Visa Chargeback Reason Codes Explained

What are Visa Chargeback Reason Codes?

Unfortunately for merchants, there is a lot of confusing terminology, regulations, and procedures involved in the act of processing chargebacks. In theory, chargeback reason codes provide a cut-and-dried explanation as to why the cardholder disputed the transaction.

Differences Between MasterCard and Visa

Visa and MasterCard each have their own systems for dealing with chargebacks, including the way they express reason codes.

While similar, there are obvious differences between the two networks’ procedures. For example, MasterCard uses a four-digit code; Visa chargeback codes are two-digit.

Also, the networks choose to address consumer grievances differently, using similar but unique reason code titles. While one network might think an issue is worthy of its own reason code, the other network might lump various issues together or omit them entirely.

Analyzing Visa Chargeback Reason Codes

Chargebacks911™ takes the stance that all chargebacks are caused by one of three things: merchant error, criminal fraud or friendly fraud. Unfortunately, because of the rise of friendly fraud, there isn’t just one obvious cause for each of the Visa chargeback codes. For example, the reason code associated with an unauthorized transaction could technically be attributed to merchant error, criminal fraud and friendly fraud.

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While not necessarily a good way to identify chargeback triggers, it is advantageous for the merchant to organize Visa chargeback reason codes into six categories. This helps the merchant better understand what supposedly caused the transaction dispute.

1. Insufficient Accompanying Information

Reason Code Description Prevention
Reason Code 75

Transaction Not Recognized

The cardholder doesn’t necessarily claim fraud; rather, the transaction isn’t recognizable based on the information provided on the card statement.
  • List the “Doing Business As” name rather than the legal name for the business in the billing descriptor.
  • Include a phone number, email address or web address in the billing descriptor.

2. Fraud

Reason Code Description Prevention
Reason Code 57

Fraudulent Multiple Transactions

The cardholder has willingly participated in transactions with the merchant in the past, but this particular transaction was unauthorized.
  • Void multiple transactions.
  • Review employee actions for intentional fraud.
Reason Code 62

Counterfeit Transaction

A criminal used a counterfeit (duplicate) copy of the card to make card-present purchases.
  • Verify the first four embossed numbers match the printed numbers on the card.
  • Check for other indicators the card has been tampered with.
  • Conduct a Code 10 Call when suspicions are raised.
  • Avoid fallback processing options (key entered transactions, signature rather than PIN, etc.) whenever possible.
Reason Code 81

Fraud, Card-Present

The merchant processed a transaction that the cardholder did not authorize.
  • Make an imprint for all manually processed transactions
Reason Code 83

Fraud, Card-Not-Present

The merchant processed a transaction that the cardholder did not authorize.
  • Use fraud detection tools like AVS, Card Verification Value 2, and Verified by Visa.
  • Look for indicators of fraud before processing transactions.
  • Use fraud alerts to issue refunds for unauthorized transactions.
  • Carefully evaluate affiliate networks before joining.
  • Implement additional security controls for digital goods or services.
Reason Code 93

Merchant Fraud Performance Program

Visa informed the issuer that the transaction was identified by the Merchant Fraud Performance Program.
  • Carefully monitor chargeback and fraud thresholds.
  • Take action when fraud thresholds have been breached.

3. Authorization Errors

Reason Code Description Prevention
Reason Code 71

Declined Authorization

A transaction was processed after the merchant received a declined authorization message.
  • Obtain authorization.
  • Discontinue the transaction if a card has been declined.
  • Ask for an alternate form of payment.
  • Never force an authorization.
Reason Code 72

No Authorization

Authorization was not obtained.
  • Obtain authorization.
  • Obtain authorization on the day of the transaction.
  • Don’t include the tip on the authorization amount.
Reason Code 73

Expired Card

A transaction was processed on an expired card.
  • Obtain authorization.
  • Check the expiration date before processing card-present transactions.
  • Request the expiration date when processing card-not-present transactions.
Reason Code 77

Non-Matching Account Number

The issuer doesn’t ave that particular account number on file.
  • Double check the card number when processing telephone orders or key-entered transactions whenever possible.
  • Avoid key-entered transactions whenever possible.

4. Transaction Processing Errors

Reason Code Description Prevention
Reason Code 74

Late Presentment

The merchant didn’t process the transaction within a reasonable time frame.
  • Settle payment batches as quickly as possible.
  • Process transactions within 180 days of the original purchase.
Reason Code 76

Incorrect Currency Code or Transaction Code, Domestic Transaction Processing Violation

The merchant made one or more errors related to the transaction currency or code.
  • Give the cardholder the option to make the purchase in the merchant’s local currency.
  • Deposit receipts in the country where the purchase was made.
  • Inform cardholders of the use of currency conversion and applicable fees.
Reason Code 80

Incorrect Transaction Amount or Account Number

The amount charged for the transaction wasn’t correct.
  • Double check calculations and the final transaction amount before processing.
  • Don’t change the transaction amount without the cardholder’s consent.
Reason Code 82

Duplicate Processing

The merchant processed a single transaction multiple times.
  • Submit a batch only one time.
  • Deposit one copy of the sales receipt.
  • Create one receipt per transaction.
  • Deposit receipts with one acquirer.
  • Void multiple transactions.
Reason Code 86

Paid by Other Means

The merchant processed a single transaction multiple times; once with the given card and once with cash, check, or another card.
  • Void multiple transactions

5. Cancelation Errors

Reason Code Description Prevention
Reason Code 41

Cancelled Recurring Transaction

The merchant failed to adhere to the cardholder’s wishes or made an error while processing a recurring transaction.
  • Terminate recurring transactions when the cardholder requests cancelation.
  • Consider a no-strings-attached cancelation policy.
  • Use Visa Account Updater to gain access to new card information so transactions aren’t attempted on closed accounts.
  • Don’t increase the transaction amount without the cardholder’s consent.
  • Don’t prematurely bill the cardholder.
  • Send notifications for upcoming charges.
Reason Code 85

Credit Not Processed

The cardholder made a return, but the merchant didn’t credit the account.
  • Share the return policy with the cardholder before completing the transaction.
  • Issue credits promptly.
  • Notify the cardholder when the credit has been issued.

6. Goods or Services Were Not Provided

Reason Code Description Prevention
Reason Code 30

Services Not Provided or Merchandise Not Received

Goods or services were not received or not received by the agreed upon date.
  • Provide goods and services as promised.
  • Don’t charge the cardholder’s account until after the product has been shipped.
  • Let cardholder’s know when the product has been shipped and the estimated date for delivery.
  • Use delivery confirmation.
  • Make sure products are available for pick up when specified.
Reason Code 53

Not as Described or Defective Merchandise

The merchandise was damaged upon its arrival or not as described by the merchant.
  • Double check orders to ensure the correct item is shipped.
  • Package items carefully to avoid damage during shipping.
  • Provide honest product descriptions.
  • Accept returns from cardholders and issue credit promptly.
  • Never sell counterfeit products.

The Problem with Reason Codes

When reason codes were first created, they were a valuable tool for chargeback management and analysis. Reason codes helped the merchant understand why the chargeback was filed.

With the rise of friendly fraud, reason codes have become less insightful. Merchants are not able to easily identify the true cause of revenue loss.

A recent study found more than half of all the reason codes used to file chargebacks were related to fraud (unauthorized transactions). However, 81% of cardholders readily admit the real reason for filing the chargeback was convenience; they didn’t want to take the time to contact the merchant for a refund.

Merchants need to look past the reason code and identify the true source of chargebacks, which is not an easy task. Because the co-founders of Chargebacks911™ gained hands-on experience as merchants themselves, they know the struggles you face when it comes to effective chargeback management. As a result, Chargebacks911™ was able to create Intelligent Source Detection™ technology to make chargeback prevention and representment even more effective.

We’re able to help merchants identify the true chargeback triggers. We get to the root of the problem, often determining friendly fraud, not criminal fraud, is really to blame. Our chargeback experts personally craft intelligent, customized chargeback disputes to help merchants recoup revenue that would otherwise be lost.

If you are ready to implement a chargeback management strategy that addresses the real causes of chargebacks, let us know. We’ll conduct an ROI analysis and show you how much more you could earn.

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Source: Visa Core Rules and Visa Product and Service Rules, last updated April, 2015

Jul 3, 2015   2151      Reason Codes    
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