Visa
Chargeback Reason Codes

The Visa chargeback reason codes system underwent a major overhaul in April 2018 as part of their new Visa Claims Resolution (VCR) initiative. All of Visa’s existing reason codes were condensed into four key groupings: fraud, authorization errors, processing errors, and customer disputes.

The new regulations simplify certain aspects of the dispute process and help stop some fraudulent claims before they become chargebacks. Other card networks are expected to follow suit, and if so, it could help lessen confusion over the terminology and the many codes throughout the industry.

That said, the new Visa chargeback reason codes retain some of the fundamental problems we saw with their pre-VCR list. The Visa reason codes can’t reliably prevent friendly fraud. Thus, you will need to be careful when determining when and how to engage in a chargeback dispute:

Fraud

10.1

EMV Liability Shift Counterfeit Fraud

10.1

EMV Liability Shift Counterfeit Fraud

Description

The cardholder claims a counterfeit chip card was used at a POS system where the transaction was not processed as a chip transaction.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

Either a) the merchant's card processor did not transmit the full chip data to Visa; or b) a chip-reading terminal was not actually used.

Prevention Steps

  • Upgrade to compliant terminals
  • Make sure to obtain the correct Cardholder Verification Method (CVM), such as a signature or PIN
  • Take an imprint (either electronic or manual) for every card-present transaction
  • Train staff on the proper handling of terminal issues

10.2

EMV Liability Shift Non-Counterfeit Fraud

10.2

EMV Liability Shift Non-Counterfeit Fraud

Description

The cardholder claims this activity was fraudulent, but blames the merchant’s EMV terminal (card-present).

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

In a card-present transaction, either: a) a chip-reading terminal was not used; or b) a chip-reading terminal was used, but the machine was not PIN-compliant.

Prevention Steps

  • Upgrade to EMV PIN-compliant terminals
  • Always obtain the appropriate Cardholder Verification Method (CVM)
  • Take an imprint (either electronic or manual) for every card-present transaction
  • Train staff on the proper handling of terminal issues

10.3

Other Fraud: Card-Present Environment / Condition

10.3

Other Fraud: Card-Present Environment/Condition

Description

A fraudulent transaction was made using the actual credit card, according to the cardholder.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

Merchant did not ensure that the card was either swiped or that the chip was read; merchant did not obtain manual card imprint on a key-entered transaction; a card-not-present transaction was not identified as such.

Prevention Steps

  • Upgrade to compliant terminals
  • Make sure all card-present transactions are either chip-read or magnetic stripe-read
  • Obtain an imprint or perform additional validation, such as PIN

10.4

Other Fraud: Card-absent Environment / Condition

10.4

Other Fraud: Card-absent Environment/Condition

Description

The cardholder claims an unauthorized transaction occurred without the physical card involved.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

In a card-absent environment (online/phone/direct mail sales, etc.), either a) an unauthorized (fraudulent) claim was processed using an invalid or stolen account number; or b) the cardholder believes the transaction to be fraudulent due to an unclear or confusing merchant descriptor.

Prevention Steps

  • Always request authorization for mail order, telephone order, internet, and recurring transactions, regardless of the dollar amount
  • Obtain additional validation, such as an imprint or PIN
  • Clearly and properly identify card present and card absent transactions
  • Clearly and properly identify card present and card absent transactions

10.5

Visa Fraud Monitoring Program

10.5

Visa Fraud Monitoring Program

Description

Visa’s Fraud Monitoring Program flagged the transaction.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

For merchants in the Visa Fraud Monitoring Program only: Visa identifies a potentially fraudulent transaction and informs the issuer, AND the issuer has not successfully filed a chargeback under another reason code.

Prevention Steps

  • Keep accurate records

Authorization

11.1

Card Recovery Bulletin

11.1

Card Recovery Bulletin

Description

The merchant apparently did not get authorization for the transaction through an account number listed in the Card Recovery Bulletin.

Time Limit

(Issuer/Cardholder)

Consumers have 75 days from transaction in which to file

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

A transaction is processed for an amount beyond the merchant's floor limit, and despite the account number being listed in the Card Recovery Bulletin for that day and region.

Prevention Steps

  • Always check the Card Recovery Bulletin (CRB) when required
  • Always check the Card Recovery Bulletin (CRB) when required
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11.2

Declined Authorization

11.2

Declined Authorization

Description

The authorization was declined, but the transaction was processed anyway.

Time Limit

(Issuer/Cardholder)

Consumers have 75 days from transaction in which to file

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant does not request authorization; the merchant makes multiple attempts on a card that is declined, or otherwise attempts to force, circumvent, or override a declined authorization.

Prevention Steps

  • Obtain authorization
  • Discontinue the transaction if a card has been declined
  • Ask for an alternate form of payment
  • Ask for an alternate form of payment

11.3

No Authorization

11.3

No Authorization

Description

The transaction was processed without any attempt to gain authorization, or authorization was requested after the fact or for a different amount.

Time Limit

(Issuer/Cardholder)

Consumers have 75 days from transaction in which to file

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant does not request authorization; the merchant waits a day or more before requesting authorization; the merchant requests authorization for one amount, then adds a tip to the total before processing.

Prevention Steps

  • Always authorize every transaction in accordance with the Visa Rules
  • Obtain authorization on the day of the transaction
  • Don't include the tip on a previously authorized amount

Processing Errors

12.1

Late Presentment

12.1

Late Presentment

Description

The transaction was not sent to Visa within the required time limits.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant does not process a transaction in a timely manner; the account was no longer in good standing at the time of processing.

Prevention Steps

  • Send completed transactions to your card processor as soon as possible (preferably on day of the sale)

12.2

Incorrect Transaction Code

12.2

Incorrect Transaction Code

Description

The wrong transaction code was used.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant processed a debit instead of a credit, processed a credit instead of processing a reversal, or in some other way processed a transaction that differed from the obtained authorization.

Prevention Steps

  • Double check calculations and the final transaction amount before processing
  • Train staff on the proper procedures for processing credits, debits, and reversals

12.3

Incorrect Currency

12.3

Incorrect Currency

Description

The merchant made one or more errors related to the transaction currency.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The transaction currency differs from the currency transmitted through Visa; the cardholder was not advised or did not agree that Dynamic Currency Conversion (DCC) would occur.

Prevention Steps

  • Inform cardholders of the use of currency conversion and applicable fees
  • Always give the cardholder the option to make the purchase using local currency
  • Train your sales staff on proper procedures for transaction using a different currency

12.4

Incorrect Account Number

12.4

Incorrect Account Number

Description

The account number in the authorization does not match the account number used in the transaction.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The transaction was processed to an incorrect account number; the adjustment was processed more than 45 days from transaction date; an adjustment was posted to a "closed" or "non-sufficient funds" account more than 10 days after the transaction date; an adjustment was processed more than once for the same transaction; the cardholder disputes the validity of the adjustment.

Prevention Steps

  • As far as possible, swipe card or read chip for transactions
  • Process all transactions and adjustments in a timely manner
  • Double-check numbers before processing
  • Train staff on the proper procedures for processing transactions

12.5

Incorrect Amount

12.5

Incorrect Amount

Description

The amount in the authorization does not match the amount from the transaction.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

An error was made entering numbers manually; the amount of the transaction was changed without the cardholder's consent.

Prevention Steps

  • As far as possible, swipe card or read chip for transactions
  • Double check calculations and the final transaction amount before processing
  • Don't change the transaction amount without the cardholder's consent

12.6

Duplicate Processing / Paid by Other Means

12.6

Duplicate Processing/Paid by Other Means

Description

A single transaction was processed two or more times.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant tries to submit multiple batches at one time; the transaction has multiple receipts; the transaction is duplicated in the merchant's system; the transaction was processed but the cardholder paid for the same merchandise or service by other means.

Prevention Steps

  • Review transaction receipts before depositing
  • Submit a batch only one time
  • Void/credit any duplicate transactions
  • Deposit receipts with one acquirer
  • Train staff on the proper procedures for handling credits

12.7

Invalid Data

12.7

Invalid Data

Description

An authorization was obtained using invalid or incorrect data.

Time Limit

(Issuer/Cardholder)

Consumers have 75 days from transaction in which to file

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant submits an authorization request containing an incorrect transaction date, MCC, merchant or transaction type indicator, country or state code, or other required field.

Prevention Steps

  • Double-check all required fields

Customer Disputes

13.1

Merchandise / Services Not Received

13.1

Merchandise/Services Not Received

Description

Cardholder claims goods or services were not received or not received by the agreed upon date.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant delays delivery; the merchant charges the cardholder prior to shipping or delivery; the merchant ships on time or has the product available for pick-up but does not inform the customer; the cardholder fraudulently claims the goods or service did not arrive.

Prevention Steps

  • Provide goods and services as promised
  • Don't charge the cardholder's account until after the product has been shipped
  • Let cardholders know when the product has been shipped and the estimated date for delivery
  • Use tracking and delivery confirmation
  • Make sure products are available for pick up when specified

13.2

Canceled Recurring Transaction

13.2

Canceled Recurring Transaction

Description

The cardholder claims to have been charged for a canceled recurring transaction.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The cardholder withdraws permission to charge the account or cancels payment for subscription; cardholder or issuing bank cancels the account; merchant neglects to cancel a recurring transaction; merchant processes a transaction after being notified the cardholder's account was closed.

Prevention Steps

  • 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

13.3

Not as Described or Defective Merchandise / Services

13.3

Not as Described or Defective Merchandise/Services

Description

The cardholder claim that the goods or services were defective or not as described prior to the transaction.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchandise was damaged in transit; the merchandise does not match the merchant's description; the cardholder disputes the quality of the product; the cardholder fraudulently claims the merchandise is damaged. (Note: Merchant may not direct the customer to the manufacturer for resolution. Also, this reason code supersedes merchants' return policy.)

Prevention Steps

  • Double check orders to ensure the correct item is shipped
  • Package items carefully to avoid damage during shipping
  • Provide honest, detailed product descriptions
  • Accept returns from cardholders and issue credit promptly
  • Never sell counterfeit products

13.4

Counterfeit Merchandise

13.4

Counterfeit Merchandise

Description

The merchandise was identified as counterfeit by the owner of the intellectual property, a government agency, or a neutral third-party expert.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant is unaware of the counterfeit merchandise; the customer fraudulently claims the goods are not genuine. (Note: This reason code supersedes merchants' return policy.)

Prevention Steps

  • Certify the authenticity of all goods

13.5

Misrepresentation

13.5

Misrepresentation

Description

The cardholder claims a purchased item or service was misrepresented and alleges false advertising.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant's product descriptions are vague, inaccurate, or insufficient. Examples of typical merchant types for this dispute include: timeshare reseller, debt consolidation, credit repair, foreclosure relief services, investment products, and the like. (Note: This reason code supersedes merchants' return policy.)

Prevention Steps

  • Create honest, detailed product descriptions
  • Add photos/videos to descriptions
  • Never sell counterfeit products

13.6

Credit Not Processed

13.6

Credit Not Processed

Description

The customer claims a credit was due but never processed.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant didn't credit the account; the merchant issued the credit but not in time to be posted to the customer's most recent statement; the customer misunderstood the return policy; the merchant processed a transaction receipt that should have been voided.

Prevention Steps

  • Share the return policy with the cardholder before completing the transaction
  • Issue credits promptly
  • Notify the cardholder when the credit has been issued

13.7

Cancelled Merchandise / Services

13.7

Cancelled Merchandise/Services

Description

The cardholder claims this activity was fraudulent, but blames the merchant’s EMV terminal (card-present).

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

The merchant has not yet issued a due credit; issued the credit but it hasn't posted to the customer's account yet; the merchant the customer misunderstood or was never clear on the return policy.

Prevention Steps

  • Clearly share the return policy with the cardholder before completing the transaction
  • In cases of limited returns, "no returns" or similar words should be on all copies of the transaction receipts and supplied to the cardholder
  • Issue credits promptly
  • Always notify the cardholder when the credit has been issued

13.8

Original Credit Transaction Not Accepted

13.8

Original Credit Transaction Not Accepted

Description

A voided transaction receipt was not processed (applies to Europe and inter-regional areas only).

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

Either the cardholder does not accept the credit, or the issuer does not allow Original Credit Transactions (OCT's) on certain types of cards due to local law.

Prevention Steps

  • Maintain accurate records
  • Familiarize yourself with usage laws for areas you serve

13.9

Non-Receipt of Cash or Load Transaction Value

13.9

Non-Receipt of Cash or Load Transaction Value

Description

Cardholder did not receive the full cash withdrawal at an ATM.

Time Limit

(Issuer/Cardholder)

120 Days

Time Limit

(Acquirer/Merchant)

30 days (cut to 20 days in 2019)

Typical
Causes

Faulty ATM

Prevention Steps

  • Reconcile ATMs in a timely manner
  • Adjust any out of balance machines promptly
  • In case of a discrepancy, process a credit/reversal as soon as possible

Remember: how you engage with the Visa chargeback reason codes will be affected first and foremost by how well you can leverage the VCR system, including the Visa Merchant Purchase Inquiry plugin. Click here to learn how Chargebacks911® can help you make the most of your next dispute.