Visa Chargeback Reason Code 11.2: Authorization

chargeback reason code 11.2Merchants who receive a chargeback for a transaction placed with a Visa card may encounter reason code 11.2, which indicates an improperly authorized transaction that the cardholder does not believe they should be responsible for paying. The actual underlying cause of this chargeback may be true fraud, friendly fraud, or merchant error. Merchants who believe they have received an invalid chargeback under reason code 11.2 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.

What is Visa Chargeback Reason Code 11.2?

Visa chargeback reason code 11.2 falls under the “Authorization” category. The shorthand description is “Declined Authorization.” You will see this reason code used when a merchant sends an authorization approval request for a transaction, receives a “Decline” or “Pick Up Card” response, and submits the transaction anyway.

The transaction authorization process is one of the merchant’s best safeguards against chargebacks. Authorization-related chargebacks are difficult to fight, and merchants can only successfully represent these transactions in rare circumstances where the issuer or card network has made some error in assigning the chargeback in the first place. For the most part, merchants are entirely liable when a chargeback follows a transaction that was not properly authorized.

Sometimes, an authorization request may return a “Decline” response because of fixable problems—the merchant keyed something in wrong, the card was dirty and could not be read properly, or a network error occurred—and in these cases, you may be able to try the card again and receive an “Approved” response. Cardholders will often ask you to try a card again when it gets declined, but merchants must understand the risks involved in doing so.

What Scenarios Might Lead to This Chargeback?

When this chargeback occurs, it can usually be blamed on merchant error. When a merchant forces a transaction to go through after receiving any kind of decline response, they are circumventing the protocols designed to protect them and their customers.

If the cardholder later disputes the transaction, it may be because of true fraud or friendly fraud—but the bottom line is that the merchant’s disregard for the authorization response is why the chargeback is happening.

Get the guide, Chargebacks 101: Understanding Chargebacks & Their Root Causes

What are the Important Timeframes?

For this dispute, Visa requires that its cardholders file their claim within 75 calendar days of placing the transaction. The acquirer and/or merchant have 20 calendar days to respond to this chargeback after it is filed.

How Can Merchants Fight this Chargeback Code?

Merchants can fight this chargeback if the cardholder’s claims are false. Your chargeback response should include the following:

  • If you received a “Decline” response, then sent a subsequent authorization request that was approved, provide documentation that proves that you received an approval response code.
  • For car rental, cruise line, or hospitality merchants dealing with a disputed transaction that had multiple authorizations, provide documentation that shows the rental/embarkation/check-in date, the return/disembarkation/check-out date, and the dates, amounts, and approval response codes for each authorization.
  • If you have already processed a refund for the transaction in question, provide documentation that proves you have credited the cardholder’s account.
  • If you have resolved the issue directly with the cardholder, provide proof, such as written correspondence, that proves they no longer wish to dispute the charge.

How Can Merchants Prevent this Chargeback Code?

To avoid “Authorization” category chargebacks, always obtain proper authorization approval prior to submitting a transaction. While some “Decline” responses may indicate minor errors in processing or handling that can be resolved on a second attempt, you should always proceed with caution and use your best judgment when allowing multiple authorization attempts.

Any response other than immediate “Approved” is a warning sign that you may be on the hook for a future chargeback if you allow the transaction to continue on that payment card.

The following best practices can help you avoid this kind of chargeback:

  • Always obtain authorization approval before processing any transaction.
  • If a “decline” or ambiguous code is sent in response to an authorization request, ask the cardholder to furnish an alternate method of payment.
  • If the cardholder insists on retrying a declined card, make sure you receive an authorization approval before finalizing the transaction.
  • Always follow the rules and regulations provided by Visa and your acquirer when processing transactions involving multiple authorizations.

About Visa Chargeback Reason Codes

Reason codes are alphanumeric codes that provide the justification for granting a chargeback. Pursuant to the Fair Credit Billing Act of 1974, cardholders have the right to dispute unauthorized or erroneous charges and issuing banks must reverse a disputed transaction of the cardholder’s claim is valid.

When a cardholder contacts their issuing bank to dispute a transaction and receive a chargeback, the dispute is assigned a reason code that most closely matches the substance of the cardholder’s claims. The reason code provides the merchant and other stakeholders in the dispute with a concise explanation for why a chargeback has been granted.

Each card network—Visa, Mastercard, American Express, and Discover—defines and maintains their own unique set of reason codes, which are applied to disputes by the banks that issue credit and debit cards under their brands.

Visa specifies 46 reason codes under the categories of Fraud, Authorization, Point-of-Interaction Error, Consumer Disputes, and Processing Errors. Visa uses a numeric scheme for its chargeback reason codes.

Understanding chargeback reason codes is one of the most essential parts of effective chargeback management. Identifying the chargeback reason code and the evidence required to fight it is the first step in chargeback representment, and analyzing your chargeback reason codes can provide you with insights into what types of disputes are causing you the most trouble. With this information, you can determine the root causes of your chargebacks and take action to prevent them from reoccurring.