Understanding Discover Chargeback Reason Code UA01: Fraud: Card Present Transaction

Reason code UA01 is used where a cardholder disputes that they authorised a card-present transaction. Issuers may file this type of chargeback without asking the merchant for documentation in advance. To fight this chargeback, supply proof of a genuine, correctly authorised transaction. Or, show you have refunded the cardholder. 

Key Takeaways

• What it means: The cardholder disputes a card-present purchase as unauthorised.
• Causes: Stolen cards. Bypassed EMV. Keyed entry. Poor terminal setup.
• How to respond: Supply evidence of genuine authorisation or proof of a refund.
• How to prevent: Use EMV, avoid overrides, train staff, keep terminals secure.

What is a Discover Reason Code UA01 Chargeback?

Reason code UA01 appears when a consumer tells their issuer they did not authorise a purchase made with their physical card. It sits in the fraud category and focuses on what happened at the point of sale. Did a real cardholder approve the transaction? Did your system perform the right checks? If the answer is unclear or the trail is weak, the issuer may raise UA01.

Issuers can initiate this chargeback without first asking for documents, especially when the network data already points to problems. That said, they might still request the receipt or logs and then proceed to a chargeback if what you send is missing or unreadable. UA01 often follows scenarios like keyed entry instead of chip read, use of customer‑activated devices with limited verification, or transactions that lack clear evidence of cardholder participation.

UA01 doesn't constitute an allegation of fraud; it only asserts that the cardholder doesn't believe they are liable for the disputed transaction. It's the merchant's responsibility to prove this is not the case by supplying relevant evidence. Strong proof includes a chip‑validated record, a legible receipt with a signature when applicable, and terminal data that shows card presence and the cardholder verification method used.

Primary Causes for a Code UA01 Chargeback

Most UA01 cases start with a simple fact: the genuine cardholder says they did not make the purchase. From there, the focus turns to how the sale was processed. Transactions that bypass EMV chip reading, rely on manual key entry, or use swiped magstripe data when a chip was available carry a higher risk. These methods make it easier for a stolen card to be used or for the cardholder to deny involvement later.

Terminal setup can also play a part. If devices are not EMV‑ready, if prompts allow weak verification, or if staff override on‑screen guidance, you may finish a sale with less proof than you think. Customer‑activated terminals can create similar issues if they lack strong cardholder verification options for higher‑risk amounts. Another driver is poor documentation. An unreadable receipt, a missing signature when one was required, or absent terminal logs removes the evidence you need to defend the sale.

Friendly fraud exists here as well. A customer might forget a purchase, fail to recognise the trading name, or later regret a high‑ticket buy. Some may even ask staff to key in a card because “the chip is broken,” then dispute the charge. In each case, if your process did not capture solid proof of card presence and participation, UA01 becomes more likely.

Time Limit for Disputing a Discover Reason Code UA01 Chargeback

There is a clear time limit to reply. The acquirer or merchant has 30 days to respond to a UA01 chargeback, and the clock starts ticking from the date the chargeback was issued. 

It’s therefore vital to gather evidence and construct your response as soon as the chargeback notice lands in your inbox. If you miss the deadline, then however strong the evidence you provide is, there is little chance you will win the case. It’s a good idea to implement robust internal processes for checking for chargeback notices and managing the process of creating a response, with a named person or team assigned to the task. That way, when a chargeback does arise, you have the best possible chance of submitting a timely and comprehensive response.

What UA01 Means for Consumers & Issuers

For consumers, UA01 offers a route to challenge a charge that appears on their statement even though they never took part in the purchase. The key issue is consent. In card‑present sales, the expectation is that the merchant and the terminal will check that the person using the card is the cardholder. When a consumer disputes a transaction, they expect the issuer to look for proof of that check.

For issuers, UA01 is a rules‑based review of card presence and verification. They look at all of the network data available to them and any documentation supplied by the merchant in order to make a decision on liability. If network data shows the chip was not used when it should have been, or that the verification step was weak or missing, then in most cases the issuer will rule in favour of the cardholder, and the chargeback will remain standing.

What UA01 Means for Merchants

For merchants, UA01 highlights the need for strong point‑of‑sale controls. The cost of a single case can include the refunded amount, fees, lost stock, and staff time. Repeat issues can push up risk ratings with your acquirer and lead to tighter oversight. The pattern behind many UA01 losses is the same: the finalised sale lacks proof of genuine cardholder participation.

Practical steps make a big difference. EMV‑capable terminals reduce exposure because they record chip usage and support safer verification, such as PIN or CDCVM. Where a signature applies, keep clear, legible receipts that link to the right amount and date. Avoid manual key entry unless there is no other option, and treat any request to bypass normal steps as a red flag. If you operate click‑and‑collect, verify ID at pickup and record that check.

How to Respond to a Code UA01 Chargeback

First verify the path of the disputed sale. If the card was read by chip or contactless and the right verification took place, you have a sound basis to challenge the chargeback. Gather the receipt, the authorisation response, and the terminal transaction log that confirms the EMV process and the cardholder verification result. If a signature was used, include a legible receipt signed by the customer or an authorised user.

Add any helpful context. CCTV stills or footage that show the customer at the till can help, provided the timestamps match. If the order was collected later, include site‑to‑store paperwork, the pickup signature, and any ID check records. If your store captured ID at the time of sale for a high‑risk purchase, include that record when it aligns with local compliance rules. For contactless, include logs that show NFC usage tied to the transaction.

If you have already issued a refund, provide proof. Keep your submission easy to read. Label files clearly and highlight the key fields: date, time, amount, approval code, and verification result. Send through your acquirer’s channel within the 30‑day time limit. If your review shows the sale was keyed in with no strong verification and you lack other proof, accept the chargeback and adjust your process.

Proactive Prevention: The Ultimate Defence

Use EMV‑certified terminals and keep them updated. Read the chip when present and avoid manual entry unless there is no safe alternative. Capture the right cardholder verification for the context: PIN, signature, or CDCVM. Keep receipts legible and store POS logs so you can retrieve them fast. Train staff to follow prompts, refuse requests to skip checks, and verify ID for high‑ticket or unusual purchases. Monitor devices for tampering and keep software patched. You can also try out chargeback alerts to be notified of incoming chargebacks early, giving you time to refund or respond with evidence before the deadline.