American Express Chargeback Reason Code P07: Late Submission

What is American Express Chargeback Reason Code P07?

Merchants typically submit authorized transactions quickly for the issuer to process payment immediately. However, situations can arise where you delay the submission, either for your business or at the customer’s request. This delay can lead to processing errors that result in the American Express chargeback reason code P07 showing “late submission.”

American Express or the issuer might not include much in the chargeback message, as the code tells it all. It simply means you submitted after the allocated time frame. Hence, the error often arises from the merchant’s end.

The issuer generates this chargeback to refund the cardholder since you did not submit the transaction for final processing. Cardholder disputes rarely lead to this chargeback code. Those are addressed under the cardholder disputes category.

We understand if you want to delay submission. The prominent reasons include the following:

• Batch processing, which can occur once a day,
• A customer may request a pre-order transaction to be processed after the item has arrived.
• Customers can authorize subscriptions but ask you to delay the actual billing. They may take this approach to have a uniform billing cycle or to match their financial cycles.
• Authorization holds may occur for hotel stays until the final day, allowing for final adjustments.

A transaction authorization does not process payments until the final submission. What happens instead is that the issuer confirms that the card is valid, has good standing, and has sufficient funds to handle the transaction. Then, you can submit it along with other payments in a batch.

Regardless of your reasons for delaying a transaction submission, you risk incurring chargebacks under this reason code. We’ll see the possible scenarios that result in the American Express chargeback reason code P07. You’ll also learn how to address it and remain in good standing with American Express and your customers.

We recommend preventing chargebacks of this nature in the future to maintain a good reputation.

Why Did It Happen?

Chargebacks under the reason code P07 occur because American Express has deemed your transaction submission late. All transaction authorizations have valid time frames, and you must submit the payment within this time. While late submission is the primary cause of chargebacks under this reason code, cardholder complaints can also lead to them.

The possible reasons why chargebacks of this nature occur include the following:

• Procedural error or forgetfulness: This scenario implies you forgot to submit the transaction on time after receiving authorization. It can also occur due to procedural errors in business operations or transmission systems. This scenario leaves little to work with when disputing chargebacks of this nature.

Some newer merchants can do this purposefully, hoping to satisfy their customers without knowing the consequences. American Express will not consider intentions but adherence to their rules of service.

• The account status has changed: Accounts can become invalid if you delay submission for too long. Sometimes, account closures or even blockages can occur. This status change makes the previous authorization invalid.

American Express may process chargebacks involving invalid accounts with another reason code. However, if authorization had earlier occurred and you submitted the transaction after the status change, the chargeback will occur under this code.

• Cardholder disputes: Some cardholders may be unaware of their earlier request for a transaction delay. Hence, processing the payment later can prompt them to dispute the charge. American Express diligently addresses chargeback claims, but some cases can slip through under this code.

This scenario is more prominent in recurring billing. That takes us to subscription-based services.

Chargebacks under the reason code P07 can occur for offline and internet transactions. Telephone and mail orders can also result in these chargebacks.

Sometimes, a chat with customers can clear up the dispute. That works if their complaints resulted in the chargebacks. Otherwise, you must address it according to American Express’s standards.

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How to Fight American Express Chargeback Reason Code P07: Late Submission

Your response should come in within 20 days of receiving the chargeback message. Address all points in the chargeback message to give American Express a satisfactory response. Otherwise, the chargeback will remain valid.

Here’s how to approach chargebacks under the reason code P07:

• If you submitted the transaction before the authorization expired: Submit proof that your submission came in before the expiration time. You can also back up your claims by comparing when the authorization expired and when you submitted the transaction. American Express will reverse the chargeback if it discovers you operated within the standard time.
• If you already processed a credit to offset the disputed charge: Submit proof of the credit transaction and show how it offsets the disputed charge. The transaction amounts should match. Otherwise, explain any differences and why you retained that amount.

Anything outside the conditions described above will validate the chargeback. Hence, accept it and take adequate steps to submit your transactions before the authorization expires.

Typical authorizations remain valid for seven to ten days. After that, the issuer will return the funds to the cardholder’s account.

Opt for more flexible authorizations if you need more time before submitting transactions.

How to Prevent American Express Chargeback Reason Code P07: Late Submission

Learn the standard authorization times and submit transactions within the time frame. We recommend submitting daily batches to avoid carrying over transactions to the next day. Here are other ways to prevent chargebacks under reason code P07:

• Use estimated authorizations when unsure of the final transaction amount. Indicate that the transaction amount is an estimate.
• Use incremental authorization if there is a need to increase the final charge without submitting a new transaction.
• Update your software and hardware for optimal service.
• Deposit order receipts with your acquirer within the same day.
• Notify your customers of recurring billing and allow them to switch to another payment method if necessary.
• Monitor your authorized transactions to ensure timely settlements.
• Maintain active emails to address customer complaints promptly.
• Maintain active emails to respond promptly to issuer retrieval requests.
• Maintain an efficient filing system for your daily transactions.

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