I think everybody who’s related to US merchant processing business would be interested to hear this story.
We got a chargeback 2 weeks ago with the reason code 83 (no user authorization). Nothing would be wrong with it BUT this transaction has passed Verified by Visa with all required flags, AVS matched, CVV code matched, Geo IP matched, even the phone number left by this sob was listed with switchboard.com and matched all the info he left on the payment form. After short investigation it was found that our gateway burped and delayed settlement of this transaction for a little over allowed number of days after authorization, which is required by Visa to keep chargeback protection under VbV rules.
Even this was not considered a big deal and all documentation (VbV response, CVV, AVS, etc.) that proved this transaction was a legitimate has been faxed to acquiring bank to have this chargeback reversed. NOW hear the finale! Today I got the letter from my bank which said that chargeback can not be reversed because:
“1. This sale did not receive a positive response for the Verified by Visa
2. CVV was not verified
3. AVS response not applicable”
…and this is after I sent them everything that shows completely the opposite!
I feel humiliated and embarrassed. It’s not about the money, but processing history which I must have clean. IMHO this proves one more time that merchants are not protected from anything.
It sounds to me like the ultimate culprit on that transaction was the "burp" in your payment gateway. If it had not been for that, you would have been protected.
However, you are definitely correct in that the risk associated with credit card processing is definitely a cost of doing business online. Of course, on the plus side - credit card processing is also the single biggest money maker for most Internet merchants as well.
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I actually had this happen to me this weekend. I bought something from one plaace and they told me my charge was declined. I used another credit card and then noticed yesterday that the company charged the declined card. This can happen from time to time so nothing is 100% fool-proof anymore.
Especially over this type of weekend with millions of transactions being processed
Yea, we better accept only cash Electronic transactions is no good at all.
Yes, I agree. We are considering to also accept cash only from our customers. We'll mail them a self addressed stamped envelope and a blank piece of paper. Then, they just have to wrap the money in the paper, stuff the envelope, and drop it into the mail.
The added beneft is that now we won't have to pay taxes any more, since there is no more "proof" that we're actually making money.
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When you represented the transaction your bank denied the reversal because the data elements where jumbled by your gateway?
No, bank denied it because based on I have no idea what, they concluded that "This sale did not receive a positive response for the Verified by Visa", although the printout I sent them from my 3D secure gateway showed all necessary flags to confirm the opposite. They have no technical clue of the reason why it happened so I did not even bother to explain what the payment gateway is.
In addition, it was not a jump, but a sort of a slow down from our gateway, which caused the settlement of the transaction to be delayed for more than 7 days after authorization.
If you properly recieved the information and everything looks good then you shouldn't have to pay for that transaction and we may be able to take it up higher the ladder to get it resolved. I have a feeling you're working with a basic CSR. Please file this as a support request and we'll help you represent directly to Visa.