Report: Visa Claims Resolution Program Effective in Reducing Chargebacks, Fraud

In 2018, Visa introduced its new claims resolution program (VCR) for merchants that process credit card transactions. The new mandates established a new global policy for disputed charges designed to streamline the dispute process, reduce and prevent invalid dispute claims, and speed up resolution of disputes.

Since its introduction, the results of VCR haven't been made public, though most merchants we talked to said the program has created a significant reduction in chargebacks. In a new whitepaper, Chargeback Gurus unveiled the results from a survey of hundreds of merchants about how the new VCR program is affecting their businesses.

The survey found that 78 percent of merchants saw a reduction in chargeback claims that could prove costly for their businesses. Eighteen percent of merchants reported seeing an increase in chargeback claims, while 4 percent saw no change in chargeback claims. Those that reported a reduction in chargebacks also said there was as much as an 18 percent reduction in chargeback volume, including a 13 percent reduction in bogus fraud claim disputes.

The survey also indicated that a majority of merchants polled found that overall, the VCR mandates have had no impact on their businesses. In fact, 31 percent said it had a negative effect, while only 15 percent said the VCR process had a positive effect on their business.

The survey of our global customer base also found that the new VCR program helped to reduce the chargeback resolution cycle to 30 days or less. Previous cases took up to 60 days. The VCR program also consolidated chargeback reason codes, which has led to a better dispute response.

Challenges of the VCR program, reported by merchants, include:

• time to dispute chargebacks increased due to change in dispute workflow;
• win rate was low after VCR;
• merchants are unable to dispute chargebacks for transactions with AVS/CVV mismatch; and
• requirement to acknowledge chargebacks increased overall costs and time spent.

These results told us that while the VCR program is effective in mitigating chargebacks, including fraudulent claims, the additional reporting requirements of the VCR mandates has caused merchants to invest more time and resources into support of them. Having chargebacks reduced shows that the VCR program is a success that merchants feel every day. This benefit helps to outweigh the additional regulatory burden.

Chargeback Gurus is monitoring the continued implementation of the VCR program and is working closely with Visa and our global customer base to help ensure merchants are educated about how to leverage the program to help mitigate chargebacks and fraud.

Our new whitepaper, Visa Claims Resolution: The Impact of VCR on eCommerce and Card Not Present Merchant, provides a road map for businesses on how to adjust to Visa’s new requirements and best practices in handling chargeback disputes.

Suresh Dakshina is the president of Chargeback Gurus, a company that helps online merchants like you fight back against costly, time-consuming chargebacks.