Understanding Discover Chargeback Reason Code UA06: Fraud: Chip & PIN Transaction

UA06 applies when a chip‑and‑PIN card is used in a store but the PIN wasn’t entered or verified on an EMV terminal. The cardholder, therefore, claims that the payment was unauthorised. It usually points to no PIN capability, a PIN bypass, or a mis‑set terminal. Merchants need clear proof of proper PIN verification to overturn it.

Key Takeaways

• What it means: A chip card purchase should have used a PIN, but the PIN wasn’t captured.
• Causes: No PIN capability, PIN bypass, poor terminal setup, or staff overrides.
• How to respond: Provide EMV and PIN evidence, or proof of an allowed exception.
• How to prevent: Use EMV PIN-capable terminals, block PIN bypass, train staff, and maintain detailed logs.

What is a Discover Reason Code UA06 Chargeback?

Reason code UA06 sits in Discover’s fraud category. It applies to card-present sales made with an EMV chip card where the transaction should have been verified by a PIN entry, but the terminal did not capture a PIN. In short, the cardholder says they did not authorise the purchase, and the issuer finds no proof that the chip-and-PIN process was followed.

UA06 should not be used when the transaction actually captured a valid PIN at a PIN-capable terminal, when true fallback was used and flagged in the authorisation, when the authorisation showed a PIN bypass instruction, when the sale was card-not-present, when it was not a contact chip transaction, or when it was a cash advance at an ATM. In those cases, the dispute should be filed under a different reason code or not filed at all.

Primary Causes for a Code UA06 Chargeback

There are several common causes. The most frequent issue is that the terminal is not configured for PIN, or lacks PIN capability altogether, so a chip-and-PIN card is processed without the expected verification. In that case, a stolen or counterfeit card can be used more easily, and the issuer may contest the sale.

Another cause is PIN bypass. Some terminals allow a path that skips PIN entry. If staff accept a bypass when a PIN is required, that increases risk. Fraudsters may also persuade staff to override normal rules. For example, they may ask to swipe, key-enter, or otherwise complete the sale without giving a PIN, especially if they know the terminal allows it.

Technical misconfiguration also plays a role. A device may be EMV-capable but not set to transmit all required EMV data, so authorisation does not show proper chip data or cardholder verification. If the issuer cannot see that the PIN was verified, the transaction may be questioned. Friendly fraud also occurs. A buyer uses their own card at a terminal and later disputes the charge. If the business cannot show correct chip-and-PIN processing, the chargeback will most likely stand.

Time Limit for Disputing a Discover Reason Code UA06 Chargeback

There is a firm time limit to act. The acquirer or merchant has 30 days to respond to a UA06 chargeback. The countdown begins on the date the chargeback is issued, not when you first read the notice. Late submissions are usually rejected, even if your documents prove the validity of your case, so speed matters.

Use the first days to gather EMV evidence from your point‑of‑sale system and gateway. You are looking for clear proof that the purchase was processed on a contact chip payment device and that the correct cardholder verification method was applied. Key items include the authorisation response with EMV indicators, the terminal’s transaction log, and data showing the CVM result (for example, “PIN verified”). If the chip reader fails, locate the authorisation that displays a valid fallback flag. If the sale was card-not-present, collect the order records that confirm that channel.

Work closely with your acquirer, as they may have a set pack format and preferred files. Name documents clearly and keep a list of what you send. If you realise that no valid PIN or exception exists, prepare to accept the chargeback and move on to prevention. Having a simple checklist for UA06 saves time and helps you meet the time limit.

What UA06 Means for Consumers & Issuers

For consumers, UA06 is about safety at the till. Chip-and-PIN is meant to stop others from using their card. If a purchase posts without a PIN where one should have been required, it feels like the basics were skipped. When they dispute such a charge, issuers look for evidence that a PIN was used or that a permitted exception applies. If there is no proof, the consumer is likely to be refunded.

For issuers, UA06 is a rules‑driven assessment. They are checking whether the cardholder verification method matched the card and the terminal’s capabilities. Issuers review the authorisation message and terminal data for signs such as contact chip usage, CVM results, fallback flags, and any PIN bypass instruction. They may file the chargeback without a retrieval request when the network data already shows missing or weak authentication. UA06 should not be used under the following conditions: when a valid PIN was captured, when it was a genuine and flagged fallback, when the sale was card-not-present, or when it was an ATM cash advance. The decision hinges on the data, not on assumptions.

What UA06 Means for Merchants

For merchants, UA06 highlights the risk of incomplete EMV adoption and weak in‑store practices. If your terminal does not support PIN when it should, or staff bypass PIN entry, you may be liable for fraud tied to those transactions. That can mean lost revenue, fees, and higher dispute ratios.

It is also a signal to examine your payment setup. You need PIN-capable, EMV-certified devices and a correct configuration so that the full chip data and verification method flow through the authorisation. Keep your software and firmware current. Check that PIN pads work, prompts are clear, and PIN bypass is blocked except in permitted scenarios.

Staff training matters. Teach your point of sale teams that a chip card must be inserted and a PIN entered when the terminal requests it. They should not accept a swipe or manual key entry in place of a PIN for a chip card. If a customer claims the PIN pad is broken, train them to test it and move to another terminal. If the terminal shows a valid fallback, they should follow it and keep the record. Good habits reduce risk and help you fight disputes.

How to Respond to a Code UA06 Chargeback

Confirm if the transaction used the chip and captured a PIN on a PIN‑capable terminal. If it did, pull together as much evidence as you have available, for example: 

• A receipt showing EMV processing
• An authorisation response with relevant EMV fields
• A terminal transaction log showing the CVM result as PIN
• A terminal configuration report or certificate that proves the terminal was EMV/PIN enabled

Keep your packet readable and straightforward. Highlight dates, times, approval codes, and CVM results. Label files so reviewers can see what each document is at a glance. Submit through your acquirer’s process and stay within the 30‑day time limit. If you cannot show PIN capture or an allowed exception, your prospects are poor. In that case, accept the chargeback and focus on fixing the process that led to it.

Proactive Prevention: The Ultimate Defence

Stopping UA06 at the source is easier than fighting cases later. Upgrade to EMV-certified, PIN-capable terminals and keep them patched. Disable PIN bypass unless permitted by network rules. Make sure the terminal sends full EMV and cardholder verification data in the authorisation. Train staff to insert the card, prompt for PIN, and never switch to swipe or key entry when a chip-and-PIN path exists. You can also try out Chargeback.io to get near-real-time alerts of incoming chargebacks, allowing you to contest them promptly where appropriate.