Visa Chargeback Reason Code 12.5: Incorrect Amount

What is Visa Chargeback Reason Code 12.5?

This reason code 12.5 applies when a cardholder claims the transaction amount is incorrect. It could be for a merchandise or service purchase, covering online and offline (point of sale) payments. While disputes can be made for amounts less than the actual transaction, cardholders primarily dispute when the payment exceeds what was expected.

The total amount for sales is often stated on the checkout stand or page (for internet transactions). This amount might be higher than the merchandise's actual price due to additional charges. Tax, shipping, etc. are other charges that may increase a product's or service's price.

A customer could see the product's actual price and dispute the final charge when the former is cheaper. Of course, not considering additional costs before payment would be an oversight on the customer’s end. Regardless, the issuer may issue a chargeback with this reason code when the cardholder disputes the cost as being a different amount.

Calculations or even typing errors can lead to chargebacks under this reason code. Hence, we recommend careful consideration of all transactions before processing them.

The reason code 12.5 takes over legacy code 80, which had a broader application. That makes fighting chargebacks because of incorrect amounts easier. For one, you don’t have to deal with a wrong account number under the same reason code.

We understand that extra charges may come in to increase a transaction's amount. However, such information should be communicated to the cardholder. Failure to do that will result in disputes and chargebacks.

Errors that can cause this chargeback are not limited to merchants. Cardholders can also err in their disputes. Nevertheless, we’ll help you get through the steps to fight and prevent it.

Why Did It Happen?

You’ll receive a chargeback under this code if a cardholder disputes a transaction amount as being overcharged. Any changes to the amount seen at checkout can lead to this chargeback. Hence, it is crucial to identify the merchant errors that can lead to it and avoid them.

The following are common causes of chargebacks under reason code 12.5:

• Incorrect amount entry: Entering the wrong amount for processing can lead to this chargeback. An example is entering $100 at a point-of-sale terminal for a purchase that costs $90. This error could be minute or too large to ignore.

Either way, the buyer will dispute the transaction, claiming they paid extra. That does not create a good impression for your business. Misreading a written statement is not an excuse or a reason to fight the chargeback.

• Transaction amount altering: Changing the amount after processing payment for an item will lead to disputes that cause chargebacks. Again, this is an error merchants must avoid when depositing their transactions with their acquirers.
• Upward review because of additional charges: Increasing the transaction amount because of other costs can cause chargebacks if the cardholder is unaware.

Friendly Fraud Cases

Merchant errors are the primary cause of chargebacks under reason code 12.5. Notwithstanding, you can get a chargeback if there is friendly fraud. A cardholder may not have paid attention to the additional charges during a purchase.

The need to quickly complete a transaction can cause cardholders to ignore the additional charges and dispute the total amount later. We expect them to contact you (the merchant) before disputing the payment with their issue. However, they can contact issuers directly and escalate the situation to a chargeback.

Besides friendly fraud, actual fraud can occur. A cyber shoplifter can make false claims of being overcharged and receive a chargeback. Hence, we must be attentive to the disputed transaction. 

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How to Fight Visa Chargeback Reason Code 12.5: Incorrect Amount

Examine the reason for the chargeback and use any of the suggestions below:

• The transaction amount is correct: Provide documents to show that you processed the right amount. You can use the transaction receipt to validate your claim.
• The cardholder was aware of the additional charges: Provide evidence that the cardholder approved the other changes and the transaction. This approach ties into the previously mentioned one of charging the correct amount.
• Refund already processed: If you’ve already processed a refund of the extra amount to the cardholder, submit proof of that. While we don’t expect chargebacks to occur after a credit has been processed to the customer, a few slip through. Ensure your proof contains the exact amount of the disputed extra charge and the transaction date.

The customer may accept the additional charges and withdraw the dispute. It could be that the buyer has realized the extra amount is legitimate and properly authorized. When that happens, obtain a document from the cardholder to show the withdrawal.

Letters and emails are the standard documents to submit when a cardholder withdraws a chargeback claim. Obtain and submit them to dispute the chargeback.

How to Prevent Visa Chargeback Reason Code 12.5: Incorrect Amount

Chargebacks can put merchants in uncomfortable positions and break the rhythm of operations. Hence, they should be kept at a distance.

We can’t completely eliminate the probability of a chargeback. As seen earlier, friendly fraud can cause chargebacks even when you’ve done nothing wrong. That should not stop you from doing your best to reduce the probability of chargebacks.

With that in mind, here are some recommended ways to prevent chargebacks under reason code 12.5:

• Stick to swiped or chip-read processing for your physical transactions. Entering card details manually should be a last resort and avoided as much as possible.
• Display the final amount with the additional charges before processing payment. The buyer should authorize adding those charges before the transaction is processed.
• If, for any reason, the amount needs to be changed, ensure you inform the cardholder. Request authorization before proceeding with any changes. Nevertheless, we’d prefer you avoid altering transaction amounts after processing.
• Train your staff to carefully enter price information before processing payments. If necessary, inform the cardholders at the checkout (for physical transactions) before swiping or chip-reading their cards.

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