Although chargeback is a facility provided to a customer by issuing bank to raise a request for a refund, the customer/cardholder cannot raise/request a chargeback for every purchase. Every card network has its own set of rules that define minimum requirement to initiate a chargeback request. These requirements may include:
- The minimum amount required to initiate a chargeback
- Transaction type
- Chargeback reason code
- Chargeback Time limits
Let us understand it with the help of this table below:
|Transaction Type||Reason Code||Minimum Amount||Geographical Region|
|Travel & Entertainment||81,83,85||USD 25||All|
|Authorization data Invalid||72||–||All|
|Automated Fuel Dispenser||81||USD 10||All except European Visa|
There are a number of transaction types and chargeback reason codes for which minimum amount is not specified by Visa to initiate chargebacks. For such transactions types, a client has to contact issuing bank/financial institute to get information and conduct appropriate action. For others, there is a pre-defined minimum amount that is required to proceed with chargebacks. Few of the examples are stated above. As we have got a wide idea about reason codes and amount associated with them, let us now discuss a few of them in detail.
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Credit not processed – Reason code 85
Under reason code 85, the minimum transaction amount required to initiate chargeback should be at least $25.00. If using any other currency than this, it should be equivalent to the specified amount. But there are conditions under reason code 85 (Travel and entertainment transactions), where the minimum amount is not applicable. These conditions are:
- If the original credit transaction was refused by the recipient
- If the original card transaction is prohibited by laws & regulations
- If the cardholder successfully canceled an advance payment service transaction which a merchant, due to any reason, did not process. This is only applicable to the US domestic region.
Fraud (Card-present) – Reason code 81
The minimum amount applied to ‘Automated fuel dispenser transaction’ under Visa chargeback code 81 is $10.00 or any other currency equivalent to it. The conditions on which this minimum amount is applicable are:
- If the cardholder does not authorize or participate in a ‘Card-present’ environment. This condition is applicable in all the regions.
- If the fraudulent transaction took place in a ‘Card-present’ environment using a valid account number for which card was not issued or is outstanding. Even if no authorization was obtained, the minimum amount is applicable.
- If transaction qualifies for EMV liability shift and following:
- 1. If the transaction was completed in ‘Card-present’ environment.
- 2. No authorization or participation of card holder in the transaction.
- 3. If the card is a Pin-preferring chip card:
i. No chip-reading device used to carry out transaction
ii. Chip-reading device not PIN-compliant with EMV