Chargeback Claims Resolution Getting Tougher



The new Visa Claims Resolution (VCR) initiative announced by Visa may be able to streamline transaction disputes, according to Chargebacks911, but the changes likely will have unanticipated implications for many merchants. Merchants should be prepared to dispute the majority of chargebacks or face financial consequences, and will need to maintain detailed transaction databases in order to supply evidence to Visa that can avert a chargeback.

“Merchants are facing major changes that will require more work and effort on their behalf,” says Monica Eaton-Cardone, cofounder and COO of Chargebacks911. “Similar to the implications merchants are experiencing as a result of MasterCard’s dispute administration fee, the new VCR initiative means that merchants will have to effectively represent each and every dispute to mitigate rising chargeback losses.”

Only 20 percent of merchants are ready to represent themselves, Eaton-Cardone notes, meaning some will only take action once fees and losses start to rise. A lack of recordkeeping standards, she adds, makes it challenging to present evidence in chargeback disputes; e-commerce marketers should be particularly concerned.

“Though Visa’s new VCR initiative is intended to remove friction from the chargeback process, this type of system cannot be truly effective without regulations and standards,” Eaton-Cardone says. “There is an urgent need for the payments industry to focus on compliance and address the current lack of standardization. I would advise all merchants to begin preparing for Visa’s enhanced dispute resolution process now.”