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Visa Chargeback Resources Hub

Visa Chargeback Resources Hub

Here’s the rundown on what you need to know about Visa chargebacks. We cover how Visa chargebacks work, the fees assessed, Visa chargeback time limits, and much more.

How Visa Chargebacks Work: Fees, Time Limits, & More

How Payment Disputes Impact Both Merchants and Consumers

Visa is the top player in the payment card industry. There are over 4.3 billion Visa cards in circulation as of September 2023, with cardholders conducting more than 276 billion transactions on the Visa network annually.

However, numbers that high also create an irresistible target for fraudsters. Anticipating this, the US government created federal mandates to help protect consumers from becoming victims of credit card fraud.

These laws allow each card network to set its own specifics for the process. This can lead to confusion, though, as the rules, requirements, and terminology vary by brand. Contesting a Visa dispute, for example, is very different from fighting a Mastercard chargeback.

This guide explores the world of Visa chargeback rules. We’ll explain how Visa disputes work, when and how they should be challenged, and ways merchants can make the process work in their favor.

What is the Visa Chargeback Process?

Before we get into the weeds, it will be helpful to understand what happens at each stage of the Visa chargeback process. This is important because, as alluded to above, the Visa dispute process differs from that of other card networks like Mastercard and Discover.

Here’s how Visa disputes typically play out:

Cardholder Inquiry

Step 01 | Cardholder Inquiry

The cardholder detects a problem with a transaction. For example, they may not recognize the charge in question, or the charge was for the wrong amount. In response, the cardholder reaches out to the issuing bank.

Bank Consults Visa Resolve Online

Step 02 | Bank Consults Visa Resolve Online

The issuer uses the VROL platform to try and get more information about the transaction in question. Providing additional details may make it possible to resolve the cardholder’s inquiry without the need for a dispute.

Initial Dispute

Step 03 | Initial Dispute

If the case is considered valid, funds will be removed from the merchant’s bank account and a provisional credit will be issued to the cardholder. If the bank feels the case is unwarranted, the dispute is simply voided.

Dispute Response

Step 04 | Dispute Response

The merchant can respond to the dispute by acknowledging it was the result of fraud or merchant error. However, if they believe the dispute is invalid, the merchant can submit evidence supporting the legitimacy of the transaction (known as “representment”).

After the merchant provides their dispute response, the issuer will examine the documentation. If the evidence provided by the merchant is sufficient, the bank will overturn the dispute and refund the merchant. If the response is not valid, though, the dispute will proceed to the next stage.


Step 05 | Pre-Arbitration

The bank rejects the merchant’s dispute response. The issuer may do this if further evidence or argument is presented by the cardholder concerning the original dispute. This depends on the workflow through which the dispute is funneled.


Step 06 | Arbitration

This is the final stage of the dispute process. At this point, the case is submitted to Visa for a final review and decision. Visa examines all evidence provided by both parties before making a binding decision as to which party is liable for the transaction.

Is There a Fee for a Visa Chargeback?

In short, yes.

Chargeback fees are part of Visa's effort to incentivize merchants to handle transactions properly and resolve disputes. These fees are meant to recover costs associated with chargeback processing. They also encourage merchants to adopt practices that minimize disputes, such as clear communication with customers and detailed transaction records.

Some costs are imposed by Visa and are set by the network. Banks or processors can then levy other fees as they see fit. Visa doesn’t publish a comprehensive fee schedule; that said, typical chargeback fees are around $20 per dispute.

Multiple fees can be attached to each claim, and they add up quickly. For example, Visa chargeback costs can also include a $250 Technical Penalty in cases where the merchant violated Visa’s Merchant Agreement rules. All things considered, the costs of having Visa review a case can be as high as $500; appealing a ruling can cost $1,000 or more.

What are Visa Chargeback Reason Codes?

Chargeback reason codes are unique codes which card networks provide to indicate why a customer or bank initiated a chargeback or dispute against a transaction.

Visa reason codes are meant to tell merchants why a cardholder requested a Visa dispute. They can help clarify the specific reason for the dispute, such as fraud, unauthorized transactions, or goods not received.

Established chargeback reason codes do a good job of addressing processing errors, merchant fraud, and other “legitimate” reasons for filing a dispute. But, as research from Visa shows, more and more chargebacks are being filed for reasons that have little to do with the assigned chargeback code.

Learn more about Visa reason codes

Are There Time Limits on Visa Chargebacks?

Yes. The period allowed for cardholders to file Visa disputes is 120 days, in most cases. However, the time limit can be as few as 75 days depending on the situation and reason code.

Unlike consumers, banks and merchants don't get a lengthy time window for dispute responses. Merchants must respond within 20 days of the Central Site Business Date for each phase of the dispute process. Then, if either party wants to escalate a dispute to arbitration, they must do so within 10 days.

Also, remember that the acquirer acts as the middleman and has various responsibilities before and after the merchant’s involvement. To ensure they make their own deadlines, banks and processors may give the merchant as few as five days to prepare a response.

Learn more about Visa time limits

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How Many Visa Chargebacks Are Considered “Too Many”?

Visa chargeback thresholds are the formal chargeback limits placed on merchants by the card network. These thresholds are based on the merchant’s monthly chargeback ratio. This is a measure of how many of a merchant’s transactions resulted in disputes.

Visa chargeback ratios start with the number of chargebacks received in a single month. That figure is then divided by the total number of transactions in the same month:

This is a crucial indicator. Visa imposes strict limits on what is considered an “acceptable” chargeback ratio. For most merchants, the Visa chargeback threshold is a 0.9% chargeback ratio and 100 chargebacks per month. As we’ll explore in the next section, there can be serious consequences for violating this chargeback limit.

Learn more about Visa chargeback thresholds

Visa Chargeback & Fraud Compliance Programs

Merchants with excessive fraud or chargebacks represent higher risk, meaning they’ll have to work with a high-risk merchant account and/or processor. This translates to increased fees and stricter contracts. Failure to reduce their chargeback filings after the enforcement period ends could lead to account termination.

These consequences are not merely punitive. Visa is simply trying to protect their interests while mitigating risk to ensure consumer confidence. They also want to ensure that merchants’ sales tactics are ethical and that all methods and technologies are compliant with card network protocols.

Visa Dispute Monitoring Program

Visa requires banks to track chargeback activity and flag merchants who breach the thresholds outlined above. There are different limits for what the network considers standard, “early warning,” and “excessive” tiers. These standards are based on two criteria: chargeback ratio, and the total number of chargebacks received.

Monthly Threshold
Early Warning 0.65% chargeback ratio and 75 chargebacks
VDMP Standard 0.9% chargeback ratio and 100 chargebacks
VDMP Excessive 1.8% chargeback ratio and 1,000 chargebacks

If a merchant breaches Visa’s monthly chargeback threshold, they would be entered into the Visa Dispute Monitoring Program. The VDMP is designed to identify merchants whose chargeback ratios exceed the acceptable thresholds and gives Visa a way to help control dispute activity at the merchant level.

Learn more about VDMP

Visa Fraud Monitoring Program

The VFMP is similar to the VDMP. However, it applies only to disputes filed with a “fraud” reason code, like reason code 10.1 (EMV Liability Shift Counterfeit Fraud). As with the VDMP, there are three distinct tiers of the program:

Monthly Threshold
Early Warning $50,000 and 0.65% of sales value
VFMP Standard $75,000 and 0.9% of sales value
VFMP Excessive $250,000 and 1.8% of sales value

There are some exceptions and additional details to note here, including types of fraud reason codes considered, and the regions in which transactions are applicable. Check below for further information:

Learn more about VFMP

Visa Digital Goods Merchant Fraud Monitoring Program

Finally, there’s the Digital Goods Merchant Fraud Monitoring Program. This is an update to (and extension of) the VFMP, but aimed specifically at digital goods sellers. Whether or not the program is applicable to a specific merchant is determined by the merchant category code (MCC) in question.

Monthly Threshold
Early Warning USD 15,000 Fraud Amount and 150 Fraud Count and 0.45% Fraud Sales Ratio
DGMFM Standard USD 25,000 Fraud Amount and 300 Fraud Count and 0.9% Fraud Sales Ratio

Being sorted into either platform may involve implementing more stringent fraud detection tools, revising return policies, or improving customer service practices to prevent disputes. In severe cases, or if a merchant fails to lower their chargeback or fraud ratios below the thresholds, Visa may terminate the merchant's ability to accept Visa payments. This can have a significant impact on a business's operations and revenue.

Learn more about Visa Digital Goods FMP

Can You Fight Invalid Visa Chargebacks?

The short answer is “yes.” Keep in mind, however, that merchants should only fight back when they have a genuine reason to.

Merchants cannot challenge disputes that result from cases of fraud or obvious merchant error. However, data from Visa shows that roughly three out of four chargebacks issued by banks are probable cases of friendly fraud.

Merchants should challenge every Visa chargeback resulting from friendly fraud. This is done through a process called representment.

Merchants may refer to the Visa Chargeback Management Guide to identify the precise documentation required to contest the chargeback based on its reason code. The merchant can then compile relevant documents, prepare a comprehensive rebuttal letter, and send this package to their acquirer.

Learn more about representment

Successfully navigating the representment process can lead to the reversal of a Visa dispute or chargeback. Yet, if disputes escalate to Visa arbitration, merchants need to carefully assess whether the transaction amount justifies further action, as continued dispute efforts might lead to greater losses.

It's also crucial to note that chargeback fees will typically not be reimbursed, even if the merchant wins their case.

Learn more about Visa chargeback arbitration

Visa Rules Aimed at Stopping Disputes

Visa has an extensive body of rules governing the chargeback process.

These rules are aimed at minimizing disputes and streamlining the chargeback process. However, they’ve been compiled over the course of decades, and amount to literally hundreds of pages. Plus, new rule updates may be introduced every six months, making it difficult to keep up with changes.

Learn more about Visa chargeback rules

One notable change carried out in recent years was the Visa Claims Resolution (VCR) initiative. VCR involved the implementation of automated tools to speed up resolution times and filter out fraudulent chargebacks. This necessitated updates in terminology and procedure for all parties involved in Visa transactions.

This effort was directed towards reducing the traditional dispute resolution timeframe. Prior to VCR adoption, average chargeback resolution times could stretch to more than three months. After VCR, Visa aimed to reduce that to just 30 days​​.

Learn more about Visa Claims Resolution

Additionally, the Visa Purchase Return Authorization mandate requires merchants to obtain authorization for return transactions in a manner similar to purchase transactions. This change aims to make return processes as transparent and immediate as purchase authorizations, thereby reducing customer inquiries, enhancing transparency, lowering chargeback rates, and preventing double refunds​​.

Learn more about Visa Purchase Return Authorization

These new initiatives reflect the evolving nature of digital transactions and the ongoing efforts to ensure the ecosystem remains secure, transparent, and efficient for all stakeholders. Despite these advancements, challenges such as friendly fraud persist, underscoring the need for more comprehensive chargeback management strategies.

Compliance Note

Visa chargeback rules are subject to change at any time. This article reflects the most current information available at the time of writing. However, rule changes and updates happen on a regular basis. Merchants may consult the latest edition of the Visa Chargeback Guide to ensure compliance, or they can click here to speak with our experts on the subject.

What is Visa Resolve Online?

Visa Resolve Online (VROL) is Visa's proprietary online platform for dispute resolution.

The platform is designed to manage and streamline the process of handling disputes and chargebacks. It serves as a centralized network for transmitting and retrieving transaction data, documentation, and information during a dispute.

VROL is mandatory for all Visa issuers and acquirers to carry out a number of functions related to chargebacks. VROL is needed for responding to retrieval requests, transmitting documentation related to chargebacks, representment, and managing pre-arbitration and compliance cases. This system aims to simplify the dispute process and expedite resolution times by ensuring all relevant information is processed through a unified online platform​.

Learn more about Visa Resolve Online

Preventing Visa Chargebacks

Naturally, a merchant’s best bet is to prevent chargebacks before they happen. To that end, Visa provides several services for merchants and consumers aimed at de-escalating disputes before initiating the chargeback process. These include:

Order Insight

Order Insight

Enrolling in Order Insight gives merchants the power to answer inquiries in real-time. Automatic responses immediately provide shipping confirmation, cancellation number, or product name. This information — called a transaction inquiry response — often identifies whether a complaint is invalid or illegitimate.

Learn more about Visa Order Insight
Rapid Dispute Resolution

Rapid Dispute Resolution

RDR allows merchants to create rules and set parameters that dictate which disputes they’d like to automatically accept and provide funds back to the cardholder, thereby preventing a chargeback for these transactions at the pre-dispute stage. In effect it allows issuers and acquirers to resolve disputes automatically, which keeps merchant chargeback rates low and customer satisfaction high.

Learn more about Visa Rapid Dispute Resolution
Rapid Dispute Resolution

Compelling Evidence 3.0

CE3.0 provides a standardized framework for all parties involved in the chargeback process. It enables merchants to substantiate claims by sharing real-time information. Using the tool, merchants can prevent a significant number of disputes that would be filed using Visa reason code 10.4.

Learn more about Compelling Evidence 3.0

The Bottom Line

Of course, any of the resolution platforms above can help stop disputes. But, they can’t stop every Visa chargeback.

When it comes to friendly fraud in particular, merchants will need to formulate a multilayered strategy to deal with fraud and chargebacks effectively. Merchants can approach chargeback prevention in two ways:

Appoint an in-house chargeback manager to learn and understand the latest trends, regulations, and chargeback threats; or

Outsource to a third-party professional.

Using in-house resources may seem more cost-effective. However, most merchants find that outsourced chargeback management is more efficient, produces better results, and offers higher return on investment.

True chargeback professionals have the knowledge, resources, and industry relationships necessary to stay on top of ever-changing threats and updated regulations. They’ll also bring the experience to handle disputes quickly and efficiently.

The experts at Chargebacks911® have been helping merchants manage chargebacks for over a decade. If you’re struggling with chargebacks from Visa or any other source, we can help you lower your ratio and increase your ROI. For a free demo, contact us today.


How does a Visa chargeback work?

A Visa chargeback occurs when a cardholder disputes a Visa transaction with their bank, prompting the bank to reverse the charge. This process aims to protect consumers from unauthorized transactions and resolve disputes between cardholders and merchants.

How successful is a Visa chargeback?

The success of a Visa chargeback depends on the legitimacy of the dispute and the evidence provided. It involves a formal process by which banks, as well asVisa, may review the case to decide if the chargeback is warranted.

What qualifies for a chargeback?

Qualifications for a chargeback include unauthorized transactions, billing errors, undelivered goods or services, and items received not as described. It’s a protective measure for consumers against fraudulent or disputable credit card charges.

Does Visa charge for chargebacks?

Cardholders do not have to pay for filing a chargeback. That said, Visa may impose fees on merchants for chargebacks intended to cover administrative costs associated with processing disputes. These fees vary based on the merchant's acquiring bank and the specifics of each case.

How long does a Visa chargeback take?

The Visa chargeback process can take anywhere from a few hours to 120 days, depending on the complexity of the dispute and the timeliness of the documentation submitted by all parties involved.

What is the minimum amount for a Visa chargeback?

Visa does not specify a minimum amount for initiating a chargeback. They allow cardholders to dispute transactions of any amount if they meet the qualifications for a chargeback, such as unauthorized charges or issues with the product or service provided.

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