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13.5 – Misrepresentation

Visa Reason Code 13.5: Misrepresentation

For the sake of simplicity and standardization, card networks like Visa have created a breakdown of the acceptable causes for a customer to dispute a credit card transaction by filing a chargeback. Each of these causes has a designated “reason code,” and banks assign the appropriate code to each case to show the given reason for the chargeback.

That sounds simple enough, but the reality is, the given reason for a chargeback may or may not be the true reason. Plus, each card network has its own set of reason codes—which, while nearly the same in function, nevertheless differ from one another. Keeping track of all these codes, along with the best ways to either fight or prevent each one, is challenging.

With that in mind, let’s take a look at Visa Reason Code 13.5: Misrepresentation.

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What is Visa Reason Code 13.5?

Chargeback reason code 13.5 is part of the updated Visa reason codes that were phased out under the Visa Claims Resolution initiative. This specific code applies when a cardholder claims that the terms of the sale were in some way misrepresented.

Originally, this condition fell under legacy reason code 53: Merchandise Not as Described, which also covered damaged or defective merchandise (now represented by reason code 13.3) and counterfeit merchandise (new code 13.4). Essentially, reason code 13.5 chargebacks can happen whenever a customer feels that the terms of the purchase they made were not clear, or were misrepresented by the merchant. This can be the result of innocent merchant error, intentional merchant fraud or—most likely—friendly fraud.

Merchant Errors, Rights & Limitations

Chargebacks of any kind are nothing but trouble for merchants…yet many chargebacks are the direct result of preventable merchant missteps. Misrepresentation chargebacks, for instance, are the result of mistakes on the part of the merchant. The good news here is that these chargebacks are, for the most part, preventable.

“Misrepresentation” is a somewhat ambiguous term. There are many circumstances where the customer might feel a merchant should have been clearer. That said, there are certain verticals in which chargebacks of this type are more common, including:

  • Timeshare Sales
  • Debt Consolidation Services
  • Credit/Mortgage Repair
  • Counseling
  • Foreclosure Relief Services
  • Technical Support or Service
  • Potential Income Opportunities

These are just a few examples, but merchants who deal in these types of products need to be especially clear when explaining terms and conditions to customers. With a little diligence, merchants can stop these cases before they happen.

Those aren’t the only causes of reason code 13.5 chargebacks, though. As mentioned earlier, the given reason for a chargeback may be far different from the actual reason. A cardholder who knowingly tries to file a chargeback under false pretenses is committing friendly fraud.

While banks try to investigate all claims thoroughly before processing a dispute, the meteoric rise in chargeback cases has made this extremely difficult. In many cases, it’s more efficient to simply take the customer’s claim at face value. Fortunately for merchants, there are at least some time limitations placed on chargebacks filed under reason code 13.5. The dispute processing time limit is 120 calendar days from either:

  • The day the transaction was processed.
  • The date the customer received the goods or services (not to exceed 540 days beyond the original transaction processing date).

Reason Code 13.5: Prevention & Response

No matter how faithfully merchants follow the rules, there will always be people who attempt to take advantage of the system. That said, there are certain steps merchants can put into place to try and mitigate the risk of chargebacks with a misrepresentation reason code:

  • Double-check the descriptions of merchandise or services anywhere they are displayed. This includes advertising, in printed catalogs, and even transaction receipts. Make sure telephone order-taking scripts are also as accurate as possible.
  • Clearly and concisely communicate all terms of service, and post the information in multiple easy-to-find locations.

While one’s return policy has no bearing on disputes that fall under this reason code, a sound, practical return policy—again, clearly stated in multiple locations—may help avoid reason code 13.5 (and other) chargebacks.

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While preventative measures can significantly lower overall volume, some illegitimate chargebacks will slip through the cracks. Merchants who have evidence that refutes a cardholder’s claim should definitely challenge the chargeback through Visa’s dispute process. Here are some steps merchants can take to make the representment process more successful:

If…

Then…

The goods or services were not misrepresented… …provide documentation that proves the terms of sale were provided and understood.
The claim is valid… …you must accept the dispute.
You have already processed a reversal, or issued a credit for the transaction... …provide documentation of the credit reversal, including the amount of the credit and the date it was processed.
The cardholder no longer disputes the transaction… ...provide a signed letter or statement from the cardholder that clearly states they no longer dispute the transaction.

Take a Wider View

Invalid misrepresentation chargebacks from Visa Reason Code 13.5 can be disputed, but it’s much more efficient to take a proactive stance. The same is true of the other chargeback reason codes, as well. A truly effective chargeback management strategy must encompass prevention as well as disputing cases of friendly fraud.

Chargebacks911® can help your business manage all aspects of chargeback reason codes, with proprietary technologies and experience-based expertise. Contact us today for a free ROI analysis to learn how much more you could save.


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