If you weren’t already aware, online authorization is always required for credit card purchase returns prior to settlement. This is a compliance requirement from all the major card brand networks.
We recently learned that Visa is stepping up its cost for credit card purchase return authorization noncompliance. Starting as early as July, refund submissions for credit card purchase transactions with no matching online authorization could be subject to additional expenses and fees.
Over the past three years, the major card brand networks have actively worked to inform customers of this mandate, which enables the cardholder to see their pending credit or refund as they would see a pending charge for a purchase.
To protect your bottom line and support your customers, we strongly recommend that credit card refunds be submitted online for authorization 100 percent of the time.
Why would an issuer decline a credit card purchase return authorization request?
The most common reason an issuer would decline a purchase return authorization request is because the credit card is no longer available or valid. For example, the original card may have been replaced due to expiration or being reported lost or stolen, or it was a Visa Prepaid card that has since been discarded.
When the authorization request for the return transaction is declined by the issuer, the merchant can process the return refund onto a different Visa account held by the same cardholder or mutually agreed upon alternate account.
Feel free to contact your Customer Account Manager if you have questions about return authorizations. Here’s more information about Visa’s mandate.*
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