Visa · Chargeback reason codes
Visa 10.1 chargeback: EMV Liability Shift Counterfeit Fraud explained
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Visa reason code 10.1, EMV Liability Shift Counterfeit Fraud, means a counterfeit copy of a chip card was used in person and the merchant's terminal did not read the chip or did not send full chip data, so fraud liability shifted to the merchant. The bank has 120 days from the processing date to file. It cannot be used for chip-read or fallback transactions, so reading the chip is the main defence.
- Category
- Fraud (card present)
- Time limit for the bank to file
- 120 days from the transaction processing date
- Time limit to respond
- Your processor's deadline (on Stripe usually 7–21 days); under Visa rules the acquirer must answer within 30 days of the dispute processing date
- Typical evidence
- Proof the transaction was chip-read or a valid fallback; refund already issued
- Can it be prevented?
- Yes: read the chip on an EMV terminal every time
- Who usually wins
- The merchant if the chip was read; otherwise the cardholder
What PlatformDTC does
PlatformDTC's in-store point of sale sends every card payment to a Stripe Terminal card reader on the store's own Stripe account; the till has no way to type a card number in. Online checkout orders are card-absent, so this card-present code does not apply to them. Every reader payment is recorded on the order with its Stripe payment, which is what you need to show the chip was read.
What it means
The cardholder says they did not make the purchase, and the card used was a counterfeit copy of their chip card. Because your terminal did not read the chip (or did not pass full chip data), Visa's liability shift makes the fraud your cost rather than the issuer's.
The issuer must report the transaction as counterfeit fraud before filing. The code is not valid when the chip was read, for fallback transactions, or when the card verification value failed.
Why customers file it
Criminals copy the magnetic stripe of a chip card and use the copy at terminals that only swipe. The real cardholder sees a charge they never made.
Evidence that wins
Under Visa rules every response can also show that you already refunded and the bank ignored it, that the dispute is invalid, or that the cardholder withdrew it.
- Terminal record showing the transaction was chip-initiated, or a valid fallback
- Proof of a refund the issuer did not account for
- Proof the cardholder withdrew the dispute
- For hotel, rental or cruise delayed charges: proof the charge belongs to the stay and a chip-read imprint from the same stay
- US merchants: Compelling Evidence allowed under Visa rules
How to prevent it
- Use EMV chip terminals and always insert or tap the card
- Avoid falling back to swipe; train staff on what to do when a chip fails
- Send full chip data with the authorization
For developers
On Stripe the dispute object arrives with reason "fraudulent" and the card network's own code in payment_method_details.card.network_reason_code; listen for charge.dispute.created and read evidence_details.due_by for the deadline.
Visa routes Fraud (category 10) disputes straight to pre-arbitration: there is no separate Dispute Response stage for the merchant.
Frequently asked questions
- Can 10.1 happen on an online order?
- No. It requires a counterfeit card used in person at a terminal that did not read the chip. Online orders are card-absent fraud, which is Visa 10.4.
- What is the EMV liability shift?
- When a chip card is used at a terminal that cannot read chips, liability for counterfeit fraud moves to the party with the weaker technology, usually the merchant.
Sources
Related
- 10.2 — A lost or stolen PIN chip card was used in person without the PIN being checked.
- 10.3 — The cardholder denies an in-person purchase where the card number was typed in, not read.
- 10.4 — The cardholder says they did not make an online, phone or mail order purchase.
- 10.5 — Visa flagged the transaction under one of its fraud monitoring programs.
- 11.2 — The sale was completed even though the authorization was declined.
- 11.3 — No valid authorization was obtained, or the transaction was presented late.