Visa Chargeback Reason Code 12.1: Late Presentment

What is Visa Chargeback Reason Code 12.1?

The Visa chargeback reason code 12.1 refers to the late presentment of a transaction. It falls under processing errors and involves submitting a transaction for final processing outside of the required time. Issuers will use the code for chargebacks when they can no longer process a payment because of the late presentment.

Transactions often occur within minutes. Notwithstanding, each transaction goes through several stages before the final processing. These stages are as follows:

• Authorization: At this stage, your payment system verifies if the cardholder has sufficient funds to conduct the transaction. Once the funds are confirmed, the transaction moves to the next stage.
• Payment capture: The payment system captures the transaction details. These include the amount, date, and the cardholder’s details. The captured details will be ready for final processing.
• Clearing and settlement: This stage is where the actual fund transfer occurs. The merchant, the acquiring bank, and the issuer will reconcile the transaction details.

Delaying presentment is possible. We understand that you may have opted for a delay for valid reasons. However, submitting too late can set you up for a chargeback if the issuer can no longer process the transaction to the cardholder’s account.

The issuer often institutes chargebacks under this reason code. They do so because processing the final transaction to transfer the funds falls on them. It is up to them to determine if the cardholder’s card can still handle the transaction.

You can still dispute it even if you submitted the presentment late and incurred a chargeback under this code. However, you must prove that you operated at the right time. Anything other than that will cause the chargeback to stick.

We’ll show you how to approach chargebacks with the reason code 12.6. In the meantime, let’s explore the reasons that could cause it. You might need to dig deeper to get the complete picture.

Why Did It Happen?

Chargebacks with reason code 12.1 occur when you do not submit within the allocated time. As per Visa’s terms, all transactions should be submitted within 180 days. Anything outside will void the transaction, and chargebacks will ensue.

Submitting outside of 180 days is one of the reasons for chargebacks under this code. You can submit within 180 days and still incur the chargeback. That happens if the cardholder’s account is no longer in good standing to process the transaction.

The possible reasons an account might lose good standing to process a transaction include the following:

• The account expired before you submitted the presentment
• The account was closed before your submission
• The account exceeded its credit limit before your submission
• Theft or loss caused the cardholder to block the card
• Any other reason that renders the card unusable

You are not at fault for whatever happens to the card. However, the issuer will shift the liability to you and process the chargeback since the cardholder can no longer process the transaction. The above reasons are only viable within 180 days of the transaction authorization.

Submitting a presentment refers to depositing a transaction receipt with your acquirer. The latter will be passed on to the issuer for the final settlement and fund transfer.

There are several reasons for delaying the presentment submission. Sometimes, you may need more time to review a transaction or add it to a batch submission later. Other reasons include resolving a dispute with the cardholder or assessing the risk of a suspicious transaction.

Your intentions may be noble, but the issuer operates within its rules. That said, some cardholders may want to capitalize on the delayed submission to avoid paying for the transaction. They might close or block the account after reporting the card as stolen or lost.

Since it is challenging to know the true intentions of the cardholder, you must dispute the chargeback by proving you did everything right. Even so, the aim should be to avoid chargebacks of this nature in the future.

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How to Fight Visa Chargeback Reason Code 12.1: Late Presentment

You can dispute chargebacks under this reason code, but the window is narrow. Your dispute should come in within 30 days of receiving the chargeback.

The biggest assurance to disputing chargebacks under this code comes if you submit the presentment within the applicable deadline. Anything outside that, and you risk incurring the chargeback permanently.

With that in mind, here’s what you can do to dispute chargebacks under reason code 12.1:

• Submit the document to prove you did not submit a late presentment. That should include your submission and the transaction dates to prove that you operated within the applicable deadline.
• Submit a document to prove your credit refund to the cardholder before the chargeback. The proof should include the transaction date and amount to show that your refund is the same as the chargeback.
• Submit documents to show the alternative agreement you reached with the cardholder. It can be a duly signed written correspondence to show that the cardholder does not wish to dispute the chargeback.

Chargebacks under this reason code may occur immediately after your submission or much later. If you cannot dispute the chargeback, accept it and implement measures to prevent future occurrences. The key is reducing chargebacks to maintain a good business reputation and avoid blacklisting.

How to Prevent Visa Chargeback Reason Code 12.1: Late Presentment

We’ve seen that chargebacks with reason code 12.1 are often caused by merchant errors. The delayed submission is the primary cause. Hence, your preventive measures will revolve around eliminating the delays.

Here are a few preventive measures we recommend for chargebacks under reason code 12.1:

• Endeavor to prepare and submit your presentment within the same day of the transaction.
• If a same-day submission is not feasible, ensure to keep to the applicable timeframe from the issuer.
• Use authorization holds when there is a need to delay a transaction.
• Opt for transaction data capture terminals if you currently use manual entry and submission.
• Deposit your receipts within 20 days if you operate a multi-location, centrally accumulated business.
• Respond promptly and thoroughly to issuer inquiry requests.

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