A customer cancelled the day after billing ran. Do I have to refund the charge?

You are not obligated to if the charge preceded the cancellation and your terms were properly disclosed, and a representment showing the timestamps typically wins. Whether you should is a different question: for a low-value rebill, refunding may be cheaper than a chargeback and better for the relationship. Many subscription merchants set an automatic grace-period refund policy for exactly this pattern.

How does Visa expect free trials that convert to paid subscriptions to work?

Visa's rules for trial and introductory offers require express informed consent to the recurring terms at enrollment, a reminder notification before the trial converts, clear descriptor identification, and a cancellation method at least as easy as signup, generally online. Merchants running trial funnels without these elements lose 13.2 disputes almost by default. Building them in also measurably cuts dispute volume, because surprise is what drives most of these cases.

Why do customers dispute instead of just cancelling?

Usually because cancelling looked harder than calling their bank, or because they did not recognize the rebill descriptor and assumed fraud. Every point of cancellation friction converts some percentage of would-be cancellations into disputes. Self-service cancellation, recognizable descriptors, and pre-billing reminders move those customers back into the refund-or-cancel lane where they cost you far less.

Visa · Consumer Disputes

Reason code 13.2: Cancelled Recurring Transaction

A recurring or installment charge was billed after the cardholder cancelled, attempted to cancel, or was never properly informed the billing would recur. It also covers charges after the issuer notified the merchant that the account was closed. For subscription businesses this is the flagship dispute code, and it is as much about disclosure and cancellation mechanics as about the charge itself.

Issuer filing window

120 days from the transaction processing date

Merchant response window

typically 20-30 days to respond, depending on the acquirer

Why 13.2 chargebacks happen

The customer cancelled through your site or support channel and a billing cycle ran anyway due to processing lag or a cancellation that never propagated.
The subscription terms were buried in fine print on a trial offer, so the customer never understood recurring billing was coming.
Cancellation was difficult enough, such as phone-only with long hold times, that the customer gave up and called their bank instead.
The customer emailed a cancellation request to an unmonitored inbox and considered it done.
Billing continued against an account the issuer had already flagged as closed.

How to fight a 13.2 chargeback

Produce the enrollment evidence: the signup flow showing clear recurring-billing disclosure, the checkbox or consent language, timestamp, and the terms presented at the point of sale.
Show the cancellation log, or its absence: if no cancellation request exists in any channel before the billing date, document your channels and the lack of contact.
Provide the usage record demonstrating the customer actively used the service during the billed period.
Present your billing reminder or pre-renewal notification if you send one, which undercuts the claim of surprise billing.
If the customer cancelled after the charge date, show the cancellation timestamp against the billing timestamp and your disclosed cutoff policy.
Refund and accept the case when your own records show a pre-billing cancellation attempt, because fighting a documented cancellation destroys credibility with your acquirer.

How to prevent 13.2 chargebacks

Disclose recurring terms conspicuously at checkout with the amount, frequency, and cancellation method stated before the payment button, per Visa's recurring transaction requirements.
Offer online self-service cancellation that takes effect immediately and generates a confirmation.
Send renewal reminders before billing, especially ahead of annual renewals and trial-to-paid conversions.
Process cancellation requests from every channel within one business day and honor requests received before the billing timestamp.
Use the account-updater and issuer notification signals to stop billing closed accounts.
Enroll in Rapid Dispute Resolution to auto-refund low-value subscription disputes before they become chargebacks.

Frequently asked questions

A customer cancelled the day after billing ran. Do I have to refund the charge?: You are not obligated to if the charge preceded the cancellation and your terms were properly disclosed, and a representment showing the timestamps typically wins. Whether you should is a different question: for a low-value rebill, refunding may be cheaper than a chargeback and better for the relationship. Many subscription merchants set an automatic grace-period refund policy for exactly this pattern.
How does Visa expect free trials that convert to paid subscriptions to work?: Visa's rules for trial and introductory offers require express informed consent to the recurring terms at enrollment, a reminder notification before the trial converts, clear descriptor identification, and a cancellation method at least as easy as signup, generally online. Merchants running trial funnels without these elements lose 13.2 disputes almost by default. Building them in also measurably cuts dispute volume, because surprise is what drives most of these cases.
Why do customers dispute instead of just cancelling?: Usually because cancelling looked harder than calling their bank, or because they did not recognize the rebill descriptor and assumed fraud. Every point of cancellation friction converts some percentage of would-be cancellations into disputes. Self-service cancellation, recognizable descriptors, and pre-billing reminders move those customers back into the refund-or-cancel lane where they cost you far less.

Related Visa codes