Understanding Visa Chargebacks & Disputes: The 2025 Merchant Guide

As more merchants accept credit cards in today’s digital society, the occurrence of Visa chargebacks continues to increase. Visa remains to be one of the most influential credit card networks within the United States and the rest of the world. In fact, at the end of 2021, Visa market share was the largest, at about 48 percent, based on the number of credit cards in circulation (753 million).

Considering there are four major card networks in the United States—Visa, Mastercard, American Express, and Discover—there’s no doubt that Visa is a popular choice among American consumers.

Businesses accepting payments widely benefit from the usage of Visa credit and debit cards. However, as with all credit card payments, Visa credit card payments come with a variety of challenges for merchants. One of the largest obstacles is the likelihood of Visa chargebacks resulting from a cardholder disputing a charge and requesting a return of payment. Chargebacks produce processing fee penalties, a drain on business resources, and the potential for merchant account termination.

Navigating the Visa chargeback landscape effectively remains critical for any business owner who wants to protect their bottom line. While chargebacks can create nightmare situations for merchants, developing strong business practices and other chargeback prevention strategies can significantly diminish their chargeback risk.

This guide explores Visa chargebacks—how they impact businesses, the Visa dispute categories, the Visa chargeback rules, and other related topics. Now, let’s get started stopping Visa chargebacks!

What Is a Visa Chargeback?

The term “Visa chargeback” refers to chargebacks raised by Visa cardholders. If a cardholder wants their money back—whether due to fraudulent use of their card, poor-quality products, or any other reason—they may file a chargeback with their credit card issuer to recover losses.

While seemingly straightforward, this can lead to problems for merchants. Not only may a chargeback end in a refund to the customer, but it can also result in chargeback penalty fees, increased processing fees, and merchant account restrictions. In fact, too many chargebacks may result in the termination of your merchant account.

So, do Visa chargebacks differ from other types of chargebacks? Yes, each credit card network has its own chargeback process, reason codes, and other differentiating details. It’s beneficial for merchants to understand the unique chargeback processes for each credit card network. And in many cases, chargebacks may be fraudulent, meaning your business has the right to dispute them. By understanding Visa chargebacks, favorable chargeback dispute resolutions are more attainable for your business, which can lower your chargeback ratio.

Why Visa accepts chargebacks

The Fair Credit Billing Act requires all United States credit card networks to offer chargebacks to consumers. Passed in 1974, this law sought to encourage consumers to use credit cards without fear of losing money. Before chargebacks, a consumer might have been liable for charges if their credit card was stolen. With chargebacks, consumers are reimbursed for lost funds if they plead a compelling case. While inconvenient for merchants and payment processors, the chargeback system benefits Visa by encouraging credit card usage.

The Fair Credit Billing Act outlines the minimum recourse that must be provided to credit card holders. However, each card network has its own rules and limitations within the scope of the law. For example, while the Fair Credit Billing Act requires card networks to provide a minimum of 60 days for customers to dispute charges, Visa offers 120 days for its cardholders to dispute charges.

Visa Dispute Categories

Visa divides chargebacks into four distinct categories: fraud, authorization, processing errors, and consumer disputes. Below explores each category in more detail.

The fraud dispute category is comprised of any dispute in which fraud is the alleged culprit. This may include EMV liability shift counterfeit fraud, card-present fraud, card-not-present fraud, and other fraud-related issues.

Next, the authorization chargeback category is related to any transactions occurring without proper authorization. This may include card recovery bulletin issues, declined authorization issues, and “no authorization” issues.

The processing error category refers to various processing issues such as invalid data, late presentment, incorrect transaction codes, and incorrect currencies.

This category refers to any issues raised by consumers. Examples of consumer dispute chargebacks include misrepresentation, credit not processed, canceled merchandise or services, original credit transaction not accepted, counterfeit merchandise, return issues, etc.

When Do Banks Issue Visa Chargebacks?

Issuing banks authorize Visa chargebacks once they’ve deemed the customer’s dispute as accurate. As discussed, chargebacks may be issued for four different reasons. However, just because your customer files a chargeback doesn’t mean you need to accept it. You can dispute the issue with evidence if you believe a customer’s chargeback isn’t correct.

Visa Chargeback Rules, Compliance, and Representment

Visa chargebacks adhere to strict rules, making it easy for merchants, customers, and other stakeholders to understand the process. For the Visa compliance process to proceed, the issue must meet the following four conditions:

• The issue must be related to the breaking of Visa’s core rules and Visa’s product and service rules.
• The member suffered a financial loss due to the broken rules.
• The member’s financial loss wouldn’t have occurred if it weren’t for the breaking of Visa’s core rules and product and service rules.
• The issue isn’t covered by a traditional dispute process.

Visa Representment

Representment refers to a merchant’s ability to dispute a chargeback. This process allows merchants to fight back against “friendly fraud” and other incorrect chargebacks. Merchants have representment rights for all types of Visa chargebacks. So, if you believe a chargeback seems fraudulent, you can definitely fight it! However, you must respond to a Visa chargeback within 30 days if you want to dispute it, and you must provide a rebuttal letter and evidence to prove your case.

Visa Copy Requests

A copy request—sometimes referred to as a “retrieval request”—occurs when a card issuer contacts an acquiring bank seeking information about a transaction. In many cases, the acquirer forwards the required information to the card issuer to resolve the problem. In the event the acquirer does not have the information, they forward the request to the merchant. The merchant then provides the transaction details or other necessary information to appease the copy request.

Keep in mind that although a copy request isn’t a chargeback, it may indicate a future chargeback. Responding to copy requests with the correct information reduces the chances of a transaction turning into a chargeback.

Visa Dispute Limits

As with all credit card networks, Visa has chargeback limits to avoid partnering with merchants who have excessive chargeback ratios. Chargebacks can indicate fraud or subpar business practices, both of which Visa aims to avoid to protect its cardholders and financial interests.

Let’s look at the chargeback limits associated with Visa’s risk categories for merchants:

• Early Warning: Reaching a chargeback ratio of 0.65% with at least 75 total disputes
• Standard Threshold: Reaching a chargeback ratio of 0.9% with at least 100 total disputes
• High-Risk (Excessive): Reaching a chargeback ratio of 1.8% with at least 1,000 total disputes

Make sure to keep your business’s chargeback rates within healthy thresholds if you want to avoid the penalties associated with high chargeback rates. Once you go over the excessive amount and Visa views servicing your business as increasing its financial exposure, the card network can put you on a prohibited merchants list, such as the MATCH list, banning you from accepting their cards.

Visa Chargeback Time Limits

As previously mentioned, the Fair Credit Billing Act dictates cardholders must have at least 60 days from the purchase date to file a chargeback. However, in most instances, Visa allows cardholders up to 120 days to file disputes. Although, some niche disputes have smaller timeframes.

Other time restrictions are also relevant to merchants and customers. With Visa chargebacks, merchants must respond to the chargeback within 30 days—this applies to each phase aside from arbitration. If either the customer or the merchant elects arbitration, they must do so within ten days after the last phase.

Compelling Evidence Requirements for Visa Disputes

If a customer files a chargeback against your business, you need compelling evidence to overturn it during the dispute process. So, what constitutes compelling evidence? The answer depends on the individual situation, meaning you need to provide custom responses to chargebacks if you want to win the dispute.

Let’s explore some examples of the evidentiary requirements for Visa chargeback disputes:

• If a customer purchases a digital good or service, you may include network data showing the customer downloaded or used the product. You can include details such as I.P. addresses, location information, and more.
• If a customer disputes a charge for a delivered product, you may include shipping information like tracking details, package delivery signature, etc.
• If a customer disputes a charge for a ticket, you may include information such as evidence the ticket was scanned or redeemed.
• Any communication between you and a customer regarding the goods or services, such as email, texts, and live chats.
• Photographs proving the delivery of the good or service.
• Signed documents indicating a customer received the good or service.

The above examples are just the tip of the iceberg. It’s important to include as much relevant information as possible to dispute a Visa chargeback.

Visa Chargeback Reason Codes

When a customer files a chargeback, the merchant receives a notification with an applicable chargeback reason code. This alphanumeric code corresponds with the specific reason behind the chargeback, such as card-not-present fraud, incorrect currency, misrepresentation, or any other chargeback-eligible issue. For a more detailed explanation, as well as a list of Visa’s individual codes, please refer to our guide on chargeback reason codes.

How to Prevent Visa Disputes

Preventing Visa disputes requires similar efforts to preventing chargebacks in general. Firstly, your business must invest time in developing a chargeback prevention strategy and incorporate procedures to minimize your exposure to payment disputes. Let’s explore a few tips to help your business avoid Visa chargebacks, as well as the general occurrence of chargebacks:

Product descriptions must include accurate information. If you sell a product or service and its description didn’t provide an accurate representation of its features, a customer has the right to file a chargeback.

If you have a holding company with a different name than your business’s trading name, ensure your business lists its trading name in its billing description. If you don’t clarify this, it could lead to customers not recognizing your charge on their statement, which could turn into a chargeback.

While accepting credit card payments online exposes merchants to fraudulent card-not-present transactions, many tools can help businesses avoid fraud. Basic signature panel code verification, address verification, and two-factor authentication are excellent ways to protect your security. Unfortunately, more advanced fraudsters can find ways around these security features. Implementing a digital fraud prevention tool can significantly help prevent fraudulent chargebacks before they happen.

Managing customer expectations for shipping and returns plays a crucial role in avoiding chargebacks. For example, if a customer thinks their package should have been delivered to them already, they may file a chargeback saying it wasn’t delivered.

Likewise, clear return policies ensure customers don’t feel ripped off when attempting to return an item. A lack of precise return details may result in customers using chargebacks for refunds to spite your return policies.

If a customer has an issue with a product or service, they will likely attempt to contact your business before they speak to their bank. This means there’s still time to resolve any problems before they turn into chargebacks! Make sure your contact details are easy to identify and your customers have quick access to support to resolve any issues. Not doing so can result in customers contacting their bank about minor issues, resulting in unnecessary chargebacks.

Lastly, always maintain robust records to ensure your business has evidence to combat fraudulent chargebacks. Customers may attempt to claim purchases goods never arrived or someone else was in possession of their credit card. By retaining shipping tracking numbers, payment details, and security footage, your business will have data to present in the chargeback dispute process.

What Is the Visa Fraud Monitoring Program (VFMP)?

The Visa Fraud Monitoring Program (VFMP) is another fraud monitoring program that helps merchants reduce their fraud exposure. The VFMP has the same tolerance thresholds found in other Visa limits: Early Warning, Standard Level, and Excessive Level. For Early Warning, it starts at a rate of 0.65% and Visa notifies merchants they are at risk of entering the program if they don’t change their course. Once you reach a 0.9% chargeback rate, you’re enrolled in the Standard Level. Exceeding a 1.8% rate results in entry to the Excessive Level. There are also some fraudulent monetary value requirements for each category.

You can receive up to $75,000 in fines for excessive fraudulent payments, so this program must be taken seriously if you want to protect your business. Below lists the fees associated with the number of months in each program.

Note: If you remain in the Standard Level or Excessive Level for more than 12 months, Visa may remove your right to process Visa payments.

What’s the difference between the Visa Fraud Monitoring Program and the Visa Dispute Monitoring Program?

The Visa Dispute Monitoring Program (VDMP) and Visa Fraud Monitoring Program (VFMP) are the two monitoring programs Visa uses to track and penalize merchants with poor processing records. Both issue fines and other penalties to merchants with excessive fraud or payment disputes. The primary difference is VDMP tracks chargebacks, while VFMP is related to fraud.

What Is Visa Merchant Purchase Inquiry (VMPI)?

The Visa Merchant Purchase Inquiry (VMPI) tool helps merchants avoid unnecessary chargebacks by sending real-time data to Visa. Once integrated with the VMPI system, your business sends data such as order and product details directly to the card network, preventing some chargebacks from taking place. If you want to avoid the Visa Dispute Monitoring Program and Visa Fraud Monitoring Program, using VMPI can help!

Visa Chargebacks: Final Thoughts

Understanding Visa chargebacks remains critical for business owners in the United States, as your business cannot afford to suffer the consequences of too many Visa chargebacks. Being that Visa accounts for nearly half of the credit card market, losing your ability to accept Visa credit cards is akin to losing your ability to accept nearly half of your customers’ preferred credit cards. However, when you implement the tips in this guide and utilize effective chargeback prevention management, you can avoid the unnecessary losses associated with excessive chargebacks!

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