Chargeback Protection — Visa’s New Chargeback Dispute Procedure

May 19, 2023 | High Risk Merchant Account | Dustin

With the amount of credit card transaction disputes (commonly known as chargebacks) climbing out of control and with processing costs rising, Visa has introduced the Visa Claims Resolution (VCR) initiative as a form of chargeback protection. Effective as of April 2018, all disputes and chargebacks will be processed through the VCR dispute settlement process. By automating and simplifying the procedure, Visa expects to improve the efficiency of handling chargeback disputes and chargeback alerts.

Understand Visa’s Chargeback Protection Service for Merchants

Cut down the number of invalid chargeback disputes with Visa’s process which aims to reduce the amount of chargeback disputes to save retailers time and money.
Here are the highlights:

1. Issuer must offer information that is upfront. This procedure aims to help merchants understand the reason behind a chargeback dispute, so issuers will be asked to complete a chargeback dispute questionnaire with all the essential information, prior to when the chargeback dispute is initiated. Then, the questionnaire will be provided to all of the parties that are involved.

2. Reduced reaction times that will shorten chargeback timeframes from 45 days to 30 days.

3. Chargeback reason codes have changed — Visa’s 22 chargeback reason codes will be merged into client disputes — fraud, authorization, processing errors, and four guidelines. Depending upon the class, a retailer will have a swift way to offer evidence supporting the claim.

4. Visa will use merchant and client information to throw false chargeback claims out with chargeback alerts.

How to Prepare?

With the VCR procedure around the corner, there are several steps retailers may take to prepare:

1. Keep Detailed Records

You have to have extensive record on your hands as a form of chargeback protection, as you will have to submit detailed evidence to support your claim. Together, with the chargeback dispute procedure, you’ll have to be able to access the information. This means you will be generating chargeback responses faster than you ever had to previously. The responses should have evidence that follow Visa’s strict regulations and rules concerning fraud and consent chargeback disputes.

2. Prepare to Look Closer at Chargebacks

Visa will weed out chargebacks that are invalid, so be ready to manage more real chargeback disputes and chargeback alerts. To ensure the best possible result, you have to create time to manage chargeback disputes and pay attention to chargeback alerts. This means taking action immediately and treating every chargeback seriously. Someone in your business should be responsible for collecting and storing data which can be seen as soon as it’s needed.

3. Use a Chargeback Protection Program

Favorable fraud and real fraud are rampant. Merchants looking to stay need to have chargeback protection options in place. Merchants that fail to take chargeback protection seriously retailers will face cost increases, revenue declines, and business reputations.

4. Advantages of this VCR

VCR’s goal would be to cut down on chargeback disputes that are invalid while fulfilling the requirements of the payment market.
Advantages include:

• Decreased Chargeback Dispute Volume: Through Visa’s automatic tests, VCR can decrease chargeback dispute volumes by blocking bogus chargeback disputes entered into the computer system.
• A Proactive Settlement Process: Through a collection of new services and products, VCR enables merchants to take a proactive approach to resolve chargeback disputes. Merchants can identify trades, like credits, reversals, and alterations through transactions that are affiliated.
• Track and Monitor Chargeback Disputes: Indices provide Visa with mechanisms to proactively identify training opportunities or misuse, resulting in quicker troubleshooting and resolutions.
• Improved Customer Support: Quicker timelines offer a better customer experience and quicker resolutions. Visa found that, typically, it takes between 100 and 46 times to resolve a chargeback dispute. VCR is expected to reduce the time down.

Providing quick chargeback answers isn’t straightforward unless you have a strong understanding of the rules and regulations of Visa. By consolidating to a company like PayKings that offer payment processing, integrated payment gateway and eCommerce store into one place, as well as access to partnership companies that can simplify your company’s chargeback dispute management.