Why letter of credit presentations get rejected the first time
Industry figures put first-presentation refusal somewhere between 60% and 75%. That is not a statement about exporters being careless. It is a statement about what a documentary credit actually is: a bank paying against paper it compares character by character, with no interest in whether the shipment was fine.
The bank is not reading, it is matching
A credit examiner has the credit on one side and your documents on the other. They are checking that the documents say what the credit says they will say. Nothing about the goods, the relationship or the intent enters into it. A shipment that arrived perfectly can be refused on a document that describes it slightly differently from how the credit does.
This is why the fix is almost never at presentation. It is at the point the credit is issued, when you still have leverage to have it amended.
The discrepancies that actually recur
Goods description not matching the credit. The invoice description must correspond to the credit's. Not summarise it, not improve it. If the credit says "Ceramic floor tiles, glazed, 600x600mm, Grade A" then that is what the invoice says, including the grade.
Late presentation. Documents have to be presented within the period stated, and if none is stated, within 21 days of the shipment date and before the credit expires. People miss this waiting for an original bill of lading to come back from the carrier.
The transport document is the wrong kind. A forwarder's or NVOCC's house bill of lading is refused unless the credit expressly permits one. So is a claused bill, where the carrier has noted damage or defective packing on its face.
Inconsistency between documents. The invoice, packing list, certificate of origin and transport document must not contradict each other on weights, quantities, marks or party names. The credit does not have to mention a field for a mismatch on it to be a discrepancy.
Incoterm stated differently. The credit says CIF Hamburg; the invoice says CIF Hamburg, Incoterms 2020. Whether that is a discrepancy depends on the examiner, which is precisely the problem.
Insurance for the wrong amount or the wrong date. Where the credit requires insurance it usually requires 110% of CIF value, and the policy must be dated no later than the shipment date.
Read the credit as a specification
When a credit arrives, treat it as the specification for a set of documents you have not written yet. Go through it field by field and ask, for each requirement, which document will carry it and in exactly what words. Where the credit asks for something you cannot produce — a certificate you cannot obtain, a shipment window you cannot meet, a document from a party who will not sign it — ask for an amendment then.
An amendment before shipment costs a bank fee. A discrepancy after shipment costs a fee too, plus the buyer's discretion about whether to waive it, which on a falling market they may not.
When you are refused
The bank must notify a single refusal listing every discrepancy, within five banking days, and say what it is doing with the documents. Two things follow. It cannot refuse you in instalments, discovering new problems each round — so a refusal notice that omits a discrepancy has waived it. And if you can correct and re-present inside the presentation period and before expiry, do that rather than seeking a waiver.
Where you cannot, the buyer waives or does not. That is a commercial conversation, and it goes better if you spotted the discrepancy first and called them before the bank did.