Reduce chargebacks by optimizing your dispute management

For eCommerce merchants and their acquirers, effective post-transaction fraud and dispute management are critical to maintaining profitability and reducing risk. Resolving disputes before they become chargebacks can help you build positive customer relationships and brand reputation, while reducing the time, cost, and effort involved in managing chargebacks.

Resolving disputes before they become chargebacks can also help merchants and acquirers meet the requirements of the Visa Acquirer Management Program (VAMP), which aims to maintain security and prevent fraud in card-not-present (CNP) payments.

A customer who wants to return an item they bought in a store can go back in person. But for card-not-present (CNP) purchases, a customer who's dissatisfied with their purchase often bypasses the merchant and raises a dispute directly with their card issuer.

When this happens, the merchant loses visibility and control of the post-purchase experience. With no opportunity to deal directly with the customer's problem, they may only learn about the issue when a chargeback arrives. The typical manual processes for managing disputes and chargebacks can take a long time and significant effort to resolve, often leading to poor customer experience and the potential for reputational damage.

What's more, first-party misuse (also called friendly fraud) is one of the top reasons for disputes, but many cases stem from confusion. For example, the cardholder could forget about a purchase they made or not realize a family member had used their card to buy something online.

A fraud event or dispute could permanently affect a customer's future shopping behavior with a merchant. Clearly, managing post-purchase fraud and disputes makes good business sense—but it's also good risk practice.

The Visa Acquirer Management Program (VAMP) is designed to help protect everyone involved in the payment journey—acquirers, issuers, merchants, and consumers—from fraud. VAMP creates seamless controls and processes to build a more secure eCommerce environment for everyone by:

• Monitoring fraud, enumeration attacks (rapid, often automated, brute-force card testing attacks at scale), and dispute activity.
• Creating globally aligned fraud thresholds for both domestic and cross-border CNP transactions that provide clarity and consistency.
• Requiring acquirers, merchants, and other parties to apply risk controls and meet performance standards.

The program is based on the VAMP ratio: the sum of reported fraud (TC40 reports) and disputes/chargebacks (TC15 reports), divided by settled transactions (TC05 reports) in a month.

Acquirers and merchants whose VAMP ratio exceeds the threshold are required to implement additional risk mitigation control measures to bring their ratio back down. Disputes that are resolved before they become chargebacks are excluded from the VAMP ratio, so solutions that help you deflect and resolve disputes in the pre-dispute opportunity zone are key.

Verifi, a Visa solution, offers post-purchase solutions that can help you:

• Protect your revenue or resolve disputes without any further financial penalties.

• Remove account from the TC15 report—lowering your VAMP ratio.
• Reduce the time and monetary burdens of chargeback management.
• Enhance customer experience and increase trust through faster resolution, leading to fewer escalations.
  
   

Harnessing the power of data to promote transparency can help stop first-party misuse, fraud and disputes before chargebacks are triggered. Studies show that when you provide additional information to help cardholders recognize transactions, 65% of issuer calls can be resolved instantly ¹ —saving resources, reducing disputes, and strengthening customer trust. Verifi's Order Insight^® can help you provide these details in response to inquiries from issuers and their customers.

What does this look like? Issuers can integrate Order Insight data into their online and mobile banking apps and let their call centers access it through Visa Resolve Online (VROL). Cardholders simply click on a transaction to see the enhanced information immediately. Or if a cardholder calls to ask about a transaction, the agent can quickly pull up the enhanced data to help the customer recognize it.

Order Insight data can also be used for Fraud Dispute Deflection under Visa's Compelling Evidence 3.0 (CE3.0) core rules. This allows you to use a cardholder's purchase history to prove that a disputed transaction is legitimate, preventing first-party misuse.

If a dispute can't be deflected, there's still the opportunity for quick and easy resolution with Verifi solutions that  initiate cardholder credits before chargebacks are triggered:

Cardholder Dispute Resolution Network (CDRN) gives merchants 72 hours to initiate a cardholder credit to resolve a Visa or non-Visa dispute before a chargeback is filed. It’s useful for cases that need human review or if you want more control over how refunds are issued.

Rapid Dispute Resolution (RDR) lets you automatically resolve Visa disputes using a customizable decision engine that instantly credits a cardholder before a chargeback is initiated. This is ideal for eliminating disputes with low recovery rates.

The benefits to you include:

• Reduced operational requirements. Diverting low recovery rate cases into the pre-dispute channel optimizes workflows, reduces manual effort, and helps you focus your resources on the cases that matter.
• Less over-refunding. Cases resolved in the pre-dispute stage are not eligible to become a formal dispute—meaning fewer duplicate refunds and stronger protection against unnecessary loss.
• Increased dispute visibility. Clear reporting supports reconciliation, operational transparency, and better decision making.
• Lower dispute ratios. Pre-disputes resolved with credits are excluded from the VAMP ratio. If you’re dealing with a high ratio, the impact can be immediate and measurable.

A fast-paced online fashion retailer in Asia Pacific was struggling with up to 1,000 disputes a day. They wanted a way to resolve disputes quickly (before chargebacks were triggered), reduce their team’s workload, and maintain strong customer experience.

We helped them tailor RDR to their customer base and transaction patterns so that cases that meet all of these rules are automatically resolved with cardholder credit:

• The dispute category is 10 (fraud) or 13 (customer dispute).
• The transaction value is up to $20.
• The customer is a frequent shopper or account member.

This enabled them to resolve the most common, low risk disputes instantly—without manual intervention—and benefit from:

• A lower dispute ratio, as RDR-resolved cases never become chargebacks.
• Faster resolution for qualifying transactions, improving customer satisfaction.
• Operational efficiency, as their disputes team can focus on complex and higher-value cases.
• Stronger customer loyalty, as regular shoppers enjoy a friction-free experience.
  
   

Visa can help merchants and acquirers stay ahead, always by transforming their post-transaction fraud and dispute management into a smoother, more efficient process that protects revenues, reinforces customer trust, and supports compliance.

Learn more about how our post-purchase dispute solutions can help your business stay ahead of fraud.

^{1 Aite Report: Improving The Dispute Experience: Transparency Is Power, May 2020.
2 Deflection rate is dependent on merchants’ ability to store and respond with critical data within API SLA timeframes. Source: Verifi Internal Reporting, June 2023 to December 2023.}