Short story.

We processed a chargeback claim for an individual who did not receive merchandise - a merchant dispute. In the end, the merchant sent us back a response that they had sent the client's order to the address we have on file for our client. They included a USPS tracking number that showed merchandise delivered to an address within the same city and zip code with time and date.

The client still insists they did not receive the merchandise but has provided no additional evidence to prove their case. We, therefore, cannot decline the merchant's response and keep the chargeback credit we were initially given.

All that out of the way, is there anything in the Visa rules that clearly states who is liable for the charges in this situation? We feel the client should be liable for the charge since the merchant has evidence showing product delivered but we are not 100% sure and try as I might, Google searching chargeback rules is proving a little difficult. I'm not hitting the right keywords to find my intended result.

VISA includes their chargback rules in their overall VISA Core Rules

To represent a transaction, the merchant must provide one of the following:

A credit or Reversal issued by the Merchant was not addressed by the Issuer in the Dispute
The Dispute is invalid
The Cardholder no longer disputes the Transaction
Documentation to prove that the Cardholder or an authorized person received the merchandise or services at the agreed location or by the agreed date/time
For an Airline Transaction, evidence showing that the name is included in the manifest for the departed flight and it matches the name provided on the purchased itinerary
Compelling Evidence

Under compelling evidence, VISA rules state the following: For a Card-Absent Environment Transaction in which the merchandise is delivered, evidence that the item was delivered to the same physical address for which the Merchant received an AVS match of Y or M. A signature is not required as evidence of delivery.

You are correct, this dispute is now between your client and the merchant. There is no reason to submit a pre-arbitration to VISA.