Visa Chargeback Reason Code 11.3: No Authorization

What is Visa Chargeback Reason Code 11.3?

The chargeback reason code 11.3 represents chargebacks caused by unauthorized transactions. It could be that the transaction requires authorization, but it was not used or requested. Or the authorization request came after the payment had been processed.

Cardholders who believe they did not authorize a transaction (online or offline) will dispute it, resulting in chargebacks. They may not always be right, as a few merchant errors can lead to disputes. You must avoid these mistakes to reduce the possibility of a chargeback to the barest minimum, if possible.

Card authorization verifies the card’s ability to cover the transaction. The request goes out to the issuer before the payment is processed. This process should be automatic once the cardholder taps, swipes, or inserts the card for payment (depending on the payment terminal).

Authorization is also essential for internet, phone, or mail orders. Processing payments when the authorization request is not sent or without approval will most likely lead to chargebacks under this reason code.

Careful handling of transactions should prevent this chargeback from happening. Nevertheless, the causes of chargebacks under this reason code are not limited to merchant errors. Cardholders may also be responsible for the chargeback even when you’ve done everything correctly.

We recommend following all authorization procedures when processing payments. Bypassing them will undoubtedly result in this chargeback, causing discomfort and loss if you are in the wrong. We’ll show you how to fight it, but your efforts will only yield results if you follow the correct procedures.

Friendly fraud or merchant error can both be the cause of chargebacks with reason code 11.3. The latter can be easily disputed. However, as addressed in the subsequent section, we advise you to note the merchant errors that can cause it.

Why Did It Happen?

Chargebacks with reason code 11.3 occur when authorization is not obtained before processing a transaction. Two things stand out, as shown below:

The correct processing procedure requires the following:

• A proper authorization request
• A valid authorization approval

The authorization must be correct and valid. Once the request is received, you should receive a message with an “Approved” response. Any other response not giving the issuer’s approval to continue the transaction will likely cause a chargeback.

In that case, the card may be stolen, lost, or compromised somehow. That is why authorization is needed to prevent this chargeback. With that in mind, the following are reasons this chargeback may occur:

• No authorization request was sent for the transaction
• The authorization request was sent after the transaction was completed

Faulty payment terminals may cause any of the above reasons, leading to chargebacks. Anything that prevents you from sending authorization requests and receiving approval will cause chargebacks under this reason code.

Cardholders may be persuasive in asking merchants to push a payment through even without sufficient authorization. That will require turning off the safety features that should detect this error. However, doing that can cause the issuer to file chargebacks that are impossible to fight.

Another likely cause of this chargeback is obtaining authorization for one amount and using it to process a different amount, usually higher. This error might fall under another reason code, but since authorization is taken from one and applied to another, you can get it here, too.

Regardless of how persuasive cardholders are, insist on getting authorization approval before processing payment. Also, avoid using terminals that can bypass authorization requests.

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How to Fight Visa Chargeback Reason Code 11.3: No Authorization

Issuers have 75 days to file chargebacks under this reason code. You can dispute it if the chargeback date is more than 75 days from the transaction date. However, this issuer error is rare.

Our approach to fighting this chargeback will come back to your end and what you did correctly or wrongly. With that in mind, here are the methods you can use:

• If you obtained authorization: Notify your acquirer or card processor and provide evidence to support your claims. The proof should show the response code, the approved transaction amount, and the date. These should clear all doubts and cause a reversal of the chargeback.
• If you have contacted the cardholder and resolved the issue: Provide evidence that you have resolved the case with the cardholder. It should also include credit details like the amount and the transaction date. These prove that you already issued a refund before the chargeback.
• If the cardholder no longer wants to dispute the transaction: Provide emails or letters from the customer showing their withdrawal of the claims. That provides leverage to reverse the chargeback and receive a refund.
• If the clearing records list has an incorrect transaction date: Show evidence that the transaction date is erroneous. Ensure you provide the correct transaction date.

Some payments require special authorization. These transactions require a unique approach to fighting chargebacks. You should provide all the response codes to your authorization requests, including the following:

• The initial transaction date
• The final transaction date
• The amounts from the start to the finish

You’ll also have to proof the following:

• The initial authorization request was for an estimated amount
• You increased the transaction amounts subsequently
• All the authorization requests have the same transaction identifier

One or more of the above may be required.

How to Prevent Visa Chargeback Reason Code 11.3: No Authorization

Authorizing all transactions as per Visa rules will prevent this chargeback. Besides that, you should be cautious of payments and error messages.

The following are ways to prevent chargebacks under reason code 11.3:

• Ensure transactions receive an immediate and clear approval response before proceeding.
• Flag transactions with failed authorization approval and request an alternative payment method.
• Train your staff on following Visa rules and regulations for transactions requiring special authorizations. Each authorization level should be confirmed and recorded before proceeding to the next.
• Upgrade your payment terminals to the latest version to avoid bypassing authorization requests.
• Do not bypass authorization requests, no matter how persuasive the cardholder is.

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