Exploring Visa Chargeback Reason Code 12.2: Incorrect Transaction Code
For the sake of simplicity and standardization, card networks like Visa created a breakdown of the acceptable causes for a customer to dispute a charge 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 Reason Code 12.2: Incorrect Transaction Code.
What is Visa Reason Code 12.2?
Visa chargeback reason code 12.2 is an updated version of legacy Visa reason code 76, which was phased out under the Visa Claims Resolution initiative. This code applies when a cardholder disputes a charge, and the merchant is informed by the processor that the transaction was submitted with an incorrect transaction code.
Since these codes identify whether a transaction was a credit or debit, the merchant either submitted a credit marked as a sale, or a sale marked as a credit.
While this reason code takes the place of legacy code 76, it is narrower in scope. Reason code 76 also included currency errors that are now a separate category under reason code 12.3.
Chargebacks of any kind are nothing but trouble for merchants…yet many credit card disputes 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 12.2, it’s simple and straight-forward: the merchant used the wrong code for the type of transaction in question. Unless someone deliberately tampered with a merchant’s transaction codes after the fact (and there’s no benefit in that), the only way a merchant would receive an incorrect transaction code chargeback is by mistyping the transaction code.
Merchant Rights and Limitations for Reason Code 12.2
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 makes this extremely difficult. In many cases, it’s more efficient to simply take the customer’s claim at face value.
Fortunately for merchants, there are at least some time limitations placed on chargebacks filed under reason code 12.2:
- If the transaction in question was a sale, the dispute processing time limit is 120 calendar days from the transaction processing date.
- If the transaction in question was a refund or credit, the dispute processing time limit is 120 calendar days from the processing date for the credit refund.
Preventing & Disputing Chargeback Reason Code 12.2 Claims
Incorrect transaction reason code chargebacks are the result of a simple mistake on the part of the merchant. This means they’re 100% preventable.
Because payment card transactions are largely digital these days, there’s not a good way to catch transaction errors before they go out. That’s why it’s critical for merchants to implement regular, ongoing training on the proper procedures for processing sales and credit reversals.
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While preventative measures can significantly lower overall chargeback volume, some illegitimate disputes will still 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 make the representment process more successful:
|You believe the transaction was processed correctly…||…provide documentation that shows you processed the transaction correctly as either a credit or a debit to the cardholder’s account.|
|The transaction was processed incorrectly…||…you must accept the dispute.|
|You have already processed a credit or reversal for the transaction…||…provide evidence of the credit or reversal, including the amount and the date it was processed.|
Take a Wider View
Chargebacks from Visa Reason Code 12.2 are disputable in certain rare cases. However, since most are the result of easily-preventable merchant errors, it’s much more efficient to take a proactive stance. In fact, the same thing could be said of other chargeback reason codes, too. 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.