12.2 – Incorrect Transaction Code

DESCRIPTION

Why did I receive a Visa 12.2 chargeback?

You received this chargeback because you processed the wrong type of transaction. Either you processed a sale as a refund or a refund as a sale. Or, you should have reversed or adjusted the original transaction, but you issued a refund instead — which means the cardholder didn’t receive the correct amount.

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CLASSIFICATION

How does Visa classify this type of dispute?

Visa reason codes are divided into four categories: fraud, authorisation errors, processing errors, and consumer disputes.

Reason codes that start with 12 are processing errors.

ISSUER TIME LIMIT

How long can the issuer wait to file a chargeback with a 12.2 reason code?

The maximum amount of time that can pass between the transaction processing date and the dispute processing date is 120 calendar days.

If you issued a refund instead of a reversal or adjustment, the chargeback must be filed within 120 days of the refund processing date.

VALIDITY

What would make a 12.2 chargeback invalid?

An issuer is not allowed to use reason code 12.2 if the transaction was a mobile push payment.

SUPPORTING DOCUMENTS

Can I fight a chargeback with reason code 12.2?

Yes. You can fight a chargeback with this reason code if you have the required supporting documents.

If you processed a sale as a refund or a refund as a sale, you’ll need at least one of the following:

• Evidence that you credited the cardholder’s account or issued a reversal before the chargeback was filed.
• A transaction receipt or other record that proves the transaction code was correct.

If you processed a refund instead of a reversal or adjustment, you’ll need at least one of the following:

• Evidence that you issued a reversal before the chargeback was filed.
• A detailed explanation of why you issued a refund instead of a reversal or adjustment.

WORKFLOW

What Visa workflow do I use to respond to a chargeback with reason code 12.2?

Visa reason code 12.2 is managed with the collaboration workflow.

You should submit a dispute response with a rebuttal letter (check our rebuttal letter guide) and any of the supporting documents listed above.

ACQUIRER TIME LIMIT

How quickly do I need to file a chargeback response?

Your acquirer must submit your chargeback response within 30 calendar days of the chargeback filing date.

NOTE: This is the acquirer time limit. The amount of time you, the merchant, have to prepare and submit your response will be much less. Usually, merchant time limits are about 3-20 days. Make sure you know how much time your acquirer allows.

ADVANCING THE CASE

Can the issuer file pre-arbitration after a 12.2 dispute response?

Yes. An issuer can file pre-arbitration for any collaboration dispute — including disputes with reason code 12.2.

Pre-arbitration allows the issuer to address information or evidence provided in your dispute response.

After receiving a collaboration dispute response, the issuer can make a pre-arbitration attempt for any of the following reasons.

• The issuer can provide new documents or information about the original dispute.
• The issuer changes the reason code because of information or documents provided in the dispute response. (The issuer can only change the reason code if the original chargeback was valid.)
• If your dispute response included a claim that the cardholder no longer wants to dispute the transaction, the issuer must prove that the cardholder does, in fact, want to continue the dispute.
• If you provided the required supporting documents and disputed the cardholder’s claim, the issuer must review the evidence with the cardholder and provide an explanation of why the cardholder continues to dispute the transaction.
• If you refunded the cardholder after the chargeback was filed, but the issuer suffered a financial loss because of the exchange rate, the issuer can advance the case to pre-arbitration.

PREVENT

How can I avoid chargebacks like this in the future?

Here are some chargeback prevention tips for reason code 12.2.

• Reach out to your acquirer or processor to make sure your merchant account is set up properly.
• Hold regular staff training sessions to ensure everyone on your team knows how to correctly process transactions, refunds, and adjustments.

If you’d like to learn more about preventing chargebacks, visit our blog article.