Visa Reason Code 13.7: Cancelled Merchandise/Services

What Visa Reason Code 13.7 Means

Visa reason code 13.7, titled Cancelled Merchandise/Services, is filed when a cardholder cancelled an order before it was shipped or a service before it was rendered, or when a customer returned merchandise expecting a refund, but the merchant either did not issue the credit or disputes the right to do so.

Unlike 13.2 (which is specifically for recurring billing), 13.7 covers one-time transactions — a single purchase the customer wants to undo. The core question is whether the merchant's cancellation or return policy allows the refund being demanded, and whether that policy was clearly disclosed before purchase.

Cross-Network Equivalent Codes

Common Trigger Scenarios

• Pre-shipment cancellation ignored. The customer cancelled an order before it was shipped, but the merchant shipped anyway. The customer refused delivery or returned the item and disputes when no refund follows.
• Service cancelled before delivery. A customer paid for an event, consultation, or service and cancelled before the service date, but the merchant retained the full payment despite a refund policy that should allow at least partial return.
• Return received, refund not issued. The customer returned merchandise and the merchant received it, but the credit was never processed — either due to condition disputes, restocking fee conflicts, or operational failures in the returns workflow.
• Non-refundable policy not clearly disclosed. The merchant has a no-refund or all-sales-final policy, but it was buried in terms, appeared only after the purchase, or was not specifically acknowledged by the customer. Visa will not enforce a policy the customer did not clearly agree to.
• Refused delivery dispute. The customer refused to accept delivery at the door and expects a refund. Whether this is valid depends on whether your terms address refused deliveries and whether the customer was informed of any associated fees.

Key Deadlines & Timeframes

Evidence You Will Need

• Cancellation/return policy as displayed at time of purchase — screenshots of the checkout page, policy page, or terms showing the exact cancellation terms the customer agreed to
• Customer agreement to those terms — checkout confirmation, terms acceptance checkbox, or signed agreement
• No cancellation request record (if applicable) — documentation showing no valid cancellation request was received before shipment or service delivery
• Proof goods were not returned (if merchant disputes the return) — inventory records, warehouse logs, or absence of RMA record
• Evidence service was delivered prior to any cancellation request — session logs, completion records, or delivery confirmation
• Communication history showing any cancellation request timeline relative to when the order was fulfilled

How Merchants Lose This Dispute

• Policy not disclosed conspicuously at checkout. A cancellation or no-refund policy that appears only in fine print, a buried FAQ, or is accessible only after payment completion will not be enforced by Visa. Policy must be front-and-center before the customer commits to the charge.
• Shipping after receiving a cancellation request. If a customer cancels before you ship and you ship anyway, the resulting dispute is very difficult to defend. Cancel orders as soon as a cancellation request is received and confirmed.
• Claiming you never received the return without documentation. If you dispute a return claim, you need objective evidence — not just a statement that the item was not found. Inventory records, receiving logs, and returns tracking are all required to make this argument credibly.
• Restocking fees not disclosed pre-purchase. If you deduct a restocking fee from the refund but that fee was not clearly disclosed at purchase, the customer can successfully dispute the withheld amount as a credit not processed.

Response Framework Overview

1. Establish policy disclosure. Open with documentation showing your cancellation/return policy was clearly presented before the customer completed the purchase.
2. Show customer acknowledgment. Present the terms acceptance, checkout confirmation, or signed agreement demonstrating the customer agreed to those terms.
3. Address the cancellation/return timeline. If the cancellation came after the fulfillment point your policy specifies, show the timeline evidence that places their request outside your refund window.
4. Document return status. If the customer claims they returned the item, address whether you received it and in what condition — or document that no return was received.

Prevention Tips

• Display cancellation and return policies on the checkout page. Not linked — displayed. A customer who sees your policy before entering payment information is far less likely to dispute on policy grounds.
• Process pre-shipment cancellations immediately. The moment you receive a cancellation request before an order ships, stop the shipment and issue the refund within 24 hours. Most 13.7 disputes are completely avoidable at this stage.
• Use an RMA system for returns. A formal return authorization process creates a documented paper trail for every return: when it was requested, approved, received, and credited. This record eliminates most return-related disputes.
• Be explicit about non-refundable items at point of sale. If certain items are non-refundable (digital downloads, custom goods, clearance items), label them explicitly on the product page and at checkout — not only in the terms of service.

Frequently Asked Questions

What is the difference between Visa 13.7 and 13.2?

Code 13.2 applies to recurring/subscription charges the cardholder claims they cancelled. Code 13.7 applies to one-time purchases where the customer cancelled the order before fulfillment, returned the item, or claims the service was cancelled. The key distinction is recurring billing (13.2) versus a single transaction (13.7).

Can I keep a non-refundable deposit if the customer files a 13.7 chargeback?

Yes, if the non-refundable terms were clearly disclosed and the customer agreed to them at the time of purchase. You must produce evidence that the no-refund policy was presented conspicuously and that the customer accepted those terms. If the disclosure was clear and documented, Visa will generally uphold non-refundable terms.

What if the customer claims they returned the item but I never received it?

The burden of proof for a return works the same way as delivery proof for a sale. The customer must show you received the return, not just that they shipped it. A tracking number showing delivery to an address near your business is not the same as proof you have the item. Document the absence of a received return and include it in your representment.

Does a no-return policy protect me from 13.7 chargebacks?

A clearly disclosed no-return policy strengthens your position significantly but does not guarantee a win. Visa still considers whether the policy was conspicuously presented before purchase and whether the goods were delivered as described. A no-return policy is strongest when paired with accurate product descriptions and clear policy disclosure at checkout.

Related Codes & Resources