Visa Chargeback Reason Code 11.3: No Authorization

Visa chargeback reason code 11.3: No Authorization, is used when a transaction is processed without the cardholder’s authorization or if the authorization request was declined by the issuer but the transaction was still completed. Here’s a detailed breakdown:

Causes of Chargeback Code 11.3

1. Lack of Authorization: The transaction was completed without an authorization from the card issuer.
2. Expired Authorization: The authorization was obtained but not used within the time frame specified by Visa (typically 7-10 days).
3. Misuse of Declined Authorization: The authorization was declined, yet the merchant processed the transaction anyway.
4. Fraudulent Transactions: The cardholder disputes a transaction as unauthorized because it was made fraudulently.

Resolution Time Frame

• Consumers: Cardholders typically have up to 75 calendar days from the transaction processing date to dispute a charge under this reason code.
• Merchants: After receiving a chargeback notification, merchants generally have 20 days to respond with evidence to dispute the chargeback.

Preventive Measures

1. Obtain Proper Authorization: Always ensure that an authorization code is received for every transaction.
2. Monitor Expiration of Authorizations: Use the authorization within the valid time frame. If the transaction is delayed, request a new authorization.
3. Handle Declines Appropriately: Do not complete transactions if the authorization request is declined. Instead, ask for another form of payment.
4. Use AVS and CVV Checks: Implement Address Verification Service (AVS) and Card Verification Value (CVV) checks to verify the cardholder’s information.
5. Update Fraud Detection Tools: Utilize advanced fraud detection and prevention tools to identify and prevent potentially fraudulent transactions.
6. Train Staff: Ensure that your employees understand the importance of obtaining proper authorizations and the consequences of ignoring declined transactions.

Mitigation Steps

1. Keep Detailed Records: Maintain comprehensive transaction records, including authorizations and communications with customers.
2. Provide Clear Receipts: Ensure that transaction receipts clearly show the date, amount, and authorization code.
3. Respond Promptly to Chargebacks: Gather and submit all relevant documentation, such as proof of authorization and customer communications, within the allowed time frame.
4. Communicate with the Customer: If possible, resolve the issue directly with the customer before it escalates to a chargeback.