Visa Chargeback Reason Code 53
Chargeback Reason Code 53: Not as Described or Defective Merchandise
Chargebacks are designed to give card users peace of mind while buying services and merchandise with their credit cards. Visa chargeback reason code 53 is one example of the explicit ways in which chargebacks protect consumers and ensure accountability of merchants.
What is Reason Code 53?
Reason code 53 is generally known as the code for merchandise that is not as described or is defective.
Merchants can have reason code 53 filed against them if the customer claims the product purchased was:
- Inadequate for the purpose for which it was sold.
- Not what was described. The description here could be the transaction receipt, the product description on the seller’s website, or a verbal description given over the phone.
- Delivered defective or otherwise damaged.
Customers may only legitimately file a chargeback for reason code 53 if they can prove an attempt was made to resolve the dispute with the merchant directly. An attempt could be asking for a refund or requesting that the merchant take the goods back at the business’s expense.
- Refuses to accept returned merchandise.
- Accepts returned merchandise but fails to credit the customer’s account.
- Fails to perform the services described.
- Fails to cancel services as requested by the customer.
- Sends an incorrect shipment to the customer.
- Sends the correct shipment but the goods are damaged en route.
- Inaccurately describes the product.
Once a defective product is returned to the merchant, the merchant then has a fifteen day grace period to issue a credit before the cardholder is allowed to legitimately file a chargeback. Chargebacks may apply to just the value of the merchandise, though they can also include any shipping and handling fees incurred by the cardholder.
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Dos and Don’ts of Disputing Reason Code 53
Clearly, there are many reasons why cardholders may file a reason code 53 chargeback—including friendly fraud.
It can be difficult for merchants to detect the difference between honest chargebacks from fraudulent ones, so a merchant’s actions to dispute this type of chargeback vary by situation.
Merchants should accept the chargeback if:
- The customer returned the defective merchandise but the merchant has yet to issue a credit. Merchants should promptly issue credits within the fifteen day grace period for defective merchandise. However, if a merchant fails to issue a credit during this time, a chargeback could legitimately be filed. Do not dispute this type of chargeback and remember that it is not necessary to issue a credit as the chargeback has already fulfilled this role.
- The customer terminated a service but the merchant has yet to credit the customer’s account. As with the previous example, merchants should issue credits promptly to avoid this type of chargeback.
Merchants should dispute the chargeback if:
- A credit was given for faulty merchandise or an unsatisfactory service. In this case, the merchant has acted responsibly, so a chargeback is no longer valid. Evidence of the credit should be sent to the merchant’s acquiring bank to dispute the chargeback.
- The supposedly defective merchandise was not returned or the unsatisfactory service has not been canceled. In order for Visa chargeback reason code 53 to be valid, the customer must make a legitimate attempt to either return the merchandise or cancel the service. If the customer does not make a full attempt, the chargeback is not valid.
- The service or merchandise was delivered as described. If a cardholder claims that the merchandise does not match the description, the merchant may send the description and the customer’s invoice to the business’s acquiring bank to refute the chargeback. Merchants should address each individual point in the cardholder’s complaint.
Preventing Reason Code 53
Tactics merchants may take to prevent having a reason code 53 chargeback filed against them vary. As always, it is important for merchants to keep a paper trail and provide accurate descriptions. Specific steps that merchants can take include:
- Promptly issue a credit for faulty merchandise. If the customer agrees to send the merchandise back, merchants may choose to notify the cardholder that a credit will not be processed until the merchandise is received. No matter what the merchant chooses to do, regular communication should be kept with the customer so that the cardholder does not file a chargeback out of ignorance of the merchant’s intention to issue a credit.
- Be accurate in product descriptions. Merchants should remember that, occasionally, their marketing causes chargebacks if the product does not live up to certain claims made in an advertisement. Descriptions should be honest, flattering, and not intentionally misleading.
- Ship the correct merchandise each and every time. Mistakes may occasionally happen, though merchants should regularly review their shipping and handling procedures to cut down on human errors that can easily lead to chargebacks.
Merchants who have a Visa chargeback reason code 53 filed against them should see the chargeback as a warning sign; either their marketing strategy, credit issuing, or shipment procedures need to be amended.
Some instances, such as damage incurred during shipment, cannot be avoid. However, there are reasonable steps that merchants can take to prevent this kind of chargeback and ensure maximum customer satisfaction.
For most merchants, the majority of reason code 53 chargebacks are caused by friendly fraud. Because these attacks are launched by seemingly satisfied customers, they are difficult to manage.
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If you are struggling with reason code 53 chargebacks, let us know. We’ll help you design a customized chargeback management solution.
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