The best way to win a battle is to prevent one from happening in the first place. Sure, you may be eager to put up a good fight whenever you receive a chargeback. But issuers, acquirers and card networks are finding it more cost effective to resolve disputes before it is filed. That’s what makes an inquiry so important in dispute management. And we’ve got three reasons that explain why that is.
But first, let’s recap on what is an inquiry and which reason codes are tied to this phase.
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What is an Inquiry? What is a Retrieval Request?
First of all, an inquiry, a retrieval request, and a ticket retrieval request are the same thing. The only difference between the three is that one card network says inquiry while another says retrieval request.
But no matter what they call it (and no matter how an issuer modifies it), here is the basic definition of an inquiry.
An inquiry is an action taken by an issuer in order to know if a cardholder’s claim has merit to be filed as a dispute. The merchant in question will be asked to provide information that can easily prove the transaction was valid, and that no further action is required.
Basically, the issuer attempts to verify if the cardholder’s claim can be potentially filed as a dispute. But that won’t happen if the merchant clearly shows a valid transaction took place.
While the issuer performs an inquiry, some issuers are mandated by a card network to perform this action. Failure to comply can result in drastic consequences. For example, a card network may ban an issuer from processing future funds.
Here is a how each card network treats an inquiry:
- American Express: a case-by-case basis, depending on the reason code
- Discover: a case-by-case basis, depending on the reason code
- MasterCard: not an official requirement, but issuers are able to perform inquiries where necessary
- Visa: a requirement for all issuers to perform
Visa requires its participating issuers to perform inquiries for any claim, thanks to the VCR initiative. This is an effort to prevent invalid disputes from initiating chargebacks. And the best way to do that (in their view) is to prevent disputes from even becoming disputes.
What Happens During an Inquiry?
An inquiry follows a similar path as the chargeback process, expect it’s much shorter (and cheaper) for everyone. But there’s one thing that remains the same: the issuer is the final decision maker in filing the dispute. Merchants still have significant influence in the decision making. It all comes down to how detailed their information is in discrediting the cardholder’s claim.
Which Reason Codes are Tied to Inquiries?
There are two card networks that created reason codes for inquiries. One of them is American Express while the other is Discover. Amex calls these codes ‘inquiries’ while Discover calls it ‘ticket retrieval requests.’ But again, these codes have the same purpose, no matter what a card network calls it.
However, each inquiry reason code asks for specific evidence in specific circumstances. We compiled a list of Amex’s inquiry reason codes and Discover’s ticket retrieval request reason codes. Feel free to click on each code to know what information you’ll need to provide to the issuer.
American Express: Inquiry Reason Codes
|Reason Code: 004
Meaning: The cardholder claims that he or she didn’t receive the goods or services.
|Reason Code: 021
Description: Goods/Services Canceled
Meaning: Either the cardholder claims the goods or services were canceled, or that the cardholder was unsuccessful in attempting to cancel said goods or services.
|Reason Code: 024
Description: Goods Damaged/Defective
Meaning: The cardholder claims that the order arrived either as damaged or defective.
|Reason Code: 059
Description: Repair/Replace Request
Meaning: The cardholder has requested a repair or replacement of an order that was damaged or defective.
|Reason Code: 062
Description: Credit Processed as Charge
Meaning: The cardholder claims that the charge should have been submitted as a credit.
|Reason Code: 063
Description: Quality Issues
Meaning: The cardholder has requested a replacement for a good or service that was not as described. Or the cardholder may want credit after being dissatisfied of the quality of said good or service.
|Reason Code: 127
Meaning: The cardholder does not recognize the charge.
|Reason Code: 154
Description: Goods/Services Refused
Meaning: The cardholder claims the goods or services were either canceled or refused.
|Reason Code: 155
Description: Credit Not Received
Meaning: The cardholder request credit for goods or services that was not received.
|Reason Code: 158
Description: Credit for Returned Merchandise
Meaning: The cardholder has request merchandise that was returned that he or she has returned.
|Reason Code: 173
Description: Duplicate Billing Credit
Meaning: The cardholder has requested credit for a duplicate processing.
|Reason Code: 175
Description: Credit Not Processed
Meaning: The cardholder expected the merchant to issue credit, but it has not been processed.
|Reason Code: 176
Description: Card-Not-Present (CNP) Unrecognized
Meaning: The cardholder does not the CNP charges.
|Reason Code: 193
Meaning: The cardholder claims the charge was fraudulent.
|Reason Code: 680
Description: Amount Discrepancy
Meaning: The cardholder claims the charge amount the merchant had submitted differs from what the cardholder agreed to pay.
|Reason Code: 684
Description: Paid by Other Means
Meaning: The cardholder claims the charge was paid for by another form of payment.
|Reason Code: 691
Description: Request for Support Itemization
Meaning: The cardholder is not disputing the charge(s), but he or she is requesting documentation of said charge(s).
Discover Ticket Retrieval Requests Reason Codes
|Reason Code: 01
Description: Transaction Documentation Request
Meaning: The cardholder or issuer requests a copy of documentation for a card transaction.
|Reason Code: 03
Description: Transaction Documentation Request Due to Cardholder Dispute
Meaning: The cardholder or issuer requests transaction documentation for a card transaction.
|Reason Code: 04
Description: Transaction Documentation Request for Fraud Analysis
Meaning: The issuer’s security personnel requests transaction documentation in connection with a fraud investigation of a card transaction (other than ATM Transactions). This may occur whenever neither the cardholder nor any authorized user participated in or benefited from the transaction. This ticket retrieval request can also occur if the cardholder disputes the transaction as fraud.
|Reason Code: 05
Description: Good Faith Investigation
Meaning: The merchant accepted responsibility in response to a Good Faith Investigation Ticket Retrieval Request.
3 Reasons Why an Inquiry is Good for Dispute Management
And here we are. The list that explains why inquiries and retrieval requests are a good thing.
1. Inquiries Prevent Disputes from Being Filed
How can a dispute exist if it isn’t filed in the first place? Card networks will still track the numbers of inquiries a merchant receives. But they won’t count it as a dispute if the merchant can discredit the cardholder’s claim. Keep in mind that card networks may take action on merchants who have been receiving too many inquiries. The exact threshold for this action is unknown, but that will most likely depend on what kind of inquiries the merchant is receiving.
2. Less Time (and Money) is Drained from Chargebacks
Merchants, issuers, acquirers and card networks will save on resources whenever a dispute is not filed. In a way, everyone benefits from this reason. Merchants can repurpose their time for something non-chargeback-related while issuers and acquirers maintain good indices with card networks.
Furthermore, inquiries do not just save you time from chargebacks. It also saves you from the incurred fees that are involved in the chargeback process. You can’t have too many barriers if it helps protect one’s revenue.
3. Merchants Can Prove Their Innocence on the Spot
Inquiries allow merchants to show that they did nothing wrong before, during and after the transaction. Issuers will be able to reject a cardholder’s claim easily when it clearly shows (at least) one of three things:
- The supporting evidence shows that the cardholder gave consent during the transaction.
- The evidence provided shows that the merchant properly processed a transaction.
- The evidence shows that the merchant already made attempts and/or resolved the dispute before the cardholder submitted a claim.
It may feel like a burden to fulfill an inquiry, but that’s nothing compared to disputes that potentially become chargebacks.
3 Things You can do to Fulfill Inquiries
Now that you know why inquiries are good for dispute management, let’s see how you can successfully fulfill them.
1. Invest in Automated Dispute Management
This essentially brings together the three reasons above in a practical way. For example, the Chargeback App automatically renders a response whenever Visa Resolve Online (VROL) generates a Real-time Resolution Inquiry. The response will contain details about the customer, the order, the product and other related matters. And it will be provided to the analyst that is reviewing the cardholder’s claim.
How does automated dispute management help merchants? For starters:
It Helps Lower Your Dispute Ratio
It’s hard for disputes to become a problem if it’s not present in the first place. Its absence not only lowers the amount of disputes you’ll manage. It also lowers the number of chargebacks that affect your chargeback ratio. That puts you in good standing with everyone, especially among issuers and acquirers.
It Improves Your Win Rate
All hope isn’t lost if a dispute enters the chargeback process. There is a chance to reclaim your innocence, and that is possible when a software does all the heavy lifting for you. The Chargeback App automatically generates responses based on the related reason code and the card network’s guidelines. That gives you more time to gather compelling evidence that favors your case.
Furthermore, you will be free to modify the generated documents until you feel that it clearly shows why the dispute is invalid and how you processed the transaction responsibly.
It Helps You Save and Repurpose Time
The Chargeback App helps merchants save and repurpose time from dispute management. Whether it’s an inquiry or a chargeback response, the Chargeback App reduces the time it takes to respond accordingly. That gives you more time for what matters most: your business and your goals.
2. Organize Your Data Sources
Like dispute reason codes, inquiries ask for data from different sources. This helps dispute analysts gain the full picture on ‘who’s right,’ ‘who’s wrong’ or ‘let’s settle this down the road.’ You’ll need to keep everything organized for potential inquiries. That includes data from sources like ecommerce platforms, payment gateways and payment processors. The safest way to organize this data is through Integrations. That will help prevent the burden (and nightmare) of copying and pasting data.
3. Gain a Taste of Real-time Resolution
There is much that can be explained about automated dispute management. But nothing compares to being able to experience it and its benefits. Our team will explain how the Chargeback App bridges the gap between chargeback expertise and customer-product knowledge for merchants large and small, high risk or not. Feel free to contact us and view our tailored price for automated dispute management. And before you make any formal commitments, you can request a demo in order to gain an experience in Real-time Resolution.