The 2025 Visa Chargebacks Guide

Table of Contents

1. What Is a Chargeback?
2. Why Does Visa Accept Chargebacks?
3. Visa Dispute Categories
4. How to Prevent Visa Disputes
5. Common Visa Reason Codes
6. Compelling Evidence for Visa Disputes
7. Visa's Pre-Arbitration Process
8. What Merchants Should Know About Visa Disputes

Visa processes billions of transactions each year, making it the most widely used credit card network in the world. For merchants, this means that a large share of chargebacks will likely come from Visa cardholders. Each of these disputes follows a strict set of rules and deadlines that merchants are expected to follow if they want to recover revenue and avoid unnecessary losses.

Chargebacks can lead to financial losses, operational headaches, and potential threats to a merchant’s processing privileges. Understanding how Visa’s dispute process works is the first step to limiting those risks. This guide breaks down the key elements of Visa chargebacks, from dispute categories and reason codes to the evidence merchants need to fight back.

What Is a Chargeback?

When a cardholder disputes a charge with their issuing bank, the bank may file a chargeback. Visa officially refers to chargebacks as disputes, but these terms are typically used interchangeably. When a chargeback occurs, the bank debits the transaction amount from the merchant and gives the cardholder a temporary credit.

The merchant will also be assessed a chargeback fee. The amount of the fee is set by the merchant's agreement with their processor. Merchants in high-risk industries often pay higher chargeback fees, although fees also vary significantly from one processor to another.

Each chargeback is assigned a reason code that explains the justification for the chargeback. Visa groups its various reason codes into several broad dispute categories.

Visa’s rules allow merchants to fight chargebacks by presenting the charge a second time along with evidence supporting its legitimacy. This process is called representment. If the issuer accepts the merchant’s evidence, they will reverse the chargeback.

Why Does Visa Accept Chargebacks?

All US credit cards are required by the Fair Credit Billing Act to provide a process for cardholders to dispute fraudulent or incorrect charges. The process must fulfill certain legal requirements, but most of the details are left up to the card network.

The Fair Credit Billing Act, which became federal law in the United States in 1974, was created to address consumer concerns about a new financial product: The credit card.

The purpose of the FCBA was to protect cardholders from fraud and unfair billing practices. Among other reforms, the legislation granted cardholders the right to dispute fraudulent or incorrect transactions.

There are some specifics in the FCBA—for example, it establishes 60 days as the minimum window during which cardholders must be allowed to dispute a charge—but for the most part, it allows card networks and issuing banks to create their own procedures for handling chargebacks.

The existence of chargebacks allows cardholders to feel more confident about making purchases with their credit cards, knowing that they won’t be held responsible for the actions of identity thieves, deceptive merchants, and other fraudsters.

However, the chargeback process also has loopholes that can be exploited, allowing cardholders to commit so-called “friendly fraud,” when they obtain a chargeback by making false claims, sometimes unknowingly, but often intentionally.

Note that debit card chargebacks are governed by a different piece of legislation: The Electronic Fund Transfer Act of 1978. Debit chargebacks may have different deadlines, liabilities, and rules.

Visa Dispute Categories

Visa specifies four dispute categories that encompass its various chargeback reason codes: Fraud, Authorization, Processing Errors, and Consumer Disputes.

Category 10: Fraud

This includes transactions where an available EMV chip was not used for authorization, where stolen payment card credentials were used in a card-present or card-not-present environment, and transactions flagged by the Visa Fraud Monitoring Program.

Category 11: Authorization

Disputes in this category include transactions processed without authorization, with a declined authorization, or where a Card Recovery Bulletin was ignored.

Category 12: Processing Errors

Processing error disputes can include late presentments; incorrect transaction codes, currencies, account numbers, or accounts; duplicate processing, duplicate payments involving payment by other means; and transactions containing invalid data.

Category 13: Consumer Disputes

This category tends to deal with issues that can crop up between the customer and the merchant, such as merchandise or services not received, recurring transactions that the cardholder attempted to cancel, merchandise that is counterfeit or defective, merchandise that does not match the product description, failure to process a refund credit, and other merchant misrepresentations.

How to Prevent Visa Disputes

Merchants can prevent Visa disputes by using a clear and recognizable billing descriptor, offering helpful and available customer service, and using effective fraud prevention tools.

When it comes to figuring out the reasons you're receiving chargebacks, Visa or otherwise, the best place to start is by looking up the reason codes on those chargebacks, which can be done using our handy lookup tool.

By looking up the reason code assigned to each chargeback, merchants can understand the general outline of the cardholder’s claim. This will help you determine the validity of the chargeback and how to fight it if it's invalid. If you have compelling evidence to disprove the customer's claim as outlined by the reason code, you can often win the dispute and recover your revenue.

Whether the customer's claim is true or false, however, it's still important to try to understand the reasons behind each individual dispute.

Understanding the Root Causes of Disputes

For true claims, the reason code can provide some general information, but you'll still want to dive into the specifics to know exactly why the chargeback happened.

For false claims, of course, the reason code isn't telling you the real reason the customer disputed the charge. To understand the specific causes behind each chargeback, you must carefully examine the transaction details, any interactions with the customer, and any business practices that could be a contributing factor.

For example, misleading marketing is a frequent cause of chargebacks. Some merchants make big claims and promises in their sales and marketing materials that their products can’t really live up to.

While being dissatisfied with a product isn't a legitimate reason for filing a chargeback, many customers will do so regardless, and since the line between simple dissatisfaction and "item not as described" is a fuzzy one, banks will often err on the side of the customer and allow the chargeback to go through.

Of course, if the item is actually not as described in your marketing material, the customer has a legitimate reason to file a chargeback, and that's a dispute you're unlikely to win.

Some cardholders will file a chargeback when they see a transaction they don’t recognize on their account statement. This is often the case when merchants use descriptors that do not match their branding or business name.

To make sure you're not receiving chargebacks for this reason, search online for your merchant descriptor and make sure your business is the first result. A good merchant descriptor should also include a customer service phone number the customer can call if they're confused about the transaction.

Chargebacks also frequently occur when cardholders feel that they have tried to resolve an issue with the merchant, but the merchant is stonewalling them. While the merchant may feel that they have a justifiable reason for a slow or unsatisfactory response, attentive customer service and a generous refund policy can go a long way toward preventing these chargebacks.

True fraud chargebacks occur when a fraudster obtains credit card payment credentials, either by stealing them directly or by acquiring numbers harvested from data breaches on the black market, and uses them to make purchases. True fraud chargebacks cannot be fought and are difficult to prevent, but anti-fraud tools and rigorous security protocols can work to reduce them.

Authorization and processing chargebacks are often caused by merchants following outdated or incorrect procedures. Reviewing and updating these processes should eliminate these chargebacks, provided you can identify the specific errors causing them.

10.4 Other Fraud—Card Absent Environment

This indicates that the cardholder has claimed that they did not authorize or participate in a card-not-present transaction processed by the merchant. This is the classic case of true fraud in e-commerce, where a fraudster uses a stolen card to purchase something for their own benefit.

This is also a common friendly fraud reason code, especially when the cardholder doesn’t recognize the transaction on their statement.

12.5 Incorrect Amount

If the cardholder believes that the amount they were charged was not what they agreed to pay, their dispute will be filed under this reason code. This can occur due to number transposition or other data errors when the transaction is entered for processing, or it may result from a misunderstanding about fees or taxes included in the final price.

12.6.1 Duplicate Processing

Here, the cardholder is claiming that a single transaction was processed twice, resulting in a double charge to their account.

13.1 Merchandise/Service Not Received

Many situations can result in this frequently-encountered chargeback. They can occur when the merchant or carrier really does fail to deliver the product to the cardholder, but also when goods are not shipped by the delivery date given, or when the merchant bills the cardholder before shipping the merchandise.

Poor communication between the merchant and cardholder about shipping and delivery times, including any delays, often leads to this kind of chargeback.

13.2 Canceled Recurring Transaction

If a merchant processes a recurring billing transaction after the cardholder’s subscription has been canceled, the cardholder can dispute the transaction under this reason code. Merchants must always be careful to cease billing immediately when a customer terminates a subscription.

13.3 Not as Described or Defective Merchandise/Services

To meet the criteria for this reason code, the cardholder will have to state that the merchandise or services they received did not match the description provided by the merchant, or that merchandise was damaged or defective upon arrival.

These disputes can get into highly subjective territory when cardholders cite the quality of the merchandise as the justification for the chargeback.

Unfortunately, some merchants set themselves up for these chargebacks by making grandiose claims about their products that they’re not actually able to fulfill.

13.6 Credit Not Processed

Cardholders file these chargebacks when a refund credit or voided transaction receipt has not been processed by the merchant. These chargebacks can easily be avoided by processing credits promptly, as soon as possible after the cardholder has been notified that a refund will be given.

13.7 Canceled Merchandise/Services

Similar to the previous reason code, this occurs when a cardholder cancels services or returns a product and does not receive a refund that they understand to be due. Once again, this is easily avoided by quickly issuing refunds, but it can also happen when a merchant has not adequately communicated their refund policy to the cardholder.

Here are some examples of evidence a merchant may want to submit, depending on the reason code for the chargeback:

• Photographs, emails, or other evidence that the cardholder has received or is using the goods or services they purchased.
  
  
• In situations where purchased goods were to be picked up from the merchant’s location: A signature, copy of identification, or other identifying information provided by the cardholder at the time of pickup.
  
  
• If the purchased goods were shipped to the cardholder: Documentation from the carrier confirming that the merchandise was delivered to the cardholder at an address that matches the billing address on the card.
  
  
• For digital goods: Network or server data that proves the cardholder downloaded the product or logged in to use it. This can include the cardholder’s IP address and location data, information about the device used, confirmation that the cardholder has a verified customer profile on the merchant’s site, proof that the cardholder accessed digital goods or services through that profile after the transaction date, and transaction data showing that the cardholder has made previous, undisputed transactions with the merchant.
  
  
• When purchased goods are shipped to a business address: Proof that the cardholder was employed at that address at the time of delivery.
  
  
• For transportation-related transactions, including Travel & Expense: Proof that the ticket was received at the cardholder’s billing address, proof that the ticket or boarding passed was scanned, evidence that the cardholder earned or redeemed frequent flier miles related to the transaction, or evidence of subsequent related transactions such as seat upgrades or onboard meals.
  
  
• For airline transactions: Documentation of the cardholder’s name on both the purchased itinerary and the departed flight manifest.

Visa's Pre-Arbitration Process

Even when a merchant submits compelling evidence during representment, a chargeback case isn’t always closed. If new information comes to light, the dispute can move into Visa’s pre-arbitration process. Merchants need to understand how this phase works, as it can have significant financial and operational consequences.

For non-fraud Visa disputes, pre-arbitration occurs when the issuing bank re-opens a case that was decided in the merchant's favor. Fraud-related disputes follow a shorter process, where the merchant is considered to be initiating pre-arbitration when they first file representment.

Visa rules allow merchants to pre-arbitration filings. However, time limits apply, and the response needs to address the specific reason the pre-arbitration was initiated.

When a merchant receives notice of pre-arbitration, they have two options:

1. Accept Liability
   The merchant agrees to take responsibility for the chargeback amount. No further action is needed, and the case ends there. While this may seem like a concession, it can often be the best choice if the potential losses outweigh the benefits. Considering the high cost of arbitration, this is frequently true.

2. Challenge and Proceed to Arbitration
   If the merchant maintains that the transaction was valid and has sufficient evidence to back up their claim, they can contest the pre-arbitration. This escalates the case to arbitration, where Visa will make the final decision.

Visa arbitration isn’t without risk. Arbitration fees, paid by the losing party, typically run several hundred dollars per case. In addition, Visa’s decision is final. There’s no appeal once arbitration is complete.

For these reasons, arbitration is usually reserved for high-value transactions or cases where the merchant is confident their evidence meets Visa’s requirements.

Merchants can limit their exposure during pre-arbitration by:

• Reviewing all transaction records early in the dispute process.
• Submitting complete and accurate evidence during representment to minimize the likelihood of escalation.
• Understanding the specific dispute rules tied to each Visa reason code.

Being prepared during pre-arbitration can help merchants make informed decisions. Accepting liability might be appropriate in some cases, while pursuing arbitration makes sense in others.

What Merchants Should Know About Visa Disputes

While the various card networks have similar chargeback processes, they differ enough in the details that merchants must have means of confidently navigating the many reason codes, evidence requirements, deadlines, and other variables that will impact their ability to fight chargebacks.

While guides like this can serve as a helpful reference for merchants, large or intractable chargeback problems may require more focus and specialized attention than smaller merchants can readily provide on their own. This is where chargeback management companies can provide valuable assistance, helping merchants navigate complicated card network rules to develop a chargeback defense strategy that can protect them from preventable chargebacks, no matter the source.