. Real-time alerts add an extra layer: they let you act before a dispute turns into a chargeback. Try out chargeback alerts to see how this works in practice.

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