Discover Card - Code CR
Definition: What this service dispute means is that a card holder is actively challenging the validity of a particular card transaction, because the card holder claims to have cancelled the underlying reservation that they made with the merchant.
Explanation: Reservation was canceled
How to prevent this Chargeback: In order to prevent this type of charge back, you should try to settle the dispute directly with the card holder by either refunding the amount that was charged after the reservation was cancelled, or by providing a cancellation policy which shows why the charge was still made after the reservation was cancelled.
How to resolve this Chargeback: In order to resolve this type of chargeback, you must be able to provide a written statement of rebuttal which details your return or cancellation policy in order to explain why a charge was made even after the reservation was cancelled by the card holder, or supportive documents that show that the card holder was aware of the policy or that he or she was refunded the money that was charged.
Tips: If you have specific requirements for cancellation which will prevent a card holder from continuing to be charged, provide them when the card holder initially signs up for pre-authorized payments so that they will not be surprised when you continue to charge them after they cancel their policy if they do not follow the policies you have set.
