A method for discarding perpetually-rejected packets in a fabric-based interconnect having a reliable physical layer is disclosed. A transmitting component keeps a count of the number of negative acknowledgements (NAKs) it receives from the receiving component for packets the transmitting component sends. If the transmitting component receives a number of consecutive NAKs for the same packet that exceeds some pre-determined threshold, the packet is not resent, but is, instead, treated as having been acknowledged, and subsequent packets are allowed to be transmitted. Higher-level processes are then notified of the problem so as to allow the error to be dealt with at a higher level, but without obstructing the flow of packets on the physical layer.