Visa Chargeback Reason Code 11.2: Declined Authorization

What is Visa Chargeback Reason Code 11.2?

The chargeback reason code 11.2 represents chargebacks on transactions where authorization was declined. It falls under the “authorization” category of chargeback dispute management. However, you can dispute it if you feel wrongfully charged.

Transaction authorizations provide a failsafe against most chargebacks. After all, rightfully authorized transactions are rarely put up for dispute. Even when cardholders dispute them, they have no standing to accuse you of anything.

Declined transactions often have two messages. The card issuer or POS machine can return a declined or a card pickup message. Declined messages can have several underlying reasons, from network failure to insufficient funds.

Card pickup messages are more direct in their meaning. Card issuers often use this description when declining authorizations for the following reasons:

• The cardholder reported the card stolen
• The cardholder reported the card as lost
• The card or transaction is marked as fraudulent

We are used to retrying cards at payment terminals after an initial decline message. Of course, we’ve learned from experience that dirty cards or wrong commands can cause authorization declines. However, retrying declined transactions multiple times opens you up for chargebacks under this reason code.

Card issuers and cardholders can initiate disputes that result in chargebacks under reason code 11.2. For cardholders, they can present debit transactions even when the payment was initially declined. On the other hand, card issuers may realize their errors in processing a previously declined transaction.

Chargebacks involving authorization can be tricky to deal with. The card issuers are often right, especially if you did not refund the customer promptly.

We’ll explain the possible scenarios that lead to chargebacks under reason code 11.2. Learning the preventive measures is best. That will save you the back and forth of trying to resolve the dispute.

Why Did It Happen?

The chargeback reason code 11.2 occurs on processed transactions that were previously (initially) declined. To the cardholder or card issuer, the declined transaction went through, debiting the cardholder. Card issuers can pick it up and initiate the chargeback, or the cardholder may realize the wrongful charge and file a dispute.

Errors that lead to chargebacks under this reason code are not entirely on you. Hence, we’ve identified the following reasons for their occurrence, as follows:

• Submitting a declined transaction: Clerical errors can cause you to submit a declined transaction with other successful ones in your capture file. That happens when you submit transactions in batches for the card issuer's approval. Also, an oversight from the card issuer can process that transaction, causing the cardholder to be debited.

Card issues refer to this error as “forced posting.”

• Forcing a declined transaction: Card issuers allow voice authorizations in rare cases. Due to persuasion from the cardholder or the peculiarity of the transaction, you may contact the voice authorization center for forced authorization. That leaves the door open for subsequent chargebacks, especially where a card pickup message was previously displayed.

Card issuers often offer voice activation codes to force specific transactions. However, using them leaves you open to disputes with the cardholder and the card issuer.

• Card issuer error: We can’t possibly guess the exact details of what could cause a card issuer to process an initially declined transaction. However, this error occurs outside of you. It can happen even when you stop sending authorization requests for payment.

Upon realizing this error, card issuers will attempt to rectify it by initiating a chargeback. That is why you must investigate thoroughly before disputing the claims.

Friendly fraud and cyber-shoplifting

Cardholders may persuade you to force a transaction and later dispute it with the initial declined response. Sometimes, they may forget to authorize the payment and dispute it. Both cases can result in chargebacks under this code.

Money lost to online payment fraud in the e-commerce industry amounted to over $40 billion in 2022. Cyber-shoplifting has contributed to those losses. It involves cases where cardholders intentionally dispute transactions even after receiving the merchandise.

Cyber-shoplifters want to get their cash back while keeping the purchased merchandise. With false evidence and probably your slow response to card issuer inquiries, chargebacks can occur.

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How to Fight Visa Chargeback Reason Code 11.2: Declined Authorization

Submitting and forcing a declined transaction are the most prominent reasons behind chargebacks under reason code 11.2. You cannot fight the chargeback if your investigations reveal any of the two as the cause. Instead, accept the chargeback and implement preventive measures.

That said, you can fight chargebacks under reason code 11.2 in the following ways:

• Provide proof of subsequent authorization: A subsequent trial may have received an authorization approval code. You can contact your card processor to obtain the necessary details. The transaction date may not matter, but the amount should be the same.

Follow the same process for multiple transactions. That applies to car rental, hospitality, and cruise line merchants that process multiple payments.

• Provide proof of previous settlement: Your prompt response may have caught the error and refunded the cardholder. Provide documentation of the credit transactions, including the date, time, and amount.
• Provide proof of withdrawn cardholder dispute: Cardholders can withdraw their disputes or agree to another settlement outside of a credit refund. Provide documentation showing the cardholder’s approval for an alternative settlement or complete withdrawal.

We encourage you to be prompt in your response. Visa will not leave the window for chargeback rebuttal open all year round. Even so, gather enough evidence before disputing the chargeback.

How to Prevent Visa Chargeback Reason Code 11.2: Declined Authorization

Card issuer errors can cause chargebacks under reason code 11.2. Hence, preventing these chargebacks is not entirely up to you. We encourage you to do your part and prepare yourself if the chargebacks occur.

Here are a few tips to help you prevent chargebacks under reason code 11.2:

• Review all transactions before submitting them to your capture file. That should eliminate forced posting.
• Avoid forcing declined transactions. Instead, request an alternative payment method (cash or another card).
• Note declined messages and promptly report any card pickup message.
• Maintain and upgrade your payment terminals when necessary.
• Respond promptly to cardholder complaints.

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