Why letter of credit presentations get rejected the first time
Industry figures put first-presentation refusal somewhere between 60% and 75%. That does not mean exporters are careless. It reflects what a documentary credit is: a bank paying against paper, which it compares character by character. The bank has 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 check that the documents say what the credit says they will say. The goods, the relationship and the intent do not matter. A shipment that arrived in perfect condition can be refused because a document describes it slightly differently from the credit.
This is why the fix is almost never at presentation. The fix is when the credit is issued, when you can still ask for it to be amended.
The discrepancies that actually recur
Goods description does not match the credit. The invoice description must correspond to the description in the credit. Do not summarise it, and do not improve it. If the credit says "Ceramic floor tiles, glazed, 600x600mm, Grade A", that is what the invoice says, including the grade.
Late presentation. Documents must be presented within the period stated in the credit. If no period is stated, they must be presented within 21 days of the shipment date and before the credit expires. People miss this while 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 allows one. So is a claused bill, where the carrier has noted damage or defective packing on it.
Documents that contradict each other. The invoice, packing list, certificate of origin and transport document must agree on weights, quantities, marks and party names. The credit does not have to mention a field for a mismatch in it to count as a discrepancy.
Incoterm written differently. The credit says CIF Hamburg. The invoice says CIF Hamburg, Incoterms 2020. Whether that is a discrepancy depends on the examiner. That is exactly the problem.
Insurance for the wrong amount or the wrong date. Where the credit requires insurance, it usually requires 110% of the CIF value. 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. For each requirement, ask which document will carry it and in exactly what words. Where the credit asks for something you cannot produce, ask for an amendment then. That might be a certificate you cannot obtain, a shipment window you cannot meet, or a document from a party who will not sign it.
An amendment before shipment costs a bank fee. A discrepancy after shipment also costs a fee, and then the buyer decides whether to waive it. On a falling market, they may not.
When you are refused
The bank must send a single refusal notice listing every discrepancy, within five banking days. It must also say what it is doing with the documents. Two things follow from this. The bank cannot refuse you in stages, finding new problems each round. A refusal notice that leaves out a discrepancy has waived it. And if you can correct the documents and present them again within the presentation period and before expiry, do that rather than asking for a waiver.
If you cannot, the buyer either waives the discrepancy or does not. That is a commercial conversation. It goes better if you found the discrepancy first and called them before the bank did.