Visa Reason Code 12.5: Incorrect Amount
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 Reason Code 12.5: Incorrect Amount.
What is Visa Reason Code 12.5?
Chargeback reason code 12.5 is an updated version of legacy reason code 80, which was phased out under the Visa Claims Resolution initiative. This code applies when the cardholder claims that the transaction amount is incorrect, or some error was made when calculating the amount. The cardholder can also accuse the merchant of altering the amount after the transaction was complete, without the cardholder’s consent.
Essentially, the issuing bank is saying the transaction amount that posted was in some way different from the amount shown on the sales receipt. These chargebacks are generally due to calculation errors or mistyping. There are only a few circumstances where most merchants would even consider altering the transaction, such as a customer wanting to add a tip after the fact.
While this reason code takes the place of legacy code 80, it is narrower in scope. Reason code 80 could also be used for incorrect account numbers; those claims now fall under reason code 12.4.
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 reason code 12.5 chargeback:
- The merchant keyed in the amount incorrectly or misread handwritten amount.
- The merchant transposed numbers at some point in the process.
- The merchant made an addition or transposition error when calculating the total amount.
- The merchant altered the transaction amount after the transaction was complete.
Obviously, there’s a problem that needs to be addressed if a merchant is regularly receiving legitimate chargebacks with an incorrect amount reason code. These claims can also be filed illegitimately, though. 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.
Fortunately for merchants, there are at least some time limitations placed on chargebacks filed under reason code 12.5:
- Within the US, the dispute processing time limit is 120 calendar days from either the day the transaction was processed (for purchases or returns), or the transaction adjustment date (for ATM cash disbursement or PIN-authenticated transactions).
- Outside the US, a maximum of 120 calendar days may pass between the transaction processing date and the dispute processing date.
Reason Code 12.5: Prevention & Response
No matter how faithfully merchants follow the rules, there will always be people who attempt to take advantage of the system. That said, most incorrect amount / reason code 12.5 chargebacks are preventable. Here are a few steps merchants can take to mitigate the risk of this specific type of chargeback:
- Double-check numbers and totals before requesting authorization for a transaction. Be especially careful when entering handwritten data.
- Implement ongoing training to ensure staff understands the proper procedures for processing transactions.
- As far as possible, all transactions should be “dipped” using an EMV chip reader. Entering data manually should only be a last resort (if done at all).
- Never alter the amount of a completed transaction without the cardholder’s consent. As far as possible, avoid altering completed transactions, even with consent.
Illegitimate 12.5 chargebacks stem from customers attempting to get something for a lower cost, or for free. These friendly fraud chargebacks should always be disputed by the merchant.
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While preventative measures can significantly lower overall volume, illegitimate chargebacks may 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:
|The transaction amount is correct…||… provide a copy of the transaction receipt.|
|The transaction amount is not correct…||…you must accept the dispute.|
|You have already processed a reversal, or issued a credit for the transaction...||…provide evidence of the credit or reversal,
including the amount and the date it was processed.
|The cardholder no longer disputes the transaction…||…provide a signed letter or statement from the cardholder which states they no longer dispute the transaction.|
Take a Wider View
In some cases, chargebacks from Visa Reason Code 12.5 can be disputed. 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.