Chargeback Management Guidelines For Visa Merchants

Chargeback ManagementGuidelines for Visa Merchants

Table of ContentsIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Section 1: Getting Down to Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Visa Transaction Processing—Who is Involved? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Visa Transaction Flow for Magnetic-Stripe and Chip Cards . . . . . . . . . . . . . . . . . . . 7Visa Transaction Flow for PIN-Based Point-of-Sale and ATM . . . . . . . . . . . . . . . . . 9Cardholder Disputes and Chargebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Visa Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Visa Rules for Returns and Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Section 2: Copy Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Transaction Receipt Requirements—Card-Present Merchants . . . . . . . . . . . . . . . 22Transaction Receipt Requirements—Card-Absent Merchants . . . . . . . . . . . . . . . 23Responding to Copy Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24How to Minimize Copy Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Section 3: Chargebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Why Chargebacks Occur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Customer Dispute Chargebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Invalid Chargebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Minimizing Chargebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Chargeback Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38When Chargeback Rights Do Not Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Section 4: Chargeback Reason Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Reason Code 30: Services Not Provided or Merchandise Not Received . . . . . . 43Reason Code 41: Cancelled Recurring Transaction . . . . . . . . . . . . . . . . . . . . . . . . . 46Reason Code 53: Not as Described or Defective Merchandise . . . . . . . . . . . . . . 49Reason Code 57: Fraudulent Multiple Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 52Reason Code 60: Illegible Fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Reason Code 62: Counterfeit Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Reason Code 71: Declined Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Reason Code 72: No Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Reason Code 73: Expired Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Reason Code 74: Late Presentment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Chargeback Management Guidelines for Visa Merchants 2011 Visa. All Rights Reserved.i

Table of ContentsReason Code 75: Transaction Not Recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Reason Code 76: Incorrect Currency or Transaction Code orDomestic Transaction Processing Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Reason Code 77: Non-Matching Account Number . . . . . . . . . . . . . . . . . . . . . . . . 69Reason Code 80: Incorrect Transaction Amount or Account Number . . . . . . . . 72Reason Code 81: Fraud—Card-Present Environment . . . . . . . . . . . . . . . . . . . . . . . . 74Reason Code 82: Duplicate Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Reason Code 83: Fraud—Card-Absent Environment . . . . . . . . . . . . . . . . . . . . . . . 80Reason Code 85: Credit Not Processed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Reason Code 86: Paid by Other Means . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Reason Code 96: Transaction Exceeds Limited Amount . . . . . . . . . . . . . . . . . . . . 89Appendix 1: Training Your Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91Appendix 2: Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Appendix 3: Visa Europe Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101iiChargeback Management Guidelines for Visa Merchants 2011 Visa. All Rights Reserved.

IntroductionPurposeThe Chargeback Management Guidelines for Visa Merchants is a comprehensivemanual for all businesses that accept Visa transactions. The purpose of thisguide is to provide merchants and their back-office sales staff with accurate,up-to-date information to help merchants minimizing the risk of loss from fraudand chargebacks. This document covers chargeback requirements and bestpractices for processing transactions that are charged back to the merchant bytheir acquirer.AudienceThis book is targeted at both card-present and card-absent merchants and theiremployees outside of the jurisdiction of Visa Europe, which may have differentpractices and requirements.ContentsThe Chargeback Management Guidelines for Visa Merchants contains detailedinformation on the most common types of chargebacks merchants receive andwhat can be done to remedy or prevent them. It is organized to help users findthe information they need quickly and easily. The table of contents serves as anindex of the topics and material covered.Topics covered include:4 Section 1: Getting Down to Basics—Provides an overview of how Visatransactions are processed, from point of transaction to clearing andsettlement. A list of key Visa policies for merchants is also included.4 Section 2: Copy Requests—Includes requirements and best practices forresponding to a request for a copy of a sales receipt to resolve a cardholderdispute. Information on minimizing copy requests, ensuring legible receipts,and meeting sales draft requirements

that issue Visa cards (card issuers) and/or sign merchants to accept Visa cards for payment of goods and services (acquirers) . Visa provides card products, promotes the Visa brand, and establishes the rules and regulations governing participation in Visa programs .