Visa are introducing new chargeback rules. Here's what you need to know.
CHANGES TO CHARGEBACK DISPUTE PROCESSING
Visa is introducing new chargeback rules for all merchants, cardholders and banks. The new rules will ensure that chargeback processes are applied consistently all over the world.
- Automated dispute decisions. Card schemes including Visa and MasterCard, outline which chargebacks are automated and which can be disputed. The changes mean some chargebacks with a fraud or authorisation reason code will be automated and the chargeback will be debited from the merchant's bank account.
- Fewer invalid customer chargebacks. If a chargeback doesn’t meet the necessary criteria as outlined by the schemes, the chargeback will be declined and returned to the cardholder’s bank. Merchants can expect to see a reduction in invalid chargebacks disputes initiated by cardholders.
Under the new chargeback process, schemes will automatically determine if a chargeback is valid or not. If the chargeback is invalid, it will be returned to the cardholder’s bank – and merchants won’t need to do anything. This means merchants may receive fewer invalid chargeback disputes in future.
In some circumstances, merchants will still be able to dispute a chargeback. Schemes outline which chargebacks are automatic and which ones merchants can dispute. Some processing error or consumer dispute chargebacks can be disputed.
If merchants dispute a chargeback, they will need to provide documentary evidence to support their claim. If merchants haven’t provided satisfactory evidence, the dispute may become an automatic chargeback, and their account will be debited.
To reduce the risk of chargebacks caused by customer disputes, it’s important merchants keep detailed transaction records showing that each cardholder has received the goods or services they’ve paid for. This may include signed and imprinted sales receipts and any other relevant sales information.