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11.2 – Declined Authorization

Visa Reason Code 11.2: Declined Authorization

Reason Code 11.2: Merchandise/Services Not Received

For the sake of simplicity and standardization, card networks like Visa have created a breakdown of the acceptable causes for a customer to dispute a credit card transaction by filing a chargeback. Each of these causes has a designated “reason code,” and banks assign the appropriate code to each case to show the given reason for the chargeback.

That sounds simple enough, but the reality is, the given reason for a chargeback may or may not be the true reason. Plus, each card network has its own set of reason codes—which, while nearly the same in function, nevertheless differ from one another. Keeping track of all these codes, along with the best ways to either fight or prevent each one, is challenging.

With that in mind, let’s take a look at Visa Chargeback Reason Code 11.2: Declined Authorization.

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What is Visa Reason Code 11.2?

Chargeback reason code 11.2 is an updated version of legacy Visa reason code 71, which was phased out under the Visa Claims Resolution initiative. This code applies when authorization for a transaction was requested and denied, but the merchant processed the transaction anyway.

Requesting authorization for every transaction is a good practice. If the request response is Decline or Pickup, however, merchants should act accordingly: even if it is possible to proceed without the authorization, doing so will likely lead to a declined authorization chargeback.

Merchant Errors, Rights, & Limitations

Chargebacks of any kind are nothing but trouble for merchants…yet many chargebacks are the direct result of preventable merchant missteps. It’s crucial for businesses to recognize the common merchant errors that might trigger a chargeback. In the case of reason code 11.2, it’s simple and straight-forward:

  • The merchant does not request authorization
  • The merchant makes multiple attempts on a card that is declined
  • The merchant attempts in any way to force, circumvent, or override a declined authorization.

Whenever a card used in a transaction is declined, the sale should be terminated.

As mentioned earlier, the given reason for a chargeback may be far different from the actual reason. The cardholder who knowingly tries to file a chargeback under false pretenses commits friendly fraud. While banks try to investigate all claims thoroughly before processing a dispute, the meteoric rise in chargeback cases has made this extremely difficult. In many cases, it’s more efficient to simply take the customer’s claim at face value.

In the case of reason code 11.2, however, the responsibility is all on the merchant, who proceeded with a declined transaction. For the issuer, the only limitation here is the timeframe: to file 11.2 chargebacks, no more than 75 calendar days can pass between the transaction-processing date and the dispute processing-date.

Reason Code 11.2 Chargebacks: Prevention & Response

No matter how faithfully merchants follow the rules, there will always be people who attempt to take advantage of the system. Fraudsters may try to use a stolen credit card, but fraud is often attempted by the actual cardholder, using a card they know is invalid. Luckily, declined authorization chargebacks are totally preventable if the merchant follows best practices:

  • Always secure authorization for every transaction.
  • If the authorization response is either Decline or Pickup, you should
    • terminate the transaction;
    • send a second authorization request; or
    • ask for an alternative form of payment

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While preventative measures can significantly lower the overall volume, some illegitimate chargebacks may slip through the cracks. Merchants who have evidence that refutes a cardholder’s claim should definitely challenge the chargeback through Visa’s dispute process. Here are some steps merchants can take to more effectively dispute chargebacks with the declined authorization reason code:

If…

Then…

You believe the transaction was authorized… …provide evidence that the transaction was authorized online, offline via chip, or on a second submission.
You agree the transaction was not authorized… …you must accept the dispute.
You have already processed a reversal, or issued a credit for the transaction... …provide documentation of the credit reversal, including the amount of the credit and the date it was processed.
The cardholder no longer disputes the transaction… …provide a letter, email, or other documentation from the cardholder that clearly states they no longer dispute the transaction.

Take a Wider View

Invalid chargebacks from Visa Reason Code 11.2 can be disputed, but it’s much more efficient to take a proactive stance. The same is true of the other chargeback reason codes, as well. A truly effective chargeback management strategy must encompass prevention as well as disputing cases of friendly fraud.

Chargebacks911® can help your business manage all aspects of chargeback reason codes, with proprietary technologies and experience-based expertise. Contact us today for a free ROI analysis to learn how much more you could save.


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