Understanding Visa Chargeback Reason Code 13.4: Counterfeit Merchandise

Visa Reason Code 13.4 means the cardholder, or an expert acting on their behalf, believes the goods they received are counterfeit. These claims can trigger financial loss, penalties, and lasting damage to a brand’s reputation. Understanding the reasons behind 13.4 and the best way to respond to a claim helps merchants avoid these issues.

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Key Takeaways

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• What it means: Visa believes the item supplied is counterfeit, based on evidence from the cardholder or a recognised authority.
• Causes: Selling counterfeit goods (even unknowingly). Misleading product descriptions. Friendly fraud.
• How to respond: Show proof of authenticity, proof of refund, or acceptance of liability. Respond within the set time limit.
• How to prevent: Buy from reputable suppliers. Ensure honest descriptions. Train staff. Try out chargeback alerts.

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What is a Visa Reason Code 13.4 Chargeback?

Reason Code 13.4 sits in Visa’s Consumer Disputes group. It applies when a buyer states an item advertised as genuine turned out to be counterfeit once received and inspected. The claim must be supported by the intellectual property owner, a customs or law enforcement agency, or an independent expert. 

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Visa gives issuers the power to reverse the sale because counterfeit trade harms cardholders and brands alike. The code overrides a shop’s return policy; even if “all sales are final”, the bank can still remove funds. For merchants, the dispute is not about simple dissatisfaction; it is a direct allegation of fraud. Accepting or fighting the claim depends on the evidence you can supply. Understanding the rule is the first step in deciding how to respond/fight.

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Primary Causes for a Code 13.4 Chargeback

The most obvious cause is merchant error—knowingly or unknowingly selling fake goods. Cheap suppliers, grey-market wholesalers, or marketplace dropshippers may pass off copies as originals. Without sufficient due diligence on suppliers, this can leave merchants exposed. Misleading photos or captions that hint at a famous brand without naming it can also trigger disputes. Another cause is friendly fraud. The goods are genuine, but the cardholder claims they are fake to get free merchandise. 

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Fraudulent claims also occur with luxury, collectable, or high-tech items that are easy to resell. Finally, clerical errors such as mixing stock or mislabelling SKUs can result in a 13.4 dispute. This happens when an authentic item is shipped without documentation to prove its origin. Knowing these causes gives merchants a roadmap on how to prevent future cases.

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Time Limit for Disputing a Visa Reason Code 13.4 Chargeback

Visa sets a strict timetable. The issuer has 120 calendar days to raise the dispute, counting from the transaction date, the delivery date, or the date the customer first became aware that the goods were fake—whichever is the latest. None of these points may be more than 540 days after the original sale. 

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Once the chargeback arrives, the acquirer must submit the merchant’s response within its own deadline, generally 30 days. Failing to act on time means an automatic loss of funds. Merchants should keep shipment, delivery, and authentication records organised and easy to retrieve. Quick access to evidence can make the difference between reversing a loss and accepting it.

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What 13.4 Means for Consumers & Issuers

For cardholders, the protection offered by 13.4 provides reassurance when using their card for in-store and online purchases. They can shop with confidence, knowing that the issuer will be able to step in if they receive counterfeit goods, and they won't be left out of pocket. This helps encourage widespread card usage.

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For issuers, on the other hand, 13.4 disputes are more complex, requiring them to assess the cardholder’s claim against available proof. They require expert statements or documentation before filing the chargeback, which comes at a cost. Therefore, they respond more positively to merchants who act on 13.4 disputes promptly. Strong evidence from sellers or prompt acceptance of a dispute helps issuers close files quickly and maintain customer satisfaction.

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What 13.4 Means for Merchants

The total cost of a 13.4 dispute is more than just the transaction amount or the goods at risk. On top of this, there are gateway or fulfilment fees – usually non-refundable, as well as chargeback penalties. For merchants who experience a high volume of these types of disputes, there is also a long-term impact to consider. 

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Higher dispute ratios can push merchants into Visa monitoring programmes, triggering higher processing costs. To avoid chargebacks, sellers should source goods carefully and keep detailed records. Merchants in fashion, electronics, footwear, and luxury accessories are especially vulnerable.

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How to Respond to a Code 13.4 Chargeback

Start by reading the reason code and checking the dispute window. If you're still within the time limit, gather the relevant evidence quickly. Examples include manufacturer invoices, certificates of authenticity or serial numbers. Like issuers, merchants can also arrange expert appraisals to prove their case. Include delivery confirmation to show the right item reached the right customer.

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In cases where you have issued a refund or shipped replacement goods, provide proof. Or, if the buyer has agreed to withdraw the dispute, attach their written statement or email. Organise documents in chronological order, add a concise cover letter, and submit through your acquirer’s portal. Good record-keeping and prompt replies show issuers you are cooperative. This can work in your favour in future disputes. However, if you can't prove authenticity, it's better to accept liability promptly to avoid extra fees.

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Proactive Prevention: The Ultimate Defence

Solid prevention strategies save money and spare you from stressful disputes. Vet your suppliers thoroughly. Demand proof of origin, especially for high-value and luxury brands. Compare incoming stock against official brand guidelines. Keep product pages honest: use clear photos, provide exact model numbers, and avoid language that could mislead. 

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Train staff to spot red flags, such as price points far below market value. Try out Chargeback.io to detect incoming issues before they become claims. Finally, maintain responsive customer service so buyers bring concerns to you first. Solving issues directly is the easiest way to prevent a chargeback from being formalised.

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