Merchants who receive a chargeback for a transaction placed with a Visa card may encounter reason code 77, 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. Merchants who believe they have received an invalid chargeback under reason code 77 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is Visa Chargeback Reason Code 77?
Visa chargeback reason code 77 falls under the “Point-of-Interaction Error” category. The shorthand description is “Non-Matching Account Number.” This reason code means that the merchant, or their acquiring bank, processed an unauthorized transaction against an account number that does not match any cardholder account number on the issuing bank’s master file.
It is not common to see this type of chargeback if you’re following the correct transaction procedures and obtaining authorization approval before submitting a transaction. Most payment processing systems will return clear error messages if you attempt to even initiate a transaction using an invalid account number. To be able to actually submit one through to the issuing bank, there are a number of safeguards you would have to disable or ignore. Nevertheless, human error and system glitches do allow this mistake to occur, and sometimes it happens at the acquirer level.
What Scenarios Might Lead to This Chargeback?
Unless the acquiring bank is to blame, this chargeback is usually the fault of merchant error. It may happen when a merchant is manually keying in a transaction for some reason, and enters the wrong account number. It may also occur if the cardholder deliberately or accidentally provides an erroneous account number.
Of course, for the conditions necessary for this chargeback’s invocation to occur, the merchant must make a second error: submitting the transaction without authorization. An authorization approval request for a non-existent or invalid account number should always return a “Declined” response code.
While there are emergency situations and unusual circumstances where manual keying is necessary, merchants should always proceed with extreme caution whenever they’re stepping outside of the normal established procedures for transaction processing.
When merchants break or bend the rules, they often find themselves stuck with chargebacks that they’re entirely liable for, with no good way to fight them through the representment process.
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 basis for it is false or erroneous. Your chargeback response should include the following:
- Documented proof, such as a sales receipt or transaction log, which proves that the transaction was processed to the correct, valid account number.
How Can Merchants Prevent this Chargeback Code?
As always, the first and best safeguard against chargebacks like this is to request authorization approval before submitting any transaction, and proceed only when and if you receive a clear and unambiguous “Approved” response code.
Beware of cardholders who come up with stories and excuses for why you need to lay aside your normal processes and manually key in their card number, skip the authorization process, or otherwise expose yourself to chargeback liability on their behalf. Even loyal and seemingly trustworthy customers may try to take advantage of merchants at times.
The following tips 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.
- Pay close attention to authorization response codes that are sent back to you and follow the guidelines specified by your acquirer or payment processor.
- Never “force” a transaction to go through without authorization, or after receiving a non-approval response.
- Train your staff on proper transaction handling procedures.
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.