Merchants who receive a chargeback for a transaction placed with a Visa card may encounter reason code 57, 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 merchant fraud, friendly fraud, or merchant error.
Merchants who believe they have received an invalid chargeback under reason code 57 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Visa Chargeback Reason Code 57?
Visa chargeback reason code 57 falls under the “Fraud” category. The shorthand description is “Fraudulent Multiple Transactions.” This reason code is used when a cardholder is claiming that a merchant has processed multiple unauthorized transactions against their Visa card.
This situation can occur when a merchant accidentally enters and processes multiple identical transactions without voiding any of them, or when an unethical merchant fraudulently processes multiple transactions on a cardholder’s account without their authorization.
What Scenarios Might Lead to This Chargeback?
This reason code is intended for use in situations involving merchant fraud or merchant error. When a merchant processes multiple transactions based on a single authorized purchase, whether out of intent to defraud the cardholder or due to some error, the cardholder can dispute the duplicate transactions under this reason code.
Sometimes merchants may process a single sale in more than one transaction for legitimate reasons—for example, the cardholder may have elected to pay in installments, or the merchant has a policy of charging only as products become available to ship. In these instances, cardholders may become confused when they see more than one transaction and may assume fraud is occurring, even though that is not the case. The result is a friendly fraud chargeback.
What are the Important Timeframes?
For most disputes, Visa recommends that its cardholders file their claim within 120 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 either of the following:
- If the disputed transactions are separate and legitimate purchases, provide sales receipts or invoices, proof of delivery, and proof that each transaction was authorized by the cardholder.
- If you have already reversed the improper transactions or issued credits to the cardholder to refund all of the disputed transaction activity, provide proof that you have done so.
How Can Merchants Prevent this Chargeback Code?
This reason code is primarily designed as a recourse against fraudulent merchants who steal money from their customers by charging multiple transactions on a card after a customer makes a single authorized purchase. It’s easy enough to avoid being an unethical and fraudulent merchant, but sometimes multiple redundant transactions are processed in error. This can happen when you have to start over a transaction in progress but neglect to void it out, or when you attempt to submit a transaction multiple times due to software errors or unfamiliarity with your payment processing system.
The following best practices can help you avoid this kind of chargeback:
- If possible, immediately process a transaction reversal for any improper, erroneous, or unauthorized transactions.
- If you mistakenly process multiple transactions for a single purchase and it’s too late to process a transaction reversal, refund the cardholder immediately.
- If a single purchase needs to be broken down into multiple transactions to be processed separately, make sure the cardholder is fully informed about this and agrees to your policies.
- Whenever possible, obtain the cardholder’s signature on a copy of the terms of sale they are agreeing to, as well as each transaction receipt.
- Train your staff on the correct transaction processing procedures for your point-of-sale terminals and payment processing software, and make sure they know how to process a transaction reversal in case an erroneous transaction is submitted.
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 if 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.