13.1 – Merchandise/Services Not Received

DESCRIPTION

Why did I receive a chargeback with reason code 13.1?

You received this chargeback because the customer claims you didn’t provide the goods or services as promised.

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CLASSIFICATION

How does Visa classify this dispute?

Visa chargeback reason codes are split up into four categories: fraud, authorisation errors, processing errors, and consumer disputes.

Reason codes that start with 13 are used for consumer disputes.

ISSUER TIME LIMIT

How long can the issuer wait to file a chargeback with reason code 13.1?

Before filing a chargeback, the issuer must give you — the merchant — time to fulfill your obligations. If you can’t deliver what you promised in the given time frame, then you can refund the transaction to stop the chargeback from happening.

If your business hasn’t filed for bankruptcy, the issuer must let at least 15 days pass between the transaction date and the chargeback filing date if:

• You didn’t specify an exact delivery or service date
• The cardholder returned merchandise because it was delivered late

The issuer must also wait at least 15 days if you canceled the goods or services.

If your business is a ticket agency that sells third-party event tickets, the issuer must delay the chargeback by at least 30 days from the date the service provider cancelled the service.

If a cardholder or traveler in Europe was required to attempt reimbursement from a bonding authority or insurance scheme, the issuer must wait 60 days from the date the claim was submitted.

If — after waiting the required amount of time — the goods or services haven’t been provided or the transaction refunded, the issuer is allowed to initiate a chargeback. It must be filed within 120 days of either the transaction processing date or the date the cardholder expected to receive the goods or services. However, regardless of the anticipated delivery date, all chargebacks must be filed within 540 days of the initial transaction.

VALIDITY

What would make a 13.1 chargeback invalid?

An issuer is not allowed to use reason code 13.1 in the following situations.

• The transaction was an ATM cash disbursement.
• The transaction used straight-through processing.
• The transaction was unauthorised and a fraud reason code should be used instead.
• The transaction was initiated at an automated fuel dispenser (AFD).
• The cardholder disputes the quality of the merchandise or service.
• The cardholder canceled the order before the expected delivery date.
• The merchandise is being held by a customs agency in the cardholder’s country. You are only liable for merchandise held by a customs agency in your country.
• The cash-back portion of the transaction is being disputed.
• The cardholder can’t access the purchased non-fiat currency or non-fungible tokens after a successful delivery.

SUPPORTING DOCUMENTS

Can I fight a chargeback with reason code 13.1?

Yes. You can and should fight invalid chargebacks if you have documents to support your case.

Here is a list of acceptable forms of evidence.

• Evidence that the chargeback is invalid. (Note: Your acquirer’s technology should catch these errors and automatically respond on your behalf. If your acquirer doesn’t automatically respond and you receive a chargeback notice, you can challenge the chargeback yourself.)
• Evidence that you refunded one of the transactions before the chargeback was filed.
• Evidence that the cardholder no longer disputes the transaction.
• Evidence that the cardholder — or an authorised person — received the services at the agreed upon location and time.
• Evidence that the cardholder — or an authorised person — received the merchandise at the agreed upon location and time. This could include delivery confirmation or a signature, PIN, or collection code for items collected in person.
• Evidence that the flight in question did, in fact, depart.
• Evidence that the service had not been cancelled and was still available.
• Evidence that non-fiat currencies or non-fungible tokens were successfully delivered to the address provided by the cardholder. Evidence should include the destination wallet address or a blockchain transaction hash — which must be searchable on an open-source website.

WORKFLOW

What process do I use to respond to a chargeback with reason code 13.1?

Visa reason code 13.1 is managed with the collaboration workflow.

To challenge an invalid chargeback, you’ll need to collect the supporting documents outlined above, write a rebuttal letter, and submit your entire package for review.

ACQUIRER TIME LIMIT

How quickly do I need to file a chargeback response?

Your acquirer must submit your chargeback response within 30 calendar days of the chargeback filing date.

NOTE: This is the acquirer time limit. Because the acquirer uses some of that allotted time to complete administrative tasks before sending you the chargeback notice and after receiving your response, your time limit is probably much shorter — typically about 3-20 days. Check your chargeback notice for the expiration date.

ADVANCING THE CASE

Can the issuer file pre-arbitration after a 13.1 dispute response?

Yes. An issuer can file pre-arbitration for any collaboration dispute — including disputes with reason code 13.1.

Pre-arbitration allows the issuer to address information or evidence provided in your dispute response.

After receiving a collaboration dispute response, the issuer can make a pre-arbitration attempt for any of the following reasons.

• The issuer can provide new documents or information about the original dispute.
• The issuer changes the reason code because of information or documents provided in the dispute response. (The issuer can only change the reason code if the original chargeback was valid.)
• If your dispute response included a claim that the cardholder no longer wants to dispute the transaction, the issuer must prove that the cardholder does, in fact, want to continue the dispute.
• If you provided the required supporting documents and disputed the cardholder’s claim, the issuer must review the evidence with the cardholder and provide an explanation of why the cardholder continues to dispute the transaction.
• If you refunded the cardholder after the chargeback was filed, but the issuer suffered a financial loss because of the exchange rate, the issuer can advance the case to pre-arbitration.

Here are additional pre-arbitration options specifically for reason code 13.1.

• If your dispute response states the cardholder provided the wrong expected delivery date, the issuer must provide evidence to support the cardholder’s original claim.
• If your dispute response states that the cardholder did not return the merchandise, the issuer must provide evidence that the cardholder attempted to return the merchandise or it was returned and you received it.
• If your dispute response claims the cardholder took the merchandise at the time of the sale, the issuer must provide evidence that you agreed to deliver the goods at a later date.
• If your dispute response states that you cancelled a future service, the issuer must provide evidence that you notified the cardholder of the cancellation.
• If your dispute response states that the merchandise was supposed to be delivered to a different address, the issuer must provide evidence to support the agreed upon address.
• If your dispute response includes proof of delivery, the issuer is required to certify that the information was reviewed and addressed with the cardholder and explain why the cardholder continues to dispute the transaction.

PREVENT

How can I avoid chargebacks like this in the future?

Here are some things you can do to prevent future 13.1 chargebacks.

• Abide by the delivery date you promised.
• Have merchandise ready for pickup at the time you specified it would be available.
• Make sure you accurately describe the services that will be provided.
• Don’t charge the card until the merchandise has been shipped.
• Notify the customer as soon as possible if merchandise is out of stock or the delivery will be delayed.

For a full list of chargeback prevention tips, visit our detailed guide.