Code 01: Refer to Issuer

Decline Code 01: What 'Refer to Issuer' Means & What to Do

Decline code 01 means the cardholder's bank wants to speak with the cardholder before approving this transaction. Unlike most decline codes, it is not a final rejection. It is a request for additional verification, and the transaction can still go through.

What Does Decline Code 01 Mean?

Most decline codes are decisions. Code 01 is a question. The bank has seen something about this transaction that it wants to verify before approving, and rather than declining outright, it's asking the cardholder to call in and confirm.

That something could be a transaction larger than the cardholder's typical spending, an unusual location, a merchant category the cardholder hasn't used before, or a recent security alert on the account. The bank isn't saying no. It's saying not yet.

This makes code 01 one of the few decline codes where the situation can be fully resolved at the point of sale, in real time, without the customer needing to come back later or use a different card.

Is Decline Code 01 a Hard or Soft Decline?

Code 01 is a soft decline. The transaction hasn't been permanently rejected. The bank has put a hold on approval pending verification, and if the cardholder calls in and confirms the transaction, the bank can issue a verbal authorization code that allows the merchant to complete the sale.

It's worth noting the distinction from a code 05. A code 05 is the bank saying no without explanation. A code 01 is the bank saying call us first. The outcomes can look the same on a terminal, but the path forward is very different.

How the Voice Authorization Process Works

Voice authorization is the mechanism that turns a code 01 from a declined transaction into a completed one. Here's how it works:

1. The cardholder calls the number on the back of their card. This connects them to their bank's authorization line, separate from general customer service.
2. The bank verifies the cardholder's identity. This typically involves security questions, account verification, or confirmation of recent transactions.
3. The cardholder confirms the details of the transaction. Amount, merchant, and in some cases location.
4. If approved, the bank issues a verbal authorization code. This is a string of digits that serves as proof the bank approved the transaction manually.
5. The merchant enters the authorization code into the terminal. Most terminals have a manual or voice auth entry option. The code is entered and the transaction processes as approved.

Keep the authorization code on file. If the transaction is disputed later, the voice auth code is part of your chargeback defense documentation.

How Merchants Should Handle Decline Code 01

1. Inform the customer their bank wants to verify before approving. Keep it straightforward: "Your bank is requesting a quick verification call before they approve this. If you call the number on the back of your card, they may be able to approve it right now."
2. Give the customer privacy to make the call. Step back, let them move somewhere they can speak freely. A call to confirm a transaction is going to involve identity verification details they shouldn't be sharing loudly at a register.
3. If they get approval, enter the voice authorization code into your terminal. Follow your terminal's process for manual authorization entry. The code the bank provides is what authorizes the transaction.
4. If they cannot reach their bank or the bank declines on the call, ask for an alternate payment method. The voice auth path didn't work. Treat it like any other decline from this point.
5. Do not retry electronically without a voice auth code. A code 01 tells you the bank wants to speak with the cardholder first. Running the card again without that step won't produce an approval and may return a harder decline.

Frequently Asked Questions About Decline Code 01

Can a code 01 decline be approved? Yes, and that's what makes it different from most decline codes. If the cardholder calls their bank, confirms their identity, and verifies the transaction, the bank can approve it in real time and issue a voice authorization code. The merchant enters that code and the transaction goes through. The path from code 01 to completed sale is straightforward as long as the cardholder can reach their bank.

What is a voice authorization code and how do I enter it? A voice authorization code is a numeric code issued by the bank when they approve a transaction verbally. It's typically six digits and serves as the bank's confirmation that they've manually authorized this specific transaction. To enter it, look for a "force" or "voice auth" option in your terminal's menu. The exact steps vary by terminal and processor, so if you've never done it before, it's worth familiarizing yourself with the process before you need it in front of a customer.

Is code 01 the same as code 05? No, though they can look similar at the terminal. Code 05 is a Do Not Honor response: the bank is declining the transaction, usually without specifying why, and retrying or calling in is unlikely to reverse it. Code 01 is a referral: the bank wants the cardholder to call before it will approve. One is a decision, the other is a condition. The practical difference is that a code 01 has a clear resolution path and a code 05 generally does not.

How long is a voice authorization code valid? Voice authorization codes are typically valid for the transaction session in which they're issued. They're tied to a specific transaction amount and merchant and aren't reusable for future charges. Once issued, the merchant should enter the code promptly. Waiting significantly changes the risk that the authorization window has expired. Keep the code documented regardless, as it may be needed for chargeback defense even after the transaction is complete.

Related Decline Codes

Code 01 is one of the few decline codes with a real-time resolution path. These related codes cover adjacent scenarios:

• Code 02 — Refer to Issuer Special. A variation of code 01 with a higher urgency flag. The bank wants cardholder verification but with additional scrutiny.
• Code 05 — Do Not Honor. The catch-all decline. Often confused with code 01 but has no resolution path through voice authorization.
• Code 59 — Suspected Fraud. The bank flagged the transaction for fraud rather than requesting verification.
• Code 51 — Insufficient Funds. A balance issue with no verification path.
• Code 41 — Lost Card. Hard decline. Card reported lost. Voice authorization will not override this.
• Code 43 — Stolen Card. Hard decline. Card reported stolen. Voice authorization will not override this.
• Code 63 — Security Violation. A security check failure, often a CVV or AVS mismatch.
• Code 78 — Blocked First Use. The card hasn't been activated. Activation resolves this, not a call to the issuer.