This article explains key terms related to fraud notifications, disputes, and chargebacks in BLAZEPAY. It outlines steps merchants can take to respond to potential fraud, defend disputes, prevent chargebacks, and best practices.
Definitions
A Notification of Fraud (NOF) is an alert sent by BLAZEPAY to inform you that a transaction has been flagged as potentially fraudulent. This is not yet a chargeback, and no funds have been withdrawn from your account. It serves as a precautionary notice so you can review the transaction and take appropriate action.
A dispute occurs when a cardholder questions the validity of a transaction. The cardholder contacts their bank or credit card issuer, claiming an issue such as not receiving goods or unauthorized transactions. This initiates an investigation that may lead to a chargeback if the dispute is found valid.
A chargeback is a reversal of funds after a dispute has been settled in favor of the cardholder. The funds from the original transaction are withdrawn from the merchant’s account and returned to the cardholder. Merchants can challenge a chargeback by providing evidence that supports the validity of the transaction, though chargebacks often result in fees and penalties for the merchant.
Notification of Fraud
If you have a potential fraudulent charge, we will send you a notification report to alert you. It's important to note, that these are not disputes but can become chargebacks if no action is taken.
When you receive a notification of fraud on your BLAZEPAY admin portal, we recommend taking the following actions:
- Review the notification and issue refunds if necessary
- Block the shopper
- Stop the shipment of goods if possible
Disputes
Disputes occur when a cardholder questions the validity of a transaction. They will then contact their bank or credit card issuer and claim an issue with the transaction. This could be related to them not receiving the goods, not receiving the correct goods, or unauthorized transactions on their accounts. An investigation is then started into the transaction.
This is the stage where you can defend the dispute:
-
- Log into the BLAZEPAY Merchant Portal
- Transactions > Disputes > click on chargeback > bottom right of slide out
- Select Defend Dispute and upload the appropriate documentation
Common Dispute Reasons and Defence Steps
Use the list of common disputes and defence steps below to help you defend against disputes and review best practices to avoid them in the future.
Reason: Non-Receipt of Goods or Services
Reason Code: 4555
Description: The cardholder claims that they did not receive the goods or services they purchased at your business.
Defendable: Yes
Timeframe for Defence: 30 days from receiving the Notice of Chargeback
Defence Requirements: Description of the goods. Signed proof of delivery and an AVS (Address Verification Service) match. Communication where the cardholder confirms possession of the goods. Explanation of why the shipment was delayed (if applicable). Proof that the cardholder did not try to contact you to resolve the problem, such as a screenshot of an empty email or phone queue with their details filled out.
Best Practices on How to Avoid: Check Customer ID / If repeat issue, ban the customer
Reason: Incorrect Transaction Amount Presented - Charge Amount Exceeds Authorization Amount
Reason Code: 4521
Description: The charges submitted were either incorrect or exceeded the authorized amount.
Defendable: Yes
Timeframe for Defence: 14 days from receiving the Notice of Chargeback
Defence Requirements: Proof that a valid authorization approval took place for the full amount of the transaction.
Best Practices on How to Avoid: Validate the price of goods sold at the time / Keep receipt proof
Reason: No Valid Authorization
Reason Code: A02
Description: The payment could not be authorized.
Defendable: Yes
Timeframe for Defence: 14 days from receiving the Notice of Chargeback
Defence Requirements: Proof that confirms the card number. Proof that an authorization approval was obtained for this card number.
Best Practices on How to Avoid: Check Customer ID / If repeat issue, ban the customer
Reason: Non-matching Card Number
Reason Code: 4507/P22
Description: The card number used for the transaction is not assigned to a valid account nor to the cardholder.
Defendable: Yes
Timeframe for Defence: 14 days from receiving the Notice of Chargeback
Defence Requirements: Proof that confirms the card number.
Proof that an authorization approval was obtained for this card number.
Copy of the record of the terminal that electronically read the card number.
Proof of refund (if applicable).
Best Practices on How to Avoid: Check Customer ID / If repeat issue, ban the customer
Reason: Expired/Not Yet valid card
Reason Code: 4758
Description: The transaction completed with an expired card.
Defendable: No
Best Practices on How to Avoid: Check the card expiration date
Reason: Goods and Services not Received/Refused
Reason Code: 4513
Description: The cardholder claims that the goods or services they purchased at your business were not received or refused.
Defendable: Yes
Timeframe for Defence: 14 days from receiving the Notice of Chargeback
Defence Requirements: Proof that the cardholder received your cancellation or return policy and agreed to those at the time of the purchase, and did not cancel according to the disclosed policy. Attach the relevant policies as a screenshot or text (no links to websites).
Proof that notice of upcoming billing was sent to the cardholder 10 days before transaction.
Proof that the cardholder did not try to contact you to resolve the problem or cancel, such as a screenshot of an empty email or phone queue with their details filled out.
Best Practices on How to Avoid: If repeat issue, ban the customer / Keep proof that the cardholder did not return the merchandise.
Reason: Goods Returned/Canceled
Reason Code: 4513
Description: The cardholder claims that the goods/services they ordered were canceled.
Defendable: Yes
Timeframe for Defence: 14 days from receiving the Notice of Chargeback
Defence Requirements: Proof that the cardholder received your cancellation or return policy and agreed to those at the time of the purchase, and did not cancel according to the disclosed policy. Attach the relevant policies as a screenshot or text (no links to websites).
Best Practices on How to Avoid: Maintain order confirmation emails or receipts / Proof of delivery/returns/transactions.
Reason: The goods or services were not received
Reason Code: CD12
Description: The cardholder did not receive the goods or services paid for.
Defendable: Yes
Defence Requirements: Description of the goods. Proof of delivery and an AVS match. Communication where the cardholder confirms possession of the goods. Explanation why shipment was delayed (if applicable). Proof that the cardholder did not try to contact you to resolve the problem, such as a screenshot of an empty email or phone queue with their details filled out.
Best Practices on How to Avoid: Maintain order confirmation emails or receipts / Proof of delivery/returns/transactions.
Reason: Counterfeit merchandise
Reason Code: 4853
Description: The merchandise was identified as counterfeit by the customer or a third party, for example, a customs agency. The goods were not produced by the authorized manufacturer and infringe on intellectual property rights.
Defendable: Yes
Timeframe for Defence: 40 days from receiving the Notice of Chargeback
Defence Requirements: Proof that the cardholder did not try to contact you to resolve the problem or returned the merchandise, such as a screenshot of an empty email or phone queue with their details filled out. Proof that the merchandise was as described or was not damaged or defective, such as photographs. Proof of delivery if the merchandise was replaced/repaired. Email communication with the cardholder or agreements that were made.
Best Practices on How to Avoid: Provide information on how to identify authentic products vs counterfeit items / Maintain purchase records from vendors.
Reason: Visa Fraud Monitoring Program
Reason Code: 10.5
Description: Visa notified the cardholder's bank that the Visa Fraud Monitoring Program (VFMP) identified the transaction and the cardholder's bank has not successfully disputed the transaction under another dispute condition.
Defendable: No
Best Practices on How to Avoid: Monitor transactions / Verify ID with the card payment / If repeat issue, ban the customer.
Reason: Duplicate Processing
Reason Code: 12.6.1
Description: The cardholder claims that a single transaction was processed more than once, or they paid for the merchandise or service by other means such as cash, check, other card, and other options.
Defendable: Yes
Timeframe for Defence: 18 days from receiving the Notice of Chargeback
Defence Requirements: Copy of an invoice for two separate orders or proof that each transaction was processed separately.
If only one transaction has taken place, provide the following:
- Documentation for this single transaction.
- Proof that no other transaction was processed.
- Proof that a refund has been provided (if applicable).
- Proof that no other form of payment was used.
- Proof that a refund has been provided (if applicable).
- Communication with the cardholder after the payment stating any agreements that have been made.
Best Practices on How to Avoid: Perform transaction reconciliations / Provide the customer with a clear physical receipt / If repeat issue, ban the customer
Reason: Counterfeit Card
Reason Code: 4562
Description: The cardholder claims that they did not authorize or participate in a transaction that you processed.
Defendable: Yes
Timeframe for Defence: 30 days from receiving the Notice of Chargeback
Defence Requirements: Copy of a (signed) transaction receipt. CCTV footage that the customer did participate in the transaction. AVS check on the address provided by the consumer/cardholder. Proof that the cardholder did participate in the charge. This can be done by adding billing authorization, proof of delivery to the cardholder's billing address, contracts, usage details, or other options. An IP address that can be connected to the billing address provided by the cardholder. Any type of verifications such as email, mobile, and other options.
Best Practices on How to Avoid: Keep detailed records of the sale: customer comms/ signatures/ sales receipts / If repeat issue, ban the customer
Reason: No Cardholder Authorization
Reason Code: 4837
Description: The cardholder states that they, nor anyone authorized by them, engaged in the transaction.
Defendable: Yes
Timeframe for Defence: 40 days from receiving the Notice of Chargeback
Defence Requirements: An AVS check on the address provided by the consumer/cardholder. If applicable, include in the defense if a CVV/CVC check was performed and passed. Proof that the cardholder has participated in the charge. This can be done by adding billing authorization, proof of delivery to the cardholder's billing address, contracts, usage details, or other options. An IP address that can be connected to the billing address provided by the cardholder. Any type of verifications such as email, mobile, or other options.
Best Practices on How to Avoid:
- ID checks. Request a photo ID to verify the identity of the cardholder before completing the purchase.
- Prompt the customer to insert their card's chip rather than using tap-to-pay or the magnetic strip. Chip transactions tend to be more secure.
- Receipt confirmation. You can ask the customer to review and confirm the transaction details before completing the sale.
- Customer communication. When customers use their card for their order, please let them know that they can contact the store directly if they have any questions or concerns after completing. That way your team can help resolve any issues directly with the member.