Visa Claims Resolution (VCR): What’s Changing & How To Prepare

Scott StoneChargebacks24 Comments

Visa Claims Resolution

It’s here. Visa has released its new global dispute resolution process: Visa Claims Resolution (VCR). All disputes will be processed through the VCR. And it will be moderated by Visa’s automated tool, Visa Resolve Online (VROL).

Time frames are getting shorter. Legacy reason codes will be consolidated. And there’s a lot to know about this process. Here’s how the VCR will affect dispute management as we know it.

You can skip ahead to learn about the new time limits and its methods in dispute resolution. But here’s the story why Visa created the VCR. It's a story that involves eliminating manual labor and saving time for Visa and you. It also introduces new dispute reason codes into the process. Let's begin.

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The New Process in a Nutshell

Visa Claims Resolution was just an idea. But after Visa found that it takes about 46 days to resolve a chargeback, they realized a lot of money was being burned in this process. And not just their money. But money that belonged to merchants, processors and ecommerce platforms.

And 46 days was Visa’s average in dispute resolution. Sometimes it’ll take more than 100 days to resolve a dispute. That’s over three months of you worrying about the outcome. That sucks.

That’s why Visa created the VCR. It was designed to reduce time, cost, and the number of chargebacks.

What Opportunities Are There With Visa Claims Resolution?

You won’t have to worry about invalid chargebacks. The VCR helps the VROL reject invalid disputes. This will help prevent disputes that either have no merit or are detected as fraud. That will let Visa stop a dispute from becoming a chargeback. This is great when a cardholder files a dispute after a certain time limit. That dispute will not be valid. VROL will also set a minimum criteria for a dispute to be further processed.

It may seem like a lot of action for dispute resolution. But that will reduce the amount of unnecessary chargebacks. It will only issue legitimate chargebacks that demand your attention. And the VCR dispute codes will help you understand why the chargeback occurred. These codes are more specific point out a dispute. And that saves time for everyone in the process. It’s great that real-time resolution is becoming a new mode in dispute management.

Time Limit Changes

Merchants had 45 days to respond to a Visa chargeback before the VCR went into effect. Now they have 30 days to submit a response. But don’t panic! The process is much simpler. Visa anticipates that its new process will reduce the exchanges between merchants, acquirers and issuers. That will result in a quicker resolution. Visa has set it expectations to resolve disputes within 31 days. It’s a bold move. But we’ll take their word for granted.

Dispute Workflows

The VCR will have two workflows: Allocation and Collaboration. This is to reduce the process in dispute resolution. But it also streamlines it. Here’s what you need to know about these workflows.

Allocation Workflow

It's assigned for fraud and authorization disputes

All fraud and authorization chargebacks go through the Allocation workflow. Visa will perform a series of automated checks. These checks will tell Visa a few things:

  • Was the fraud dispute is on 3D secure authorized transactions?
  • Did the cardholder dispute the purchase after the allotted timeframe?
  • Did the cardholder already receive a refund from the disputed charge?

The dispute will be blocked if Visa detects any of those items. And it won’t become a chargeback.

That’s the good news. Here’s some even greater news. The Allocation workflow will result in less invalid chargebacks.

But there’s still a chance that a dispute will pass through the automated checks. That will tell Visa to assign liability to the merchant. But merchants can defend themselves on specific circumstances. But that will require clear, compelling evidence to prevent a chargeback.

A merchant's  response will have more of a burden in the process. You should be fine if your SaaS platform generates responses with relevant evidence on standby. It never hurts to start upgrading your services.

But how is this different from the old process? Merchants submitted responses to all fraud chargebacks before these changes. It didn’t matter if the rebuttal was strong or the amount of evidence that was sufficient. But this new process will let merchants respond to chargebacks that were vetted by VROL. That means merchants will respond to chargebacks that really need their side of the story.

Collaboration Workflow

It's mainly assigned for processing error and consumer disputes

The majority of disputes go through the Allocation workflow. But some will require interaction between merchants, acquirers, and issuers. That's when the Collaboration workflow comes into play. It basically follows the same flow as today’s chargeback process. But its goal is to simplify communication between each party. And that will reduce the overall chargeback timeframe.

New Reason Codes

Visa Claims Resolution is all about streamlining the dispute process. The previous Visa chargeback reason codes are listed below:

Current Visa Dispute Reason Codes
Fraud Authorization Processing Errors Consumer Disputes
62 - Counterfeit Transaction 70 - Card Recovery Bulletin or Exception File 74 - Late Presentment 30 - Services Not Provided
81 - Fraud - Card Present 71 - Decline Authorization 76 - Incorrect Currency or Transaction Code 41 - Cancelled Recurring Transaction
83 - Fraud - Card Absent 72 - No Authorization 77 - Non-Matching Account Number 53 - Not As Described or Defective Merchandise
93 - Merchant Fraud Performance 73 - Expired Card 80 - Incorrect Transaction Amount or Number 85 - Credit Not Processed
78 - Service Code Violation 82 - Duplicate Processing 90 - Non-Receipt of Cash or Load Transaction Value
86 - Paid by Other Means

Visa’s new process introduces four dispute categories. And it associates each code to its numerical label (Fraud – 10, Authorization – 11, Processing Errors – 12, Consumer Disputes – 13). This will place some reason codes into retirement. Visa Chargeback Reason Code 75 ‘Transaction not Recognized’ is one of them.

But some of the old codes will be split into two codes. This will help address more specific disputes. For example, Visa Chargeback Reason Code 76 was used to label disputes as either having an incorrect currency or an incorrect transaction code. Both disputes will now have its own code. You will see VCR Dispute Reason Code 12.2 for incorrect transaction code and 12.3 for incorrect currency.

Here are the new reason codes. Feel to click on them to learn how you should respond to a dispute:

VCR Dispute Reason Codes
Fraud (10) Authorization (11) Processing Errors (12) Consumer Disputes (13)
10.1 - EMV Liability Shift Counterfeit Fraud 11.1 - Card Recovery Bulletin 12.1 - Late Presentment 13.1 - Merchandise/Services Not Received
10.2 - EMV Liability Shift Non-Counterfeit Fraud 11.2 - Declined Authorization 12.2 - Incorrect Transaction Code 13.2 - Cancelled Recurring
10.3 - Other Fraud - Card Present Environment 11.3 - No Authorization 12.3 - Incorrect Currency 13.3 - Not As Described or Defective Merchandise/Services
10.4 - Other Fraud - Card Absent Environment 12.4 - Incorrect Account Number 13.4 - Counterfeit Merchandise
10.5 - Visa Fraud Monitoring Program 12.5 - Incorrect Amount 13.5 - Misrepresentation
12.6 - Duplicate Processing/Paid by Other means 13.6 - Credit Not Processed
12.7 - Invalid Data 13.7 - Cancelled Merchandise/Services
13.8 - Original Credit Transaction Not Accepted
13.9 - Non-Receipt of Cash or Load Transaction Value

Visa will continue to provide data to merchants when they need it. Their goal is to help merchants understand the reason for the dispute. Issuers will also be required to fill out a Dispute Questionnaire. This lets them provide the necessary information to all parties before the dispute is initiated. And by ‘dispute’, they mean chargeback.

New Codes, New Evidence?

The compelling evidence associated to each reason code won’t be official until Visa releases its new rules and regulations. But there doesn't seem to be a lot of changes. That could mean merchant will gather the same compelling evidence.

Let’s give you an illustration. This shows what compelling evidence is needed for fraud chargebacks of an ecommerce transaction for digital goods:

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Compelling Evidence Comparison
Current VCR
81 - Fraud - Card Absent 10.4 - Other Fraud - Card Absent Environment
You need to give a description of the downloaded goods or services. It'll be great to add the download date and time of such goods or services. You'll need to include two or more of the following information: Merchants need a description of the services that were successfully downloaded. It'll need to show the download date and time of such services. You'll need to include two or more of the following information:
You can include the purchaser’s IP address and the device’s geographical location. It'll need to show it was involved at the date and time of the transaction. Merchants can include the purchaser's IP address and the device geographical location. It'll need to show it was involved at the date and time of the transaction.
You can include the device ID number and its name (if available). Merchants can include the device ID number and the name of device (if available).
You can also include the purchaser’s name and email address linked to the customer profile. It'll be great be great to show it on record with the merchant. They can also include the purchaser’s name and email address linked to the customer profile. It'll be great to show that it was held by the Merchant.
You can provide evidence that the cardholder accessed the profile related to the purchase. It'll be great to show proof that it's available on the merchant's website. But you need to show that the merchant verified the purchase before the transaction date. Merchants can provide evidence that the cardholder accessed the profile related to the purchase. It'll be great to show proof that it's available on the merchant's website. But you need to show that the purchase has been verified by the merchant before the transaction date.
You can prove that the merchant’s website or application was accessed by the cardholder. But you need to make sure it's associated to the goods or services on or after the transaction date. They need to prove that the their website or application was accessed by the cardholder. But you need to make sure it's associated to the merchandise or services on or after the transaction date.
You need to provide evidence of the device and card used in the disputed transaction. But you need to prove that the device and card were the same as in any previous, undisputed transactions. Merchants can provide evidence that the same device and card was used in the disputed transaction. But you need to prove that the device and card were used in any previous transaction that was not disputed.

Specific copy changes are emphasized by red or blue text. Most of them are small changes. One example is changing ‘goods’ to ‘merchandise’. But VCR’s evidence remains relatively unchanged.


Visa Claims Resolution is expected to save time and increase efficiencies. Here’s what merchants should know about the new process:

  • The timeframe to submit a response has shrunk from 45 days to 30 days.
  • Invalid chargebacks are stopped before they reach the merchant through new automated workflows.
  • Fraud and authorization chargeback responses are only allowed when the merchant can definitively prove the dispute is invalid.
  • Reason codes are getting an organizational makeover. But the compelling evidence remains largely unchanged from what was previously accepted.

How Merchants Should Prepare for VCR

Visa had to push back the effective date of the VCR from October 2017 to April 2018. That gave merchants more time to prepare for the changes. But the reduced timeframe will put more burden on dispute responses. And the requirements will be more rigid for fraud and authorization chargeback responses. It’ll have to adhere to Visa’s new rules and regulations.

You can only generate responses long enough to realize you need more firepower. You’ll need automation in order to submit your responses. But automation will work more efficiently if all the information was stored in one place. A place where cardholder information, gateway data and order details can be extracted by reliable APIs and programmatic software.

But this also requires a software that actually knows these reason codes. It has to stay updated on any changes from Visa. This software needs to work as if you never have to worry about learning a new reason code ever again.

Let Me Introduce the Chargeback App

The Chargeback App brings all of your data sources together with automated dispute management. That’s the key to real-time resolution. We’re excited to see Visa take on a similar path. But we’d love to see your team earn the benefits. Feel free to contact us to learn more about the Chargeback App. You can also request a demo in order to experience what is being offered to you. Until then, feel free to learn more about pricing. You can also read more material from our blog.

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24 Comments on “Visa Claims Resolution (VCR): What’s Changing & How To Prepare”

  1. I’m confused with this “Essentially, responses will only be allowed if the merchant can definitively prove the chargeback is invalid.”
    How can VISA know when to allow merchants to submit the evidence and when not? If they only accept the responses when merchant can definitely prove the chargeback is invalid.

    1. All this doesn’t seem to change Visa’s bottom line on arbitration “If the Arbitration Committee rules in favor of the cardholder, the merchant will be responsible for the amount of the chargeback, as well as, any fees assessed by the Card Association. These fees start at $150 and range to $500 or more.” So even if you know the cardholder is wrong, is it worth the gamble of up to $500 or more to try to prove? Difficult for a small business to have to pay up to $500 or more for a small chargeback amount. Totally unfair to the small merchant, and the whole system is rigged in favor of the cardholder.

    2. Hey Martins,

      Here invalid chargebacks are something else, the merchant will continue to challenge chargebacks the way they are doing at present. It is at system level that the invalid chargebacks will be filtered out. Now What are invalid chargebacks, “invalid chargebacks are those which are processed by the issuer for a transaction which is more than 119 days old, or any transaction for which a refund is already processed. MasterCard’s system is already rejecting such chargebacks.

      Merchants will be allowed to submit documents for a chargeback they way they are already doing.

  2. Under the new VCR initiative, Visa aims to streamline the processing of disputed transactions, expedite resolution and eliminate invalid disputes whenever possible. However, these changes will require merchants to play a much more active role in the process.

    1. This implementation will favour merchant more than the issuer. My question is what are merchant expected to during this process.

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  6. They left out two MAJOR problems!!!! :Friendly Fraud” too easily allowed by issuing banks-some issuers even allow chargebacks to be filed online with no actual person screening the validity. And “Friendly Fraud” perpetuated by understaffed issuing bank chargeback departments who don’t even read merchant replies and just reject them.

  7. I found a fraudulent charge but it was past 120 days so my credit card company and Visa refuse to do anything about it. This is a big change.

    1. To be clear, the VCR update should not impact the cardholder – the purpose of a chargeback is to resolve the financial liability for the cardholder reimbursement between the issuer and acquirer

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