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. Today, we’ll look at one specific example: Visa chargeback reason code 74.
When Processing Errors Cause Trouble
There are more reason codes associated with processing errors than any other category of codes. These include things like not processing credit (Visa chargeback reason code 85), committing authorization errors, and more.
For many merchants, these processing error chargebacks are quite common. However, it really shouldn’t be that way. Merchants have control over every credit card transaction. By properly handling each one, these chargebacks can be avoided.
Chargeback Reason Code 74: Late Presentment
The issuer assigns this reason code if a transaction is not deposited within the agreed upon time period and the account has since been closed. The reason code is also assigned to any transaction that is deposited more than 180 days after the transaction date (regardless of the cardholder’s account standing).
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Why Late Presentment Chargebacks Happen
There are three reasons why Visa chargeback reason code 74 might be used:
- The merchant didn’t deposit the transaction quickly enough and the account has been closed
- The merchant waited more than 180 days to deposit the transaction
- The merchant first received a Visa chargeback reason code 77 and later received a late presentment chargeback as a result
Visa chargeback reason code 77 is also known as non-matching account number. These chargebacks happen when the merchant processed a transaction using an account number that does not match any on file with the issuer. This usually happens because:
- The merchant didn’t enter the account number correctly for a key-entered transaction
- The merchant didn’t properly record the account number for a mail or telephone order transaction
Once a chargeback with reason code 77 has been issued, the merchant will likely try to submit a new transaction with the proper account number. However, doing so could cause a late presentment chargeback.
Because the chargeback process associated with the non-matching account number took so long, it’s not likely the merchant will be able to process the second transaction within 180 days. Even if it has been less than 180 days, the chance of encountering a closed account is much greater.
Managing Late Presentment Chargebacks
There aren’t many representment options for Visa chargeback reason code 74.
- If the transaction was deposited in a timely fashion and the chargeback is a mistake, send a copy of the sales receipt to the acquirer
- If the transaction was deposited late and the cardholder’s account has been closed, accept the chargeback
- If the transaction is older than 181 days, accept the chargeback
Preventing Late Presentment Chargebacks
Fortunately, because late presentment chargebacks are the result of a simple merchant error, they are preventable.
Customers expect to see charges posted to their account quickly. Transactions should be applied to the account in the same calendar month the purchase was made. Going beyond that opens the door for other types of chargebacks. A customer might not remember the transaction and dispute the charge because it isn’t recognized.
Deposit transactions as soon as possible, ideally on the same day as the sale. Most acquirers require deposits be made between one and six days of purchase. Multi-location, centrally accumulated merchants (like those in the travel and entertainment industry) should make deposit within 20 days of the purchase.
Consider upgrading to transaction data capture point-of-sale terminals or electronic cash registers. These devices allow merchants to electronically deposit sales receipts at the end of each business day (or in real time with electronic cash registers).
Managing Chargebacks Effectively
Unless the chargeback was issued in error, there aren’t representment options available for Visa chargeback reason code 74. Therefore, it is especially important to prevent them from happening.
If you’d like help managing late presentment chargebacks or any other transaction dispute, let us know. We’ll provide a free, no-obligation chargeback analysis.