Earlier this month, PlayStation users found that their PlayStation Network accounts had been hacked, and that "the hackers had made hundreds of dollars' worth of fraudulent purchases". (1) Unfortunately for the victims, they were given just two choices by Sony: "pay hundreds of dollars to cover the fraudulent charges,
Visa's Pre-Arbitration Chargeback Process
You’re probably already familiar with the concept of chargebacks. If not, be sure to check our blog article explaining what a chargeback is.
The concept of a pre-arbitration chargeback, however,
Chargeback Reason Code 57: Fraudulent Multiple Transactions
Each chargeback is accompanied by a numeric reason code. Mastercard and Visa chargeback reason codes vary, but each credit card network maintains a list to help merchants understand what caused the dispute.
Sony and Customers Clash Over Chargeback Policy
A recent scuffle between Sony and their customers illustrates the difficult situations surrounding chargebacks and begs the question: is it possible to take chargeback prevention too far?
Chargeback Reason Code 71: Declined Authorization
Unfortunately, many chargebacks are caused by merchant error. Visa chargeback reason code 71 is the perfect example (Visa chargeback reason code 74 is another). Criminals and friendly fraudsters don’t cause these profit losses;
Chargeback Reason Code 62: Counterfeit Transaction
In general, the Visa reason codes are pretty easy to understand. The titles aptly describe what went wrong with the transaction. However, some aren’t as self-explanatory as others.
Chargeback Reason Code 76: Incorrect Currency or Transaction Code, or Domestic Transaction Processing Violation
Chargebacks that result from processing errors are costly and unnecessary. Visa chargeback reason code 76 is just such an example: a merchant doesn’t communicate properly or makes a simple processing mistake.
Chargeback Reason Code 74: Late Presentment
By analyzing chargeback reason codes, merchants are able to see patterns in their management efforts. For example, there are several Visa chargeback reason codes that result from transaction processing errors.
A Detailed Description of Mastercard and Visa Chargeback Reason Codes
Each chargeback is accompanied by a reason code. These numeric codes differ by card network, but all theoretically serve the same purpose: to describe the motivation behind the transaction dispute.
Chargeback Reason Code 41: Cancelled Recurring Transaction
Each of the major credit card companies have their own set of chargeback reason codes. These reason codes — like Visa chargeback reason code 41 — are used to explain the cardholder’s grievance and help the merchant understand what led to the chargeback.