With every improvement made in security and customer knowledge, one threat remains constant: friendly fraud. Friendly fraud is the chargeback threat that can slowly but surely eat away at merchant confidence and profits.
Some merchants accept that friendly fraud and chargebacks are simply the cost of doing business. Don’t give in to the fraudsters and problems in the dispute system that contribute to friendly fraud. Instead, empower yourself with knowledge, tools, technology, and customer service skills to prevent friendly fraud and chargeback fraud from impacting your bottom line.
With the recent changes introduced by the Visa Claims Resolution (VCR) program, merchants must be even more vigilant to reduce friendly fraud risks, especially given the potential impact the retirement of Reason Code 75 will have on fraud prevention.
What Is Reason Code 75?
Reason Code 75, “transaction not recognized,” was one of the most commonly used codes, which issuers used to obtain more information to confirm fraud.
Visa officially stated that Reason Code 75 was retired because: The Cardholder does not recognize the Transaction and additional information beyond the data required in the Clearing Record is needed to assist the Cardholder in identifying the Transaction.
This places new demands on merchants to prove a transaction is in fact valid. The concern from merchants and issuers is that the retiring of Reason Code 75 may encourage more friendly fraud claims. Because the root cause still remains with the cardholder who does not recognize the transaction, the cardholder is inclined to file a chargeback or dispute.
At first glance, this might not appear to be much of a change for merchants. However, VCR’s introduction of two new dispute resolution workflows – Collaboration or Allocation – makes it significant.
Now, previous Reason Code 75 chargebacks will fall under the Allocation workflow. The challenge Allocation workflow presents for merchants is the automatic liability placed on them and the possible removal of automatic rights to represent or proceed with the dispute process.
Merchants must now provide compelling evidence before initiating the dispute process against the friendly fraud claim. This means that merchants must assess how they can improve internal and external processes to prevent the confusion and errors that enable friendly fraud chargebacks.
How to Prevent Friendly Fraud
Typically, cardholder confusion triggers friendly fraud claims, but intentional fraud can also be buried under the friendly fraud moniker. Regardless of the underlying reason for the friendly fraud chargeback, the onus is on the merchant to provide compelling evidence to dispute the claim.
The new Allocation workflow requires merchants to be ever-vigilant in how they communicate with cardholders and manage their internal record keeping.
Common friendly fraud claims include:

  • The item wasn’t delivered
  • The item doesn’t match the online description
  • The cardholder returned the item and did not receive a refund
  • The order was cancelled but the item was still delivered
  • The cardholder does not remember making the purchase

The best defense for merchants against such claims is a combination of advanced payment solutions, well-trained customer service, and effective best business practices.

  • Advanced fraud prevention technologies. Use a payment solution that takes advantage of the latest in fraud prevention technologies, including IP intelligence, 3D Secure, tokenization, geolocation and SSL.
  • Customer service. Make sure your customer service team maintains thorough records of every cardholder communication. This includes emails confirming the purchase and credit card authorization, shipping details, tracking number confirmation, and responses to questions about the product or service.
  • Best business practices. Incorporate clear refund and return policies, up-to-date product descriptions and photos, confirmation emails, detailed credit card statement descriptors, tracking and shipping confirmation details, verification of cardholder details, and a detailed review of cardholder history.

Remember that under VCR you are liable for all fraud disputes – friendly or malicious. It’s up to you to provide the compelling evidence demanded by Visa, and only then can you initiate a chargeback representment or dispute process.
Keep in mind that this is all happening within a time frame shortened from 45 to 30 days. Now, you must be ready to respond quickly with your compelling evidence and be up-to-date with the new Visa Resolve Online dispute platform.
We urge you to take time now to learn as much as possible about VCR:

You can contact us to ask any VCR questions you have and to discuss your friendly fraud risks.


Effective customer service is no longer simply a nice-to-have. To succeed in this hyper-connected digital age, it must be a top priority for every merchant and brand. Making customer communication and satisfaction a priority goes a long way to prevent chargebacks.
First, think about the common reasons customers give for filing a chargeback. Often, customers file chargebacks because they simply didn’t know what else to do. They were confused about a charge, didn’t know whom to contact, or were reluctant and lacking confidence in the merchant’s ability to help them.
This can be prevented and resolved with exceptional customer service and marketing. Yes, marketing – now in this digital age, every blog post, sponsored post, or piece of social content is part of the brand image and impacts heavily on customer perception of the brand. It’s time for the customer service team to move forward and implement new ways of communicating, solving problems, and reinforcing marketing efforts.
Proactive Customer Service
There is nothing worse than being ignored or forgotten. A phone call to customer service about an unrecognized charge on a credit card statement can result in a maze of automated voice responses, resulting in frustration. The customer still has the original problem and has little choice but to file a dispute, because she believes this is the only recourse available.
Merchants must break this cycle and give customers what they need and want – access to information and direct contact to personnel to help them resolve their issue.

  • Be responsive. Make it easy for customers to find contact information and to get answers to problems.
  • Be clear. Provide regular communication to customers through email, newsletters, and website updates.
  • Be honest. Don’t hide problems that are causing delays in delivery or quality of service.
  • Be a proactive listener. The best way to build brand loyalty is to listen and act on customer feedback and criticism.
  • Be generous. Consider giving customers free trials or extra benefits to reward commitment or to salvage a damaged relationship.
  • Be professional. Ensure the customer service team is professional at all times. This means responding quickly, clearly, and courteously.
  • Be human. Customers like to feel connected to a known and reliable brand. The best way to do this is to humanize the brand.

Underscoring every moment of customer interaction is an investment in brand loyalty and customer commitment. It’s imperative that building brand loyalty is a key component of your chargeback prevention strategies.
The trickle-down effects of going the extra mile to reach out, listen, and respond can have global implications. A happy customer can be the best marketing tool a brand has.
Customer Service in the Digital Age
Virtually everyone uses social media in some aspect. This means brands must connect with customers where they are and how they use the Internet.

  • Social media takes work. Merchants must do more than post to their social media channels. Be attentive to customer questions and tagged posts. Respond proactively and positively.
  • Consider brand ambassadors. Brand ambassadors are a great way to help build a digital profile and connect with customers by humanizing the brand.
  • Don’t neglect social channels. Too many companies create social media accounts and fail to use them. Customers who reach out on these channels without a response take exception to this lack of engagement – by way of moving on to your competitors.

A bonus of the digital age is that merchants have new tools to prevent chargebacks. Customers expect more from merchants, since they know how easy it is to reach out and connect. Be the brand that others want to live up to – communicate, be proactive, be available, correct and learn from mistakes, be human, and reduce your chargebacks.
Contact us today – Verifi experts can help you put solutions in place to support customer service efforts to prevent chargebacks and extend brand loyalty.


Packages sometimes get lost. Products don’t always live up to expectations. Consumers forget they made a purchase. In other words, disputes happen. That’s why it is so  important for merchants to devote as much attention to customer service as they do to designing their products and website. Merchants who emphasize customer relationship management will promote the brand and build lasting customer loyalty at every touchpoint.
How to Use CRM to Prevent Disputes and Build Customer Loyalty
Intelligent CRM can prevent friendly fraud, build customer loyalty, and prevent chargebacks. Merchants should incorporate these CRM best practices to prevent chargebacks and improve customer experience:

  • Order review. Always review the order carefully to ensure there are no errors or duplicates in the order system.
  • Clear refund and return policy. Make sure your refund and return policy is easily available on the website and clearly stated on the confirmation email or paper receipt. Particularly for card not present merchants, a clear refund and return policy can encourage online shoppers to be confident in their purchase.
  • Track the transaction. Keep complete records of the entire transaction and any communication with the customer. This can be useful when answering customer concerns and disputing chargebacks.
  • Shipping options and policy. Provide customers as much information as possible about the estimated shipping and delivery date. Send an email when the product ships and provide a tracking number.
  • Be flexible. There are times when a customer honestly makes a mistake with their order or does not understand the return and refund policy. Encourage customer service to be flexible and bend the rules when necessary, particularly for long-standing loyal customers.
  • Clear product descriptions. Prevent friendly fraud disputes and customer dissatisfaction with accurate website descriptions of products and services. Include photos and, if possible, customer reviews of the product or service.
  • Be proactive. Monitor social media and respond quickly to any questions about products, services, company policies, etc. The more supported the customer feels – the better.
  • Be available. Clearly display customer service contact information and, if possible, use a chat window to encourage customer communication. Respond to emails quickly and inform the customer when their order may be delayed.
  • Confirm the order. Send the customer a confirmation email before shipping the product and charging their credit card. Ask the customer to confirm that they made the purchase.
  • Follow up. Contact the customer after delivery confirmation to obtain feedback on their purchase. Give the customer an opportunity to ask questions.
  • Support the customer service team. Provide customer service with the tools they need to do a thorough and efficient job, because often they are the only contact customers have with your company.

Good CRM goes a long way to foster and promote customer loyalty. It’s very hard to recover from the viral nature of a negative review or social media comment due to poor customer service. Protect your present and future sales, and prevent transaction disputes by implementing best CRM practices.


April always comes with anticipation, signaling an end to winter and warmer days ahead. Better weather motivates consumers to shop at outdoor markets, refresh their wardrobes, and spruce up their homes. This all points to good things for merchants.
However, April 2018 brings a level of uncertainty with the rollout of the new Visa Claims Resolution (VCR) program. VCR’s overarching goal is to reduce timelines and simplify the chargeback process. Visa expects VCR to reduce the number of chargebacks and their associated costs.
What Changes Does VCR Introduce?
The following is a brief overview of VCR changes:

  • Consolidated reason codes. VCR consolidates 22 chargeback reason codes into four dispute categories: Fraud, Authorization (Allocation workflow), Processing Errors, and Consumer Disputes (Collaboration workflow).
  • Reason code 75 is eliminated. Sometimes referred to as “Transaction Not Recognized,” this reason code is being retired. This may result in an increase of friendly fraud, underscoring the importance of maintaining detailed records on transactions and customer communications in case you need to conduct a dispute response.
  • Dispute process shifts from litigation to liability. VCR introduces two new methods of investigating disputed transactions: Allocation and Collaboration.
  • Shorter time frames. The chargeback dispute resolution timeframe is reduced from an average of 45 – 105 days to 31-70 days (Fraud and Authorization chargebacks) and 31 – 100 days (Customer Disputes and Process Error chargebacks).
  • Emphasis on the Visa Resolve Online dispute platform. The ultimate goal is for Visa Resolve Online (VROL) to be more effective with VCR.
  • New VCR terminology. Dispute replaces chargeback, and dispute response or pre-arbitration replaces representment.

Learn more about VCR changes:

What Is VCR Allocation?
The Allocation workflow will address the new fraud and authorization dispute categories. Visa automatically manages these disputes by conducting an initial review of the dispute and then determining how to proceed.
Under the Allocation workflow, Visa uses three key factors to determine how to process the dispute:

  • Is this disputed charge a 3D Secure authorized transaction?
  • Was the dispute filed within the dispute time frame?
  • Has the disputed transaction been refunded?

If any of the above questions are true, Visa blocks the dispute and prevents it from moving forward in the chargeback process. This new approach should result in fewer disputed transactions for merchants.
However, merchants need to understand their responsibility when Visa does not block the dispute and allows it to continue through the dispute process. Merchants will be liable for the disputed transaction and will not have automatic rights to proceed with the dispute response process.
Under VCR, merchants can only initiate a dispute response when they can provide compelling evidence that the dispute is invalid. This emphasizes the need for merchants to use an integrated payment solution that enables a quick and efficient response to disputes permitted to move forward.
Because of how fraud and authorization disputes are reviewed, merchants should use fraud detection technologies such as CVV, AVS, and 3D Secure during the payment authorization process. This makes it harder for automatic approval of fraud and authorization dispute categories, which will prevent the dispute from proceeding.
How to Prepare for a VCR Dispute Response
Shorter time frames, a new Allocation workflow, simplified reason codes, and the elimination of reason code 75 place new demands on merchants during the chargeback process. Proactive merchants can use VCR as the catalyst to review and improve how they manage cardholder interactions:

  • Be ready for friendly fraud disputes. With the removal of reason code 75, friendly fraud claims could increase. Merchants must be prepared to defend against friendly fraud disputes and review how easily they can collect key evidence, including delivery receipt, authorization confirmation, refund/review policy, etc.
  • Be ready to respond. The shortened time frame for a fraud or authorization dispute doesn’t leave much time to collect and review compelling evidence. Because the Allocation workflow places liability on the merchant, it’s important to be prepared to collect and provide this compelling evidence in advance.
  • Don’t forget customer service. Remember the customer service team is a merchant’s first line of protection against a dispute. Make sure your team follows recommended best practices to help prevent unnecessary disputes.
  • Focus on merchant-issuer communication. By using a payment solution that enables merchant-issuer collaboration, everyone wins. When merchants and issuers share data and collaborate to communicate quickly with the cardholder, discerning valid sales and true fraud claims will help to prevent unwarranted disputes from proceeding.

Contact us to learn how Verifi experts and payment solutions can ensure you’re ready for the new demands placed on your business by VCR.
 


The recent news of hackers breaching the payment systems of Saks Fifth Avenue and Lord & Taylor department stores, stealing sensitive credit card information, is just one in a recent series of attacks affecting consumers. This comes on the heels of a disclosure from Under Armour that a hacker stole data from its MyFitnessPal app, affecting 150 million users. In recent years, Whole Foods Market, Chipotle Mexican Grill Inc., and Omni Hotels & Resorts also suffered damaging data breaches. Acting sometimes in groups, sophisticated cybercriminals wreak havoc on an alarming number of robust databases, getting away with valuable customer information.
Hackers Follow a Four-Step Process
While each attack is unique, a successful hacker typically follows a series of steps:

  • Research: Hackers search for merchants with a security weakness, such as an open and free WiFi network, disgruntled employees, outdated security systems and other communication and security gaps.
  • Invade: Acting fast, hackers employ advanced technology and inventiveness to break in and move around freely.
  • Attack: Two methods of approach are to attack a company’s network and social vulnerabilities. In a network attack, the hackers exploit weaknesses in the company’s IT infrastructure to access confidential data. A social attack tricks unwitting employees into giving up secure information or access to databases. As with the Saks breach, a believable-looking email asks the employee to confirm their credentials or open an attachment that has embedded malware.
  • Steal: The hacker’s mission is completed by committing the theft.

Protect Your Business Against Data Breaches
A data breach can be devastating to the affected business, and by extension to their consumer client base. Consumers rely on merchants to protect their information from hacks and hold them accountable when a breach occurs. In the cases of Saks, Under Armour, Chipotle and others, their security measures did not serve as sufficient protection against attacks.
Unfortunately, data breaches have become an ever-present threat – new incursions happen every day. It is imperative for merchants to act on placing security as a high priority. In the event of experiencing a data breach, consumers can be quick to beat a path to avoid the targeted merchant.
Ensure that your payment solutions and customer account information are secured against potential weaknesses by observing these measures:

  • Multi-layered fraud prevention. Choose payment solutions that employ layered fraud detection technologies to help stop criminals.
  • Be smart about data. Don’t keep any customer data on file, in the cloud, in a database, or on a USB drive.
  • Use encrypted communications. Work with industry experts to configure an encrypted communications network and payments solution.
  • Stay alert. Conduct reviews of your payment solutions, educate your employees on the risks and potential for data breach attacks, and know the signs of fraudulent activity.

To implement the right protection and fraud prevention platform for your business, understand that a one-size-fits-all solution is probably not the answer.
Verifi’s Intelligence® Suite is a customizable, multi-layered fraud prevention solution that helps to ensure you have the right protection for your business. Our turn-key platform allows merchants to select from a suite of services to provide optimal protection for their business against attacks from fraudsters. And, to protect merchants from emerging fraud vulnerabilities, Intelligence Suite stays current with advanced payment technologies.
Contact us to learn more about how Verifi can provide a customized protection solution for your business.


Friendly fraud is on the rise. Chargeback costs eat away at revenue and productivity for merchants and issuers, and the threat of chargeback fraud is a constant worry.
It’s time to end the practice of merchants and issuers operating in silos.
Despite these liabilities, merchants and issuers continue to operate independently. In the current chargeback fraud model, cardholders typically contact issuers first with a complaint. Lacking adequate information about the purchase, issuers  initiate a chargeback. The customer, after all, is always right and by extension must be trusted. This leaves the affected merchant to deal with the chargeback dispute with little choice but to accept it as a cost of doing business.
It doesn’t’ have to be this way. In an era of instant communication and easy collaboration technologies, it’s time for merchants and issuers to collaborate so fraudsters don’t continue to make gains.
Friendly fraud and chargeback fraud are not going away. A recent Nilson Report estimates that the financial impact of chargebacks could reach close to $30 billion globally by 2020. Couple this with a 2015 Javelin Research Report that highlights that fraud and chargeback management drains 13 to 20% of organization resources and you have an industry-wide problem merchants and issuers must solve together.
Friendly Fraud Is Too Easy
Friendly fraud is the easy way-out for cardholders. Whether they regret a purchase or simply choose to steal from the merchant, it has become the de facto method to regain funds. particularly for consumers who make card-not-present (CNP) purchases.
It requires little effort for cardholders to use the phone number on the back of their credit card to initiate a dispute with their issuer. In their minds, this is their best and most obvious way to get their money back.
Accepting that chargebacks and friendly fraud are a cost of doing business is not sustainable.  When merchants and issuers collaborate and share data, they catch friendly fraud early and prevent unwarranted chargebacks. Fortunately, tools and technologies are readily available to make collaboration possible.
Fighting Fraud with Shared Data
The rise of CNP purchases and e-commerce sales has created an enormous amount of data that merchants and issuers can leverage together to detect and prevent fraud. The rise in machine learning, artificial intelligence, and other advanced fraud detection techniques – such as biometrics, geo-location analysis, and detailed customer data – can and should be used to full potential. By providing better insight into cardholder purchase history, merchants and issuers can erase many of the underlying issues contributing to friendly fraud.
They key to solving the merchant-issuer communication gap is in proven payment solutions that make collaboration possible.
When relevant purchase, cardholder, and transaction data is available at the initiation of a dispute, chargebacks are much more likely to be prevented. This can only happen when merchants and issuers collaborate.
Effective fraud prevention and detection requires real-time collaboration and data sharing. Contact us to discuss how you can benefit from Verifi’s Order Insight, and put a stop to this endless cycle of friendly and chargeback fraud.


The changes introduced by the Visa Claims Resolution (VCR) program are right around the corner. With VCR coming into effect in April, merchants and issuers need to rethink how they currently manage and respond to chargebacks.
The VCR program is designed with the intent of streamlining the transaction dispute process, thereby easing the burden on merchants and issuers. However, with the consolidation of reason codes and the subsequent removal of reason code 75, “Transaction Not Recognized,” questions arise on how merchants and issuers can best respond to what has been a common friendly fraud chargeback claim.
This new rule in the process will place demands on issuers’ customer service agents and does not include a customer self-resolve option. This adds pressure on both issuers and merchants to spend time, resources, and energy in a new system that effectively changes the way they investigate and ultimately dispute this very common dispute claim.
Retired: Reason Code 75
The official chargeback condition from Visa for this soon to be defunct reason code is: The Cardholder does not recognize the Transaction and additional information beyond the data required in the Clearing Record is needed to assist the Cardholder in identifying the Transaction.
In other words, the merchant will be expected to provide additional supporting information to prove that the cardholder did authorize the charge. Because this new process does not include capabilities for customers to self-investigate and self-resolve their concerns, issuers and merchants are forced to devote extra resources on resolving these friendly fraud claims.
In this case, Visa will allow issuers to leverage data from the Visa portal and research a transaction for more information. This transaction inquiry function allows issuers to search Visa databases to verify authorization and settlement transactions to assist their customers in recognizing the disputed transaction. However, this resource-draining activity will likely impede issuers’ efforts to resolve disputes in a timely and cost-effective manner.
In addition, VCR removes the restriction requiring the addition of cards to the TC40 file if a fraud dispute is submitted. In the case of a known fraudulent transaction that results from a data breach, Visa’s reimbursement program requires the card to be on the TC40 list. This leads to a decision dilemma: Visa issuers will need to decide if placing the card on the TC40 file is worth having the option of reimbursement.
If the issuer decides to submit the transaction as fraud and add the card to the TC40 file, merchants must understand that using the TC40 file to stop chargebacks will not be as effective – as this will likely result in an increase in false positives from the disputes previously submitted as “Transaction Not Recognized.”
Enabling Better Merchant-Issuer Collaboration
The ultimate goal for both merchants and issuers is to spend less time dealing with chargeback and friendly fraud claims. This can be a costly experience and often result in frustration, errors, and dissatisfied cardholders.
This reinforces the need for true merchant-issuer collaboration. Imagine if this process was refocused to enable merchants and issuers to communicate easily and share data when a cardholder makes a claim. Merchants and issuers can share transaction information and quickly communicate with the cardholder regarding the claim. In most cases, supporting documentation can reveal that the charge is valid with no further action required. The cardholder is satisfied and no time or resources are wasted by merchants and issuers.
Contact us to learn more these new processes and how to respond to disputes and manage chargebacks.


Subscription services have become a popular option for young consumers.
What could be better than subscribing to services that promise home delivery of food, razors, clothing, luxury goods, makeup, video games, beer and wine, or underwear?
A boon for consumers and for merchants – or is it?
Merchants cannot ignore the looming threat of subscription chargebacks and churn. Consumers risk subscribing to businesses that have quality control issues, provide poor customer service, or offer spotty customer communication – any of which can result in chargebacks, churn, and brand damage.
While subscription services are booming, merchants must assess their ability to deliver consistently high quality services. The risks of failure are high, particularly when consumers use social media to take issue with the value, quality, and timeliness of the subscription delivery.
Modern E-Commerce Subscription Services
While start-ups comprise the majority of new subscription services, many large brands are drawn to the potential of continued growth in this market space, including P & G (Gillette on Demand), Sephora (Play!), and Walmart (Beauty Box). Each sees subscription service as a way to attract a new generation of consumers and maintain their current customer base.
A subscription services survey fielded by McKinsey & Company in November of 2017 to more than 5,000 participants revealed these insights:

  • 15 per cent of online shoppers have subscribed to an e-commerce service in the past year. 35 per cent of these subscribers also subscribe to a media-streaming subscription service.
  • The target demographic is urban 25 to 44-year olds with incomes ranging from $50,000 to $100,000. 60 per cent of these subscribers are women.
  • Although women are more likely to subscribe, men are more likely to have more than three active subscriptions. This is above the average of two subscriptions.

The McKinsey & Company survey identified three key types of subscription services:

  • Replenishment. Accounting for 32 per cent of all subscription services, replenishment restocks common home items regularly, such as razors, shampoo, or diapers.
  • Curation. Offers a degree of surprise and personalization, with services selecting clothing, food, or beauty products based on the subscriber’s profile. Represents the high percentage of subscribers capturing 55 per cent of those surveyed who subscribe to a service.
  • Access. Offers members-only perks and exclusive discounts to subscribers. The exclusivity of this subscription category drives the 13 per cent subscription rate.

Consumer Demand Drives High Subscription Service Expectations
The draw of a subscription service is primarily in convenience and personalization. Consumers are willing to pay for a personalized box of snack food that arrives monthly at their home, eliminating a trip to the grocery store and meeting their highly curated preferences. What could be better?
High expectations make it extremely challenging for merchants to realize success. Any misstep such as a late delivery, damaged product, or failure to live up to promises can quickly turn into consumer dissatisfaction.
These problems are more likely to be overlooked or understood in a non-subscription, one-off online purchase. Because the consumer has not made a long-term commitment to the merchant, it’s easier to accept such missteps. But subscription services have a razor thin margin of error.
Merchants must be prepared to go above and beyond to appease subscription service consumer concerns. To prevent the threat of chargebacks and churn rife within the subscription services business model, merchants must practice these key business strategies, including:

  • Clear subscription policy. Make the subscription policy clear and easily available to ensure that customers understand the cancellation policy, length of subscription, and billing schedule.
  • Easy cancellation. The easier it is for subscribers to cancel their subscription, the less likely they are to contact their credit card company to dispute transactions.
  • Regular emails. Along with a subscription confirmation email, send regular billing reminder emails. This helps prevent the “I forgot I ordered this” friendly fraud claim.
  • Free trial rules. Be clear about the rules of the free trial, particularly if it has an automatic subscription at the end of the trial.
  • Excellent customer service. Superior customer service is critical for success, because subscription services come with greater consumer expectations.

Merchants can benefit from the subscription services model, but it’s important not to take seemingly simple success for granted. Being attentive to consumer demands can limit and even prevent risks of disputes and chargebacks, and mitigate churn to help build long-term relationships.
Just as you’re keenly in tune with consumer demands, you must be equally aware of your chargeback risks and ensure you’re able to monitor for lost recurring billing revenue. Please contact us to learn more about how to use good customer service and modern business practices to prevent chargebacks and churn in your subscription services offerings.


Changes are coming to how Visa transaction disputes and chargebacks will be processed and  managed. With the new Visa Claims Resolution (VCR) program, Visa hopes to reduce the timeframes associated with chargebacks, thereby reducing merchant, issuer and Visa costs, resource drains, and the number of overall transaction disputes.
While promising for merchants, change can be hard to manage and integrate into what is already a confusing dispute resolution process. VCR comes into effect in April 2018, which means merchants have no time to waste learning about VCR and how it can and will impact your business day-to-day.
What Changes Are Coming With VCR?
While the changes coming with VCR may appear daunting and confusing, it’s important to remember that Visa created VCR with the goal of improving the process for all parties involved. For full details on VCR, refer to the Visa Claims Resolution Learning Resources website.
In an effort to streamline the transaction dispute process, the following changes will come into effect in April 2018:

  • Consolidated reason codes. VCR consolidates 22 chargeback reason codes into four dispute categories: Fraud, Authorization, Processing Errors, and Consumer Disputes.
  • Reason code 75 being replaced. Reason code 75, “unrecognized transaction,” was confusing for merchants and cardholders and is being replaced with a new process –Merchant Purchase Inquiry. This new process will provide transaction information (purchase information, digital receipt, and order details) to the cardholder, eliminating confusion over unrecognized transactions.
  • Dispute process transitions from litigation to liability. VCR supports two methods of investigating disputed transactions: Allocation and Collaboration. Allocation is focused on Fraud and Authorization type disputes and enables Visa to decide in real-time who is responsible for the dispute. Collaboration enables issuers, acquirers, and merchants to collaborate and share chargeback dispute resolution evidence.
  • Shorter timeframes. A key VCR objective is to streamline the chargeback dispute resolution process down from an average of 46 – 105 days. Fraud and Authorization chargebacks will be allotted 31 – 70 days. Customer Disputes and Processing Error chargebacks will be given 31 – 100 days.
  • Updates to the Visa Resolve Online dispute platform. The Visa Resolve Online (VROL) platform has been updated to support the new VCR dispute rules and process. The ultimate goal is for VROL to be more effective with VCR.
  • New VCR terminology. Basic chargeback terms will change. The terminology updates include: chargeback, replaced with dispute; and representment, replaced with dispute response or pre-arbitration.

Refer to the following resources to learn more about these changes coming with VCR:

How Will VCR Benefit Merchants?
Visa expects VCR to provide a range of benefits to merchants, including:

  • Reduction in dispute volume. With the use of stricter and more effectively enforced rules, VCR is expected to reduce the chargeback dispute volume by preventing invalid disputes from being entered and processed.
  • A proactive dispute resolution process. With the new dispute categories, plus more efficient use of VROL and the implementation of Merchant Process Inquiry, merchants will be able to resolve transaction disputes
  • Identify, track, and monitor abuse. With its indexing capabilities, VROL can proactively monitor for reporting issues. This allows faster identification for areas of training and education that can result in fewer chargebacks.
  • Better customer experience. Everyone may benefit – including issuers, acquirers, merchants, and cardholders – from streamlined transaction dispute timeframes.

How will VCR impact your current chargeback dispute resolution practices? Do you have access to the support that Verifi’s Chargeback Representment Service provides, ensuring you can respond to chargebacks within the new 30-day time limit? How do you plan to manage the new Allocation and Collaboration automated response requirements? Reason codes are confusing enough, and now with the consolidation of 22 reason codes into four dispute categories, who will you turn to for chargeback guidance and support?
Don’t wait until it’s too late and you’re left scrambling for answers – contact Verifi to get the answers to your VCR questions. We can provide you the chargeback recovery support you deserve.

Security – specifically Internet security – is very much top-of-mind for anyone involved in payments. Whether you’re an online merchant building an omnichannel presence, or a company like Verifi that provides payment services and fraud protection to merchants, having confidence in your communications security platform is vital.
It’s this keen attention to security that drives Verifi to take measures that fortify our security protocols. As a result of security vulnerability identified by the Homeland Security U.S. Computer Emergency Readiness Team, we are updating the security implemented in our servers and gateway.
There is an industry-wide deadline of June 30, 2018 for all companies to update to a new security protocol. We believe it’s extremely important to be ahead of the curve on this update; therefore, we are updating to the new security protocol on March 31, 2018.
TLS 1.3 Security Protocol Update
Compliance with this security update is being mandated by the Payment Card Industry Data Security Standard (PCI DDS). This means that all parties that are bound by the latest PCI DDS regulations must update to version 1.3 of the Transport Layer Security (TLS) protocol.
As of March 31, 2018, TLS 1.3 will protect and secure all Verifi encrypted communication. This further strengthens all communications against vulnerabilities, providing our clients with confidence in knowing that we are using the latest, most robust measures in server/web browser communication security.
At present, not all web browsers support TLS 1.3. To protect yourself and your clients, we suggest using Google Chrome version 63 or Mozilla FireFox versions 52 and above. At the time of writing, Internet Explorer, Microsoft Edge, Opera, and Safari web browsers do not support TLS 1.3.
Your HTTPS websites rely on the latest TLS security protocols to deliver encrypted communication with your clients and with Verifi. Therefore, it is important that you also update your server and gateway security to TLS 1.3. Your IT department should be aware of the PCI DDS requirements and the need to upgrade to TLS 1.3.
For more information on how Verifi is committed to providing secure payments and our industry-leading fraud and chargeback prevention solutions, contact us today.