Visa 13.7: Cancelled Merchandise/Services

What is this reason code?

Raised when a cardholder says they cancelled a service (or returned merchandise), the merchant did not process a credit, and the merchant either did not properly disclose a limited return or cancellation policy at the time of the transaction or disclosed one but did not apply it. The disputed amount is limited to the unused portion of the cancelled service or the value of the returned merchandise.

Representment & Winning Strategy

The Visa rules list these grounds for a dispute response, and any one of them can be the basis: a credit or reversal you issued was not taken into account by the issuer; the dispute is invalid under the rules; the cardholder no longer disputes the transaction; the transaction receipt or another record proves you properly disclosed a limited return or cancellation policy at the time of the transaction; or you can show the cardholder received your cancellation or return policy and did not cancel according to it. For card-present sales, certification that the cardholder received the service or took the merchandise at the time of sale is also listed. Dates carry most of the weight, so line up when the customer cancelled (if they did) against when each charge was made. Timing also matters: an issuer generally must wait 15 calendar days after the cancellation before disputing, and must process the dispute within 120 calendar days of the transaction processing date or the date the service was expected, capped at 540 days from processing. Disputes about the quality of a service (unless a credit receipt was provided), or where the cardholder says the charge was fraudulent, are generally invalid under this code.

Required Evidence Checklist

To successfully reverse this chargeback, you should gather the following evidence. Verdact automates the ingestion of these files and links them to the dispute details:

• ✓Your cancellation and refund policy exactly as it was shown at checkout or signup, with the transaction receipt or another record showing it was disclosed (a checkbox log or signup record is a useful supporting record).
• ✓Billing and cancellation history showing the date the customer cancelled, if they did, and which charges fell before and after that date.
• ✓Any credit or refund you already issued, with the date, amount and Acquirer Reference Number (ARN), if the issuer did not take it into account.
• ✓Records showing the customer received your policy and did not cancel in line with it, such as no cancellation request before the renewal date.
• ✓Account usage or login records after the claimed cancellation date, if the customer kept using the service (suggested supporting record).