What is Visa Reason Code 13.1?

October 11, 2023/ Jarrod Wright /

Card networks, like Visa, have established reason codes to standardize chargeback causes. Although seemingly straightforward, these codes can be misleading as the stated reason may not always reflect the true cause of the chargeback.

Moreover, subtle differences exist across card networks that can lead to costly oversights. This article will walk you through Visa reason code 13.1, which sets the tone for merchant chargebacks.

What is Visa Reason Code 13.1?

Visa’s chargeback reason code 13.1 is the successor to the older reason code 30, which was replaced as part of the Visa Claims Resolution initiative. It comes into play when customers assert non-receipt of goods or services.

Reason code 13.1 primarily suggests a delivery lapse by the merchant. However, it also encompasses scenarios like theft from a cardholder’s property or cancellations due to delayed deliveries beyond the agreed date.

Causes of Visa Reason Code 13.1 Chargebacks

Chargebacks invariably pose challenges for merchants, with many stemming from avoidable merchant oversights. Recognizing these typical missteps is essential to circumvent a Reason code 13.1 chargeback:

• The merchant didn’t deliver the merchandise or service as promised.
• The goods weren’t dispatched by the stipulated date or time.
• Deliveries deviated from the agreed-upon location.
• The transaction was billed before the merchandise’s dispatch.
• The merchant didn’t facilitate merchandise pick-up when needed.

Chargeback Reason Code 13.1: Merchant Rights & Limitations

Banks strive to thoroughly assess each claim before heading into a dispute. However, the significant uptick in chargeback cases often means that banks might have to lean on the side of the customer’s claim for sheer efficiency. Despite this, there are guiding principles for chargebacks under reason code 13.1. Firstly, cardholders are encouraged to pursue an initial resolution with the merchant and provide evidence of such attempts to the processor.

Furthermore, it’s essential to note that chargebacks won’t accommodate refunds for the cash-back element in relevant transactions. If goods are delayed, customers are advised to return them and observe a 10-day window before requesting a chargeback. The standard processing duration spans 120 days from the date of the transaction or the final anticipated delivery date but not exceeding 540 days from the transaction’s inception.

In scenarios without a merchant-specified delivery date, there’s a 15-day grace period post the initial transaction before a dispute can be lodged. Similarly, if products are returned owing to tardy delivery, a subsequent 15-day waiting period ensues before the issuer can commence a dispute.

How to Prevent Reason Code 13.1 Chargebacks

A solid understanding of associated chargeback reason codes can be pivotal for merchants transacting with Visa cards. Visa’s reason code 13.1, centered on transactions that didn’t receive proper authorization, is a prime example. By focusing on strategies tailored to this code, merchants can boost their transaction security and foster stronger trust with customers.

Here are 10 ways to sidestep Visa reason code 13.1 Chargebacks:

#1. Robust Authorization Methods

Ensure all transactions, particularly those online or over the phone, undergo thorough authorization. Tools like Verified by Visa, and practices like two-factor authentication (2FA) can offer additional security.

#2. Transaction Notifications

Customers can choose to receive alerts through email or SMS each time their account is charged. This promotes transparency and can deter unauthorized activities.

#3. Stay Updated on Authorization Best Practices

As technological landscapes and fraud methods change, keep your authorization practices refreshed and current.

#4. Timely Responses to Information Requests

Should Visa or another card issuer seek transaction details, respond quickly with all necessary information. This can often nip potential chargebacks in the bud.

#5. Clear Transaction Labels

Ensure that the transaction details visible on customers’ statements are distinct and easily identifiable. Ambiguous descriptions might lead to mistaken perceptions of unauthorized activity.

#6. Train Your Team

Equip your staff with knowledge and training on securing proper transaction authorizations, especially those handling payments.

#7. Prioritize Payment Security

Utilize trusted payment gateways, regularly update your systems, and adhere to established security standards like the Payment Card Industry Data Security Standard (PCI DSS).

#8. Document Everything

Keep comprehensive records of transactions, including specifics like date, time, and authorization details. This can be invaluable if disputes arise.

#9. Monitor Transaction Patterns

Regularly scrutinize your transactions to spot anomalies or sudden changes that might suggest fraud or system vulnerabilities.

#10. Encourage Open Communication

Ensure customers can easily reach out with transaction concerns. Addressing issues head-on can prevent misunderstandings from escalating.

Addressing the nuances of Visa reason code 13.1 is a step in the right direction. By proactively adopting these strategies, merchants mitigate chargeback risks and position themselves as trusted and secure entities in the market. Building and maintaining this trust is paramount for enduring success in an increasingly digital world.

Last Update: October 11, 2023