Mastering Visa Chargeback Reason Codes for Dispute Success

When handling Visa chargebacks, your first cue should be to look at the reason code. Thankfully, the card network has simplified its chargeback reason code list, providing ample explanation to help you know why the chargeback occurred. Armed with this information, you can effortlessly gather proof or evidence to show that you did everything right when handling the disputed transactions.

Cardholder disputes have diverse causes, but some reason codes, like the reason code 3131933, are more frequent. This reason code deals with fraud, making it all the more important to deal with it swiftly.

Understanding the dispute reason codes is your way to ensure a good business reputation and revenue. For that reason, we’ve built this guide to help you navigate these codes.

What are Visa Chargeback Reason Codes?

These are codes that help you understand why a chargeback was initiated and the best way to respond. They often contain alphabets and numbers or maybe numbers only, like what Visa uses.

Visa chargeback reason codes highlight the cause of a chargeback. For example, you can use the card to tell if it was a customer dispute that was escalated. Another case is knowing if Visa took the chargeback decision on its own without any customer complaint. Processing errors, friendly fraud, authorization disputes, etc. are common causes of these codes.

Besides telling you why a chargeback occurred, the chargeback reason codes will also show you the evidence needed to dispute it. You’ll know which documents to submit. For example, submitting a signed receipt to show that a cardholder took delivery of your product where there is a dispute that the product was not delivered.

We’d like you to know at this point that you can prevent chargebacks, but not all the time. Some cardholders may dispute a transaction even when you’ve done nothing wrong. As such, you must be prepared to use these dispute reason codes when dealing with the dispute process.

Key Visa Chargeback Reason Codes and Their Implications

Work with the mindset that chargebacks may occur for various reasons. This will help you maintain proper documentation for all your transactions. 

A common chargeback reason code is 13.3, where the cardholder disputes that the goods or service received was not as described or is defective. This often occurs when there is a disparity between what you have on the product or service description page and what you finally sent to the customer. Simple things like a color difference can be enough to escalate this dispute to a chargeback.

Another one you should look out for is the reason code 13.1, especially if you deal with merchandise or physical products and deliveries. This code implies that the customer did not receive the goods paid for on the due date. It can be tricky to handle, but a signed receipt at the point of delivery should be enough to reverse it.

The reason code 313199 deals with unauthorized transactions, but what makes it all the more important is that it ties back to fraud. If you receive chargebacks on this code to an excessive level, you risk receiving penalties from Visa. Hence, you must provide all necessary documentation to show that you took the required steps and obtained authorization for the transaction.

True and friendly fraud are the two primary causes of the reason code 313199. In the first case, cybercriminals may steal credit card details or clone them and use them for online transactions. For friendly fraud, the cardholder may unknowingly dispute a charge they previously authorized.

How to Respond to Visa Chargeback Reason Codes

You can approach Visa for a refund if you know why the chargeback occurred and have the evidence to dispute it. The process is fairly the same for all codes, but we recommend you pay special attention to the most frequent ones, like the reason code 3131933.

With that said, here is a typical step-by-step guide on how to respond to chargebacks on your merchant account:

1. Identify the disputed transaction
2. Review the reason for the chargeback
3. Identify and gather the needed documentation as proof (examples include receipts, transaction authorization request approval, cancellation or return policy, etc.)
4. Respond to the chargeback by submitting the documentation

For reason code 3131933 and others that deal with fraud, we recommend responding as quickly as possible. That will give you time to address any inquiries or refutals that may arise after your response.

The proof of authorization you’ll need when fighting chargebacks includes the following:

• CVV2 validation
• AVS validation

The Visa Fraud Monitoring Program and Its Connection to Chargeback Reason Codes

The Visa Fraud Monitoring Program VFMP tracks merchants that receive excessive chargebacks with fraud-related codes like the reason code 3131933. Your chargeback ratio has to exceed a certain threshold to be flagged by the program. The chargeback ratio refers to the number of chargebacks you receive compared to the number of transactions you’ve made within a fixed period.

Before Visa adds you to the VFMP, it will notify you when you reach the early warning threshold. At this point, you can reduce the chargeback rate on your account and avoid joining the VFMP. If chargebacks continue excessively, Visa will subsequently add you to the program.

Chargebacks with other reason codes may be excessive, but only the fraud-related codes will be tracked for the program. We do not imply ignoring other chargebacks. On the contrary, you should keep chargebacks low to avoid other monitoring programs like the Visa Dispute Monitoring Program VDMP.

Here are some tips on how to avoid the Visa Fraud Monitoring Program:

• Employ advanced fraud protection tools and software
• Verify customer details and use address verification systems (AVS) on your transactions.
• Use CVV/CVC for card-not-present transactions
• Use advanced tools to monitor transaction patterns for your customers
• Maintain open communication with your customers
• Respond to complaints promptly and provide refunds where needed.

If you’ve been added to the VFMP, you can still employ the above steps to reduce your chargebacks and exit the program.

Best Practices for Preventing Chargebacks Related to Visa Reason Codes

You can reduce your chargeback rates by implementing a few preventive strategies. Treat every transaction with the utmost importance and do not skip any necessary step, even with long-time customers. Using that approach will prevent chargebacks to a great degree. However, some will still occur if customers unknowingly dispute your transactions (friendly fraud).

Whether there is actual fraud or not, understanding chargeback reason codes is vital in disputing Visa chargebacks. As such, the first step when you receive a dispute reason code is to review it extensively. If necessary, ask for more details regarding the dispute.

With that said, here are a few tips to prevent chargebacks:

• Upgrade your payment terminals to EMV-enabled terminals if you have yet to do so.
• Wait for authorization approval before proceeding with a transaction.
• Request an alternative payment method if a card fails.
• Do not force transactions.
• Ensure your return and cancellation policies are clear on the check-out page or physical receipt.
• Use advanced fraud detection tools.
• Request AVS and CVV matching on your transactions.
• Provide channels for customers to contact you.

Conclusion

The Visa chargeback reason codes are your ticket out of chargeback disputes. Avoid taking a general approach to your chargebacks. Instead, review each code and respond according to the dispute and the evidence required.

Only by mastering these codes, like reason code 3131933, will you keep your chargebacks down and avoid penalties from Visa. Your business will maintain a solid reputation, and your revenue will remain stable.