13.7

Visa Reason Code 13.7: Cancelled Merchandise

A 13.7 dispute means the buyer says they cancelled or returned, and you never gave the money back. Here is what to do about it.

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Visa
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Visa reason code 13.7 is called Cancelled Merchandise/Services. It is one of the codes in Visa's 13 Consumer Disputes group. The cardholder says they cancelled an order, ended a service, or sent goods back, and you never gave them a credit. Here is what the code means, how to fight it, and how to keep it from happening again. If you are new to these notices, start with how to read a chargeback notice.

What is Visa reason code 13.7?

A Visa dispute is how a card issuer sends a contested transaction back. If the dispute is valid, the acquirer takes the money from your merchant account. Then it tells you. Under 13.7, the cardholder says they cancelled or returned goods or services. The claim is that the merchant never gave the money back.

This code is about money you owed back and never sent. It is not about fraud. A cardholder who never bought anything at all would fall under a different code, such as 10.1 or 10.2.

Common scenarios that trigger a 13.7 dispute

A few situations show up again and again.

  • The buyer cancelled a subscription before the next billing date, but you charged them anyway.
  • The buyer cancelled an order before it shipped, but you shipped it and kept the payment.
  • The buyer returned an item, but the refund never showed up on their card.
  • You billed for a service after the cardholder ended the contract.

Watch for one trap. A 13.7 claim about bad quality is not valid. The cardholder must have a Credit Transaction Receipt to use it. If the buyer says the product was broken or wrong, that fits 13.3 or 13.4 instead.

How to defend against a 13.7 chargeback

A merchant can accept a Visa dispute, or reject it by sending supporting documents to its card processor. If you think the claim is wrong, reject it. Your proof must show one of two things. The cardholder never cancelled. Or you already gave the money back.

Useful documents include:

  • Proof the cancellation came after the cutoff date in your policy. A dated email or call log works.
  • Proof you sent the goods or did the work after the cutoff date for cancelling.
  • A refund record. It shows you already sent the money back.
  • Your refund or cancellation policy. Add proof the buyer agreed to it.

Visa dispute evidence must be easy to read and in English, or come with an English translation. Label each document so the reader knows what it shows. Keep it short and aimed at the exact claim.

Prevention tips for merchants

Most 13.7 disputes come from confusion about refunds. Fix that and you fix most of the risk.

  • Make refunds fast. A buyer who waits too long for a credit will call their bank instead of waiting longer.
  • An online store must show its refund policy and have the buyer click to accept it. Do the same in your app or checkout flow.
  • Send a clear email when you accept a cancellation or return. Include the date and the refund amount.
  • If you must decline a refund, say so in writing and point to the policy term that explains why.
  • For subscriptions, send written proof of every cancellation. Do this before the next charge date.

What to do if you receive a 13.7 chargeback

Act fast. Each step of a Visa dispute has a set time limit, so a late answer can lose the case. Check the deadline on the notice the day it arrives.

Decide whether to accept or fight. If the buyer was right and you owe the money, accept it and move on. If the claim is wrong, send your proof to your processor. An acquirer may respond only once to the original Visa dispute. So make that one reply count.

If you win, the case may not be over. The issuer can push it into pre-Arbitration, where it must deal with the evidence you gave. To see how that round works, read what happens after you answer a chargeback.

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