Visa Chargeback Rules

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Visa and Mastercard have separate chargeback rules that business owners must follow to avoid merchant account termination. These rules include how many chargebacks they can process each month without their acquirer terminating their merchant agreement as well as how to format documents when filing a chargeback retrieval. Since finding this information online may be difficult, Instabill has provided you with all of the information you will need to keep your Visa chargeback ratio at bay.

Visa Chargeback Ratio Thresholds

Visa places merchants in its Global Merchant Chargeback Monitoring Program (GMCMP) if they process more than 200 chargebacks per month as well as exceed a 2% chargeback ratio. However, according to the Visa International Operating Regulations, Visa may disqualify a merchant from using the Visa Program if he or she exceeds the 2% chargeback ratio threshold without having an effective chargeback reduction plan as well as reaching at least two of the following:

  • ✕  Chargeback ratio is two or more times the specified chargeback ratio in a single month
  • ✕  Processes 3,000 or more chargebacks in a single month
  • ✕  Assessed $1 million USD or more in Merchant Chargeback Monitoring Program fees

Once Visa has verified a merchant cannot participate in the Visa Program due to highly excessive chargebacks, the acquirer must terminate the merchant account and agreement by Visa's specified date.

Most Common Visa Chargeback Code

Between Visa and MasterCard, there are hundreds of chargeback reason codes. However, one Visa chargeback code is most common—Visa Chargeback Code 30: Services Not Provided or Merchandise Not Received.

There are two causes for Visa Chargeback Code 30. The most obvious explanation is that the cardholder did not receive the goods or services from his or her purchase. A less common explanation is that the merchant did not ship the goods as promised so the cardholder canceled the order, but the merchant still charged the cardholder. As an honest merchant, there are very simple ways to prevent chargebacks such as these.

  • ✓  Always deliver the goods or services purchased from you
  • ✓  Always ship your goods as promised on your website
  • ✓  If there is a delay in delivery, notify the cardholder as soon as possible

Visa Chargeback Retrievals

When filing a chargeback retrieval to dispute a claim, you will need to format your documents according to Visa's requirements. The document requirements are as follows:

  • 1. Documents must be in TIFF format
  • 2. Page sizes must be set to 8.5" by 14" (legal)
  • 3. File names must begin with the letter V, for Visa, followed by the pay ID# (V4293)

If you are submitting more than one chargeback retrieval document to Visa, you must name each file by adding an underscore and sequential numbers (e.g., V4293_1, V4293_2, V4293_3). You can read more about chargeback retrievals here.

Prevent Chargebacks with Instabill

When looking for a merchant account provider, you should consider the experience and involvement the company has in helping you prevent chargebacks. Instabill specializes in working with high risk merchants, including those who suffer from high chargeback ratios. We believe it is our duty to help merchants protect their credit card processing services, which is why we will provide you with the tools and education you need to make your business succeed.

To learn more about how you can apply for an Internet merchant account with Instabill, submit the sign up form to the right and one of our expert will contact you. We will walk you through the merchant account application process and get you up and processing in as quickly as one week.

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