Visa Reason Code 12.6.2: Paid by Other Means
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 12.6.2: Paid by Other Means.
Reason Code 12.6.2 Chargebacks are 100% preventable.
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What is Visa Reason Code 12.6.2?
Chargeback reason code 12.6.2 is an updated version of legacy reason code 86, which was phased out under the Visa Claims Resolution initiative. This code is unique—at least currently—in that Visa has taken what was a single reason code and split it into two separate categories: 12.6.1, which covers duplicate transaction errors, and 12.6.2, which specifically deals with transactions billed by other means.
Reason code 12.6.2 applies when a cardholder claims that a transaction was actually paid for using an alternate method—not the Visa card in question. This can be cash, check, or some other type or brand of payment card. The most common cause, though, is that the cardholder initially paid for a transaction with a Visa card, then decided to use cash or a check after the credit card purchase was complete.
Ideally, cardholders would contact the merchant and resolve the issue as soon as the extra charge is noticed. Unfortunately, customers are every bit as likely to call their bank to report the incident. This means that a simple merchant error can quickly escalate to a 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. Fortunately, chargebacks with a “paid by other means” reason code are the result of a simple mistake on the part of the merchant, meaning they are 100% preventable.
There will always be customers who ask to change their payment type at the last minute; accommodating them is good customer service. At the same time, if the merchant forgets to void the original transaction, the cardholder will up end being billed for something for which they already paid. That’s why it’s critical for merchants to void the transaction as quickly as possible.
With diligence, merchants can stop these cases before they happen. But those aren’t the only causes of reason code 12.6.2 chargebacks.
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 12.6.2:
- 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 12.6.2 Chargebacks: Prevention and Response
Chargebacks with a “paid by other means” reason code are the result of a simple mistake on the part of the merchant. This means they are 100% preventable. If a customer asks to use another form of payment after the Visa card transaction has been processed, credit from the original transaction must be applied to the Visa card. Merchants need to do everything they can think of to ensure that this happens.
This is the only way to prevent 12.6.2 errors. Thus, it’s critical for merchants to implement regular, ongoing training to ensure that staff understand the correct way to process transactions under these circumstances.
Illegitimate 12.6.2 chargebacks are another matter. These stem from customers making invalid claims. These friendly fraud chargebacks should always be disputed by the merchant.
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 make the representment process more successful:
|A Visa card was the only form of payment the cardholder used.…||… provide evidence that no other form of payment was used.|
|The cardholder actually used another form of payment after the Visa transaction…||…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
Invalid chargebacks from Visa Reason Code 12.6.2 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.