10.4

Visa reason code 10.4 explained for merchants

Code 10.4 covers fraud claims on online, phone and mail orders. Learn what it means and how to fight it with the right proof.

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A chargeback notice with Visa reason code 10.4 means the cardholder says a fraudster used their card. The sale was online, by phone, or by mail. No card was swiped or tapped. Here is what the code means and how to answer it.

What is Visa reason code 10.4?

Visa sorts disputes into four categories: 10 Fraud, 11 Authorization, 12 Processing Errors and 13 Consumer Disputes. Code 10.4 sits in the fraud group. Its full name is Other Fraud: Card-Absent Environment.

Under 10.4, the cardholder says they did not make or allow an online, mail order or phone order purchase. A Visa dispute is how a card issuer sends a contested transaction back. If the dispute is valid, the acquirer takes the disputed amount from the merchant account and tells the merchant.

Code 10.4 is close cousin to code 10.3, which covers fraud claims where the card was present. Read about Visa reason code 10.3 to see the difference.

Common scenarios that trigger a 10.4 dispute

A 10.4 dispute usually starts in one of a few ways.

  • A thief steals card details and buys from your online store.
  • The cardholder forgot an order and assumes it was fraud.
  • A family member used the card without the cardholder knowing.

The claim is always the same. The cardholder says the purchase was not theirs and never approved by them.

How to respond to a 10.4 chargeback

A merchant can accept a Visa dispute, or reject it by sending supporting documents to its card processor. To fight a 10.4 dispute, show the dispute is invalid or the cardholder no longer disputes it.

Your proof must answer the fraud claim directly. Visa dispute evidence must be easy to read and in English, or come with an English translation.

Good proof for a 10.4 reply includes:

  • Order records that match the cardholder, such as past orders from the same card or email.
  • Delivery records showing the goods went to the cardholder's address.
  • Server logs tying the order to a device or account the cardholder used before.
  • Emails or messages from the cardholder about the order.

Proof that shows nothing about the cardholder will not help. A tracking number alone does not prove who placed the order.

Using Compelling Evidence 3.0 for 10.4

Compelling Evidence is proof from the merchant that the cardholder took part in, received, or benefited from the transaction. Visa lets merchants send Compelling Evidence for conditions 10.1, 10.3 and 10.4.

Visa's remedy rule for condition 10.4 is commonly known as Compelling Evidence 3.0. The idea is simple. You show the same cardholder had a history with you before the disputed sale. Past orders, matching devices, matching IP addresses, and matching account details all count. Two or more past undisputed sales that match the disputed one can prove the cardholder is the same person.

If you cannot build that history, do not force it. A weak match can hurt more than help. Fall back on delivery proof and account records instead.

The role of Visa Secure authentication

For a card absent fraud dispute, tell your card processor if the sale was authenticated with Visa Secure. Visa Secure is the tool that checks the cardholder during checkout, often with a one time passcode or bank app approval.

A sale that passed Visa Secure is strong proof the real cardholder was present at checkout. It can make the dispute invalid before you gather anything else. If your checkout does not use Visa Secure, ask your processor about adding it. It cuts fraud claims on future orders.

Time limits and procedural rules

Each step of a Visa dispute has a set time limit, so a late answer can lose the case. Watch the deadline on your notice and send your reply early.

Two more rules matter. An acquirer may respond only once to the original Visa dispute. And the acquirer may send a Dispute Response unless the merchant already accepted the dispute through Rapid Dispute Resolution.

Your reply may not end things. In pre-Arbitration, the issuer must deal with the evidence the acquirer gave in its Dispute Response. The issuer may switch dispute conditions only if the first condition was valid. See what happens after you answer a chargeback for the rounds that can follow.

Fraud codes get the most attention, but other claims show up too. Cardholders who say an item never arrived use different codes, like Amex reason code C08. Claims that an item was wrong or broken use codes like C31 and C32. Processing errors, such as an incorrect charge amount, have their own codes as well.

If a notice confuses you, start with how to read a chargeback notice. Find the code first, then build your reply around it.

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