Understanding Mastercard Chargeback Reason Code 4835: Cardholder Not Authorised/Transaction Not Authorised

Please note that code 4835 has been merged into 4808. However, the advice remains valid for "Cardholder Not Authorised/Transaction Not Authorised" claims.

This code is used when a payment reaches settlement even though neither the cardholder nor the issuer granted proper authorisation. The issuer later detects the lapse and recalls the funds, resulting in lost revenue for the merchant.

Key Takeaways

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• What it means: The transaction lacked valid issuer or cardholder authorisation.
• Causes: Expired cards, issuer blocks, forced transactions, multiple requests.
• How to respond: Supply evidence of valid approval or accept the dispute.
• How to prevent: Never force payments; update terminals; adopt real-time chargeback alerts.

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What is a Mastercard Reason Code 4835 Chargeback?

Reason Code 4835 covers disputes that surface after settlement. This chargeback is raised when the issuer spots that genuine authorisation was missing. It sits in the “authorisation-related” dispute family rather than fraud. There is no claim of third-party misuse. Instead, the issuer contends that no approval was ever granted on the account. 

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The situation can arise in store, over the phone, by mail order, or online. Typical scenarios include recently expired or blocked cards or an account placed on a compliance watch list. Occasionally, the merchant triggers the problem by bypassing the authorisation response and keying in an offline code. This is known as “forcing” a sale. The payment may look like it was accepted at first. Later, though, checks reveal the missing approval, and the issuer claws the money back through a chargeback. 

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Primary Causes for a Code 4835 Chargeback

Several root causes keep appearing in 4835 disputes. First, expired cards. Although modern terminals should reject them, a manual override can still push the payment through. Second, issuer holds. The account may be frozen for fraud review, anti-money-laundering checks, or excessive spending. 

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When that hold is active, no authorisation can be granted. However, a forced transaction might still slip past. Third, multiple authorisation attempts in quick succession can confuse systems. This can produce an approval mismatch and later rejection. Fourth, transactions processed through Cardholder-Activated Terminals (CAT) or unattended kiosks. These can create timing gaps that fall outside the permitted authorisation window. 

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Time Limit for Disputing a Mastercard Reason Code 4835 Chargeback

Issuers must send the first 4835 chargeback no later than 90 calendar days from the central processing date shown on the clearing record. They may raise it sooner if internal controls surface the problem immediately, but the outer limit is 90 days. 

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As the merchant, you have 30 days from the central processing date of the chargeback to submit a second presentment that rebuts the claim. Missing the window results in an automatic loss of the dispute. Keep in mind that your acquiring bank may impose an earlier cut-off so that it can review your evidence before forwarding it. Preparing records quickly gives you the best chance of meeting the deadline.

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What 4835 Means for Consumers & Issuers

For cardholders, a 4835 dispute is largely invisible. They never filed a fraud claim; instead, the issuer’s risk engine spotted that authorisation did not exist. The cardholder sees a credit posted to the account and may receive a courtesy note. 

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For issuers, the code is an audit fail-safe. It allows them to pull back funds that were never legitimately approved, keeping consumers satisfied. The issuer also shields itself against regulatory penalties linked to unauthorised electronic payments. However, excessive reliance on 4835 can signal weaknesses in the authorisation platform. This may prompt Mastercard to review the issuer’s procedures. Good issuers prevent the need for the chargeback by refusing transactions at the point of sale if approval cannot be obtained.

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What 4835 Means for Merchants

For merchants, a 4835 chargeback feels like a fraud loss. As well as the loss of revenue, you have to pay additional bank fees and suffer an increased chargeback ratio. On top of this, if you receive multiple 4835 disputes, your business will often come under greater scrutiny. Payment service providers and acquirers may impose higher reserve requirements. Or, in serious cases, your account could be terminated. 

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You also lose the cost of shipped goods or provided services because the dispute focuses solely on authorisation. Delivery receipts or signed dockets do not help here. The only defence is hard evidence of a valid issuer approval. If you're unable to prove that the issuer approved the transaction, then it's advisable not to contest the chargeback. Treating it as a learning experience and taking the opportunity to review and improve processes will benefit you more in the long run.

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How to Respond to a Code 4835 Chargeback

Step one: analyse the chargeback data. Match the transaction amount, date, and time against your batch logs. Check if the logs show an online authorisation response with an approval code. If so collect the system record, receipt copy, and any audit file that links the code to the PAN. Step two: verify that the card was within its “valid thru” date on the transaction day. 

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Mastercard cards remain usable until 23:59 on the final day of the printed month. Step three: produce a concise rebuttal letter referencing the approval, the time stamp, and the validity of the card. Submit everything to your acquirer within 30 days. If the investigation shows you did not receive real-time approval, accept the chargeback promptly. This minimises fees and demonstrates cooperation. Never attempt to re-bill the cardholder; doing so can trigger additional penalties and brand-level fines.

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Proactive Prevention: The Ultimate Defence

Stopping 4835 disputes starts at the till. Always process transactions online and wait for a genuine issuer response. Disable the “force” or “offline” function for regular staff. Keep terminals and gateway software up to date so they automatically decline expired or blocked accounts. 

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When an approval fails, request another payment method rather than pushing the sale through. Use batch controls to catch late-authorised transactions. Finally, you can protect your business with near-real-time dispute notifications. Try out chargeback alerts to spot problems early and refund the customer before the issuer escalates. This helps you protect your payment processor and chargeback rate.

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