Merchants who receive a chargeback for a transaction placed with an American Express card may encounter reason code R13, which indicates a chargeback generated as a result of an inquiry from American Express. The actual underlying cause of this chargeback is usually merchant error. Merchants who believe they have received an invalid chargeback under reason code R13 may be able to represent the transaction and reverse the chargeback with the right compelling evidence.
What is American Express Chargeback Reason Code R13?
American Express chargeback reason code R13 falls under the “Inquiry/Miscellaneous” category. The shorthand description is “No Reply.” As both a card network and an issuer, American Express takes it upon themselves to send inquiries to merchants, through their acquirers, when they take a dispute call from a card member and they feel that they don’t have enough information to decide whether it would be appropriate to escalate it to a chargeback. When a merchant receives an inquiry, they have the opportunity to provide detailed information and records that may influence their decision.
When a merchant opts not to reply to an inquiry, or fails to respond within the allowable timeframe, American Express will automatically rule in favor of the cardholder, turning the dispute into a chargeback bearing this reason code.
What Scenarios Might Lead to This Chargeback?
This chargeback can only occur when American Express has sent an inquiry message to the merchant and received nothing in reply. That means that the root cause of the cardholder’s dispute can be literally anything—true fraud, merchant error, or friendly fraud. The unfortunate rule of all chargebacks is that the burden of proof is on the merchant to prove that a disputed charge is valid, and by default they carry the liability for chargebacks. So when you get an inquiry about a dispute in its earliest stages, that’s your best opportunity to make your case and present any evidence you have that can resolve the dispute in your favor.
A “no reply” chargeback is a significant missed opportunity, whether it happens because you overlooked the notification, were unable to respond in time, or simply chose to ignore it.
Every inquiry is a chance to practice gathering relevant evidence, making your case to an issuer, and learning more about why you’re getting disputes and what you can do differently to prevent them.
What are the Important Timeframes?
The acquirer and/or merchant have 20 days to respond to this chargeback after it is filed. No special timeframes apply to the cardholder.
How Can Merchants Fight this Chargeback Code?
If you believe you have received this chargeback in error, you may be able to fight it. The best way to do so is to submit representment with evidence that includes at least one of the following items:
- Proof that you did, in fact, provide a substantive reply within the allotted time limit, along with documentation and records that support this claim.
- If you have already processed a refund for the transaction that is being disputed, provide documentation that proves you have credited the cardholder’s account.
How Can Merchants Prevent this Chargeback Code?
Sometimes, the reason a merchant receives one of these chargebacks is because they don’t have enough staff to respond to chargeback messages in a timely fashion. This can be frustrating, as it is an easy problem to fix—but only if you have adequate resources to allocate to chargeback management. Many merchants believe that they don’t, but it’s important to remember what a serious problem chargebacks can become if they get out of hand. They can cost you more than double the amount of the original transaction, and excessive chargeback rates can get you rejected by your payment processor.
These tips can help you with avoidance and prevention of avoidable inquiry chargebacks:
- Maintain complete and accurate records for each transaction you process.
- Make sure you can access this information quickly and easily when you need it.
About American Express Chargeback Reason Codes
Reason codes are alphanumeric codes that provide the justification for granting a chargeback. Pursuant to the Fair Credit Billing Act of 1974, cardholders have the right to dispute unauthorized or erroneous charges and issuing banks must reverse a disputed transaction of the cardholder’s claim is valid.
When a cardholder contacts their issuing bank to dispute a transaction and receive a chargeback, the dispute is assigned a reason code that most closely matches the substance of the cardholder’s claims. The reason code provides the merchant and other stakeholders in the dispute with a concise explanation for why a chargeback has been granted.
Each card network—Visa, Mastercard, American Express, and Discover—defines and maintains their own unique set of reason codes, which are applied to disputes by the banks that issue credit and debit cards under their brands.
As both a card network and an issuer, American Express specifies 34 reason codes under the categories of Fraud, Authorization, Processing Errors, Card Member Disputes, and Inquiry/Miscellaneous. Each American Express reason code consists of one or more letters, indicating the category, and a number that identifies the specific dispute reason.
Understanding chargeback reason codes is one of the most essential parts of effective chargeback management. Identifying the chargeback reason code and the evidence required to fight it is the first step in chargeback representment, and analyzing your chargeback reason codes can provide you with insights into what types of disputes are causing you the most trouble. With this information, you can determine the root causes of your chargebacks and take action to prevent them from reoccurring.