Visa Chargeback Reason Code 41, “Cancelled Recurring Transaction,” is used when a cardholder disputes a transaction because they believe it was processed after they had canceled a recurring payment agreement. This can happen for various reasons, including miscommunication between the merchant and the customer or an administrative oversight.
Key Details of Chargeback Reason Code 41: Cancelled Recurring Transaction
- Definition: The cardholder claims they canceled a recurring transaction, but the merchant continued to bill them.
- Common Causes:
- The cardholder canceled the recurring payment agreement, but the cancellation was not processed or recorded by the merchant.
- The cardholder claims they canceled the recurring payment agreement, but the merchant has no record of such a cancellation.
- There was a misunderstanding between the cardholder and the merchant regarding the cancellation process or timing.
Resolution Time Frame
- For Cardholders: Cardholders generally have 120 calendar days from the transaction processing date to file a dispute.
- For Merchants: Upon receiving a chargeback, merchants typically have up to 30 days to respond with evidence to refute the chargeback.
Preventing or Mitigating Chargeback Reason Code 41
To avoid or mitigate the risk of chargebacks due to canceled recurring transactions, merchants can adopt the following practices:
- Clear Cancellation Process: Ensure that customers have a clear and straightforward method to cancel recurring payments, and communicate this process effectively.
- Prompt Cancellation Processing: Process cancellation requests immediately and confirm the cancellation with the customer.
- Maintain Records: Keep detailed records of all cancellation requests and confirmations. This includes emails, letters, or any other form of communication used to cancel the service.
- Notification: Send a confirmation notice to the customer when a cancellation request is received and when it has been processed.
- Customer Service Training: Train customer service representatives to handle cancellation requests efficiently and to inform customers about the cancellation process.
- Review and Update Billing Systems: Regularly review and update billing systems to ensure they can handle cancellations promptly and accurately.
- Communication: Communicate clearly with customers about the terms and conditions of the recurring payments, including how and when they can cancel.
