10.3 – Other Fraud – Card-Present Environment

DESCRIPTION

Why did I receive a chargeback with reason code 10.3?

You received this chargeback because the cardholder denies authorising or participating in a card-present, key-entered transaction.

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CLASSIFICATION

How does the issuer classify this type of dispute?

Visa groups its reason codes into four different categories: fraud, authorisation errors, processing errors, and consumer disputes. Reason codes that start with 10 are classified as fraud.

Fraud-related chargebacks have additional classification requirements.

Prior to filing a chargeback with this reason code, the issuer must submit a fraud report to Visa (called a TC40). Check our other resources to learn how TC40 data is used in your VAMP ratio.

ISSUER TIME LIMIT

How long can the issuer wait to file a chargeback with reason code 10.3?

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

VALIDITY

What would make a 10.3 chargeback invalid?

An issuer is not allowed to use reason code 10.3 if the chargeback has any of the following characteristics:

• The transaction as an electronic imprint (which proves the transaction wasn’t key-entered).
• The transaction was processed at an automated fuel dispenser (AFD) with a chip-reading device (only applicable in the USA).
• The transaction was an ATM cash disbursement.
• The transaction was an emergency cash disbursement.
• The transaction was a mobile push payment.
• The transaction was a mobility and transport payment.
• The issuer had previously reported fraud activity for the card and the transaction shouldn’t have been approved.
• The issuer had previously reported your business as fraudulent.
• The transaction was with a Visa Commercial Choice Omni Product.
• The transaction was a delayed charge that relates to a prior stay, trip or rental period, was properly identified as such, and an electronic imprint was obtained during the same stay, trip, or rental.

SUPPORTING DOCUMENTS

Can I fight a chargeback with reason code 10.3?

Yes. You can fight a chargeback with this reason code as long as you have at least one of these things:

• Evidence that the chargeback is invalid. (Note: Your acquirer’s technology should catch these errors and automatically respond on your behalf. If your acquirer doesn’t automatically respond and you receive a chargeback notice, you can challenge the chargeback yourself.)
• Evidence that you credited the cardholder’s account before the chargeback was filed.
• Evidence that proves the cardholder no longer wishes to dispute the transaction.
• Evidence that a stay, trip, or rental was disputed improperly. You must show that the transaction relates to a prior stay, trip, or rental period and an electronic imprint was obtained as part of the same stay, trip, or rental.
• Evidence of a valid imprint (which does not include a pencil rubbing or photocopy of the card).
• Evidence that Visa defines as compelling. The next section has a complete list of acceptable compelling evidence options. This is only applicable in the USA.

PROOF

What compelling evidence is needed for reason code 10.3?

For a US domestic card-present transaction that is key-entered and did not take place at a chip-reading device, you must provide one of the following:

• Evidence that the same card used in the disputed transaction was used in a previous or subsequent transaction and was not disputed
• A copy of the cardholder’s identification and a receipt, invoice, or contract that contains the information provided on the cardholder’s identification document.

WORKFLOW

What process do I use to respond to a chargeback with reason code 10.3?

Visa reason code 10.3 is managed with the allocation workflow.

For this reason code, a chargeback response is technically considered pre-arbitration. If you want to challenge a chargeback, gather your supporting documents or compelling evidence and submit your package with a rebuttal letter.

ACQUIRER TIME LIMIT

How soon 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 timeline for you, the merchant, is much shorter. Usually, merchants have just 3-20 days to prepare and submit a dispute response. Make sure you understand your acquirer’s expectations.

PREVENT

How can I reduce the risk of 10.3 disputes?

Here are steps you can take to avoid reason code 10.3 in the future.

• Use fallback options — like manually entering transaction details — as a last resort. Opt instead for processing with EMV-compliant terminals. If an authorisation request is declined, ask the cardholder for a different payment method.
• If you do process a key-entered transaction, make sure you have an imprint.
• Differentiate between card-absent and card-not-present transactions by noting the transaction was a phone, internet, or mail order.
• Train employees with best practices for card-present transactions.
• Request a different payment method if the authorisation request is declined.

For a complete list of chargeback prevention tips, visit our detailed guide.