Visa Chargeback Reason Code 76: Point-of-Interaction Error

Table of Contents

1. What is Visa chargeback reason code 76?
2. What causes code 76 chargebacks?
3. What's the time limit to respond to code 76 chargebacks?
4. How can merchants fight code 76 chargebacks?
5. How can merchants prevent code 76 chargebacks?
6. About Visa chargeback reason codes

Merchants who receive a chargeback for a transaction placed with a Visa card may encounter reason code 76, which indicates an improperly processed transaction that the cardholder does not believe they should be responsible for paying. The actual underlying cause of this chargeback is usually merchant error or friendly fraud. Merchants who believe they have received an invalid chargeback under reason code 76 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.

What is Visa chargeback reason code 76?

Visa chargeback reason code 76 falls under the “Point-of-Interaction Error” category. The shorthand description is “Incorrect Currency or Transaction Code.” This reason code indicates that the merchant processed a transaction using the wrong type of currency or an inappropriate transaction code.

What causes code 76 chargebacks?

This chargeback is usually attributable to merchant error. When processing complex transactions that involve currency conversion or special transaction types, untrained or inexperienced staff may enter the wrong information and process the transaction incorrectly.

If the cardholder notices the error they may dispute it with their bank, especially if the error resulted in an unfavorable conversion rate or an erroneous charge.

Dynamic Currency Conversion is often one of the motivating factors behind this chargeback, as it sometimes ends up costing cardholders more than they expect. Even if the cardholder did agree to use Dynamic Currency Conversion, they may file a friendly fraud chargeback claiming otherwise if they are sufficiently displeased with the final transaction amount.

What's the time limit to respond to code 76 chargebacks?

The acquirer or merchant has 30 days to respond to a chargeback filed under reason code 76.

How can merchants fight code 76 chargebacks?

Merchants can fight code 76 chargebacks if they have documentation showing they followed Visa's procedures for currency conversion and transaction codes.

Your chargeback response should include the following:

• If the chargeback carries the “Credit Refund” modifier, provide an explanation, with documents if possible, that shows why a credit transaction was appropriate rather than a reversal or adjustment.
• If the chargeback carries the “DCC Selected by Merchant” modifier, provide a copy of the transaction receipt and documented proof that the cardholder chose and approved the use of Dynamic Currency Conversion.
• If the chargeback carries the “DCC Unknown/Refused” modifier, provide proof furnished by your acquiring bank that you are registered to offer Dynamic Currency Conversion, along with a copy of the transaction receipt that displays your local currency.
• If the chargeback carries the “Incorrect Transaction Code” modifier, provide transaction receipts or other documents that show why the transaction code you used was correct and appropriate.
• If the chargeback carries the “Transaction Currency Mismatch” modifier, provide transaction receipts or other documents that show that you used the correct transaction currency.

How can merchants prevent code 76 chargebacks?

 One way to avoid chargebacks related to currency conversion is to reject foreign currency transactions, but this isn’t a realistic option for everyone. Merchants who accept foreign currencies should make sure they and their employees know all the rules and procedures related to the process.

Make sure you fully explain the currency conversion options and costs to your customers before processing their transactions to avoid dissatisfaction.

The following tips can help you avoid this kind of chargeback: 

• Do not use Dynamic Currency Conversion as the default option when processing transactions. Ask the customer if they want to use the service, but don’t make it mandatory or apply it automatically.
• Always inform customers ahead of time about any currency conversion that needs to take place, as well as any applicable fees they may be charged.
• Always give customers the option to pay using local currency.
• Train your staff on the use of transaction codes and the correct procedures for handling foreign currency transactions. Make sure you have established protocols for dealing with different currencies.

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.

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