Visa Purchase Return Authorization Mandate
Visa is introducing an authorization for purchase return transactions. The purchase return authorization message is intended to improve the customer return process by enabling cardholders to view a credit/return on their banking statements in real-time, and some cardholders can have these transactions included in other types of issuer services, like text alerts.
Enabling an authorized purchase return that is pending settlement to appear on an online statement (like a purchase) will improve the cardholder experience and reduce merchant service inquiries about the return. Additionally, authorizing a purchase return enables the issuer to validate the cardholder account, decline potentially fraudulent cards, and minimize chargebacks if the account does not exist or is closed.
All Merchants Will Be Affected
On April 13, 2019, all merchants must send credit authorization messages. After April 14, 2019, issuers will be entitled to initiate chargebacks on purchase return transactions when the merchant fails to obtain an authorization using Reason Code 71 - Declined Authorization and Reason Code 72 - No Authorization. The issuer holds liability for an authorized Visa purchase return submitted for settlement, while the merchant holds liability for an unauthorized Visa purchase return submitted for settlement.
Merchants should be prepared to handle a decline on a return. Partners should prepare in a multitude of ways, depending on the services they provide for their merchants.
If you’re a Partner offering merchant services through a third party service, you will need to ensure that the software supports purchase returns.
If you’re a Partner using our BaseLink™ to provide processing support through the BaseX™ gateway, there will be no changes to the Merchant Applications to perform a refund. That being said, Merchant Applications must be prepared correctly in order to interpret approval and decline response codes. When activated, the BaseX™ host capture service will immediately enable Visa purchase returns.
Integrators will need to update their integrations to pull the response code, authorization date, and authorization code from refund responses to store in their records.
Integrators will also need to update their integration to handle Declines on Refunds as they would for Sales/Authorizations.
If you’re a Partner using POS Applications (Class A), you will need to ensure that all affected Class A applications which support purchase returns will be switched to enable by default, as part of the February 2019 scheduled releases. An application download is required to enable online Visa purchase return authorization processing at a terminal. Once available, purchase return authorization processing can be enabled on demand by whose merchants are operationally ready for online purchase returns.