Visa Reason Code 13.3: Defective or Not as Described Merchandise/Services
Card networks like Visa have created a breakdown of the acceptable reasons for a customer to dispute a credit card transaction. Each of these has a designated “reason code,” and banks assign the appropriate code to each case to indicate why the dispute occurred.
With that in mind, let’s take a look at Visa Reason Code 13.3: Not as Described or Defective Merchandise or Services. This reason code is assigned to consumers wishing to file a chargeback for defective product. It is very similar to: Mastercard's 4853- Defective/Not as Described Reason Code
What is Visa Reason Code 13.3?
Chargeback reason code 13.3 is an updated version of legacy reason code 53, which was phased out under the Visa Claims Resolution initiative. This code applies when a cardholder reports that the actual merchandise received (or service provided) differs greatly from the written or verbal description provided at the time of purchase.
Other reasons for an "item not as described chargeback" can include damaged or defective merchandise, as well as disputing the quality of the merchandise or service. Essentially, reason code 13.3 chargebacks can happen whenever the quality of what the cardholder ended up with is lower than what was expected. This can be the result of innocent merchant error, intentional merchant fraud, or more likely, friendly fraud.
Customers Filing Under False Claims?
“Not as described” chargebacks are often friendly fraud. Click to learn more.
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. It’s crucial for businesses to recognize the common merchant errors that might trigger a defective goods chargeback:
- The merchant shipped the wrong merchandise to the cardholder.
- The merchandise was shipped, but it was damaged during shipment; this could be the result of improper packing on the part of the merchant.
- The merchandise was defective in some way before it was shipped.
- The merchant inaccurately described the merchandise or services, either in a written description or in a verbal agreement.
- The merchant did not perform the services as described.
Obviously, there’s a problem that needs to be addressed if a merchant regularly provides merchandise or services that don’t match the description, or consistently see packages damaged in shipment. But those aren’t the only causes of reason code 13.3 chargebacks.
Effective October 19, 2024, cardholders will be required to return (or at least attempt to return) merchandise before requesting a reason code 13.3 dispute. If the cardholder can’t return the goods to the merchant, a valid reason must be provided and documented.
This means a reason code 13.3 dispute is also allowed if one of the following is true:
- The merchant refused the returned merchandise
- The merchant refused to provide a return label
- The merchant told the cardholder not to return merchandise
- The merchant no longer exists
- The merchant is not responding to the cardholder
- The merchant didn’t provide clear return instructions
As mentioned earlier, the given reason for a chargeback may be far different from the actual reason. The cardholder who knowingly tries to file a chargeback under false pretenses commits 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 13.3:
- The dispute processing time limit is 120 calendar days from either the day the transaction was processed, or the date the customer received the goods or services (not to exceed 540 days beyond the original transaction processing date).
- The issuer cannot file a dispute for at least 15 calendar days from the date the cardholder returned, or attempted to return, merchandise or cancel services (unless this would cause the dispute to exceed timeframes). This applies if the customer returned merchandise or cancelled services (or attempted to do either) according to merchant policies*.
*Note that the cardholder must return or attempt to return the merchandise or cancel the services before the issuer is allowed to initiate a return.
Reason Code 13.3: 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 this specific type of chargeback:
- Double-check the descriptions of merchandise or services anywhere they are displayed: in advertising, online, in printed catalogs, and even transaction receipts. Merchants should make sure telephone order-taking scripts are as accurate as possible.
- Never refer the cardholder to the manufacturer in cases of damaged or defective goods. The merchant of record is considered the liable point of contact for resolution, so it is their responsibility to attempt to resolve the issue.
- A return policy has no bearing on disputes that fall under this reason code. That said, a sound, practical return policy—clearly stated in multiple locations—may help avoid reason code 13.3 chargebacks, along with other disputes.
While preventative measures can significantly lower overall volume, some illegitimate chargebacks will slip through the cracks. Illegitimate chargebacks with a “goods or services defective/not received” reason code typically stem from customers attempting to get something for a lower cost, or for free. These friendly fraud chargebacks should always be disputed by the merchant.
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 merchandise or service was as described… | …provide specific information to refute the cardholder’s claims, such as a signed invoice or contract. |
| Goods were allegedly returned, but have not been received, or services were allegedly cancelled but no cancellation order has been received or requested… | …first, carefully re-check your records to ensure that the cardholder's claim is false. Then show there is no evidence that the cardholder tried to make a return or cancel services. |
| The merchandise has already been replaced or repaired ...
|
…provide evidence of the following: a)The cardholder agreed to the repair/replacement; b) The repair or replacement was received by the cardholder; and c) The repair or replacement was not disputed after delivery. |
| 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 which affirms they no longer dispute the transaction. |
Take a Wider View
Invalid chargebacks from Visa chargeback Reason Code 13.3 can—and should—be disputed. However, a truly effective chargeback management strategy must encompass prevention as well as disputing cases of friendly fraud.
Chargebacks911® can help businesses 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.
