New Visa Chargeback Rules

As of April 15, 2018 Visa has implemented changes to how merchants may dispute cardholder chargeback claims. Learn about these changes and how they may affect your business.

** Article Updated April 30, 2020

Effective globally April 15, 2018

Visa rolled out global changes to its chargeback process. While you should have received information about the Visa Claims Resolution (VCR) initiative from your merchant services provider, CellarPass is committed to helping you stay informed of these updates and understanding how to use CellarPass features properly to reduce chargeback claims and make gathering evidence for chargeback disputes as smooth as possible.

Tips for reducing chargebacks

1. Provide Detailed Experience and Event Descriptions
   1. Write compelling and informative experience/event descriptions that clearly outline what is included for the fee.

   Here is an sample description for a basic tasting bar experience:

   Enjoy a flight of 3 wines of your choosing from our current release wine list (changes seasonally).  Bar tastings are our most casual experience offered and are hosted exclusively in our very lively main tasting salon. This experience is held in a community space shared with other guests and offers standing room only.

   The above example sets the guest expectations as to what they will receive, where the tasting will take place and general environment.

2. Cancellation Policy & Lead Time Settings
   1. Write a clear cancellation policy that guests can review BEFORE they book and be sure to include the same information in their confirmation email as well. CellarPass provides you with the tools to create policies that are unique to your experiences. Your private seated wine & food experience may not have the same cancellation needs as your basic bar tasting. 
   2.  In your RSVP event settings, be sure to set the matching Cancellation Lead Time and select the appropriate Cancellation Policy.

   CellarPass will allow guests to modify, reschedule and cancel their reservations through My Account up until the cancelation lead time you have set for the experience. However, we recommend that you provide alternate contact options such as your phone number or tasting room email address to accommodate guest cancellation requests.

3. Valid Email Address
   1. Be sure to collect a valid email address for every reservation, especially if you charge in advance.CellarPass provides email status information that can help you prove a guest received their confirmation and if they opened it too. While the later is not as important it can aid your case in the future.
4. Check-in Guests
   1. The check-in feature is not there just to look pretty.This is an important part of the reservation transaction.When you check-in a guest you are validating they have received the experience “product” they paid for.
5. Receipts
   1. Receipts, especially signed ones are exceptionally helpful for chargeback disputes. This is a high value piece of compelling evidence.In today’s digital world more consumers are abusing chargeback claims stating they didn’t approve the charge.A signature the bestmethod to verify the card holder approved the charge. No signature = very little you can do to fight a chargeback.
   2. For those who are charging in advance, all hope is not lost. Onsite purchases are a fantastic way to obtain a guest signature on a receipt.This not only proves their physical presence on the reservation date, but they were pleased enough to make an additional purchase. Printing a chit (Table Pro) is another creative way to obtain the guest signature.This is great, as it lists the guest name, experience, number in the party and more. Just be aware that chits may include internal notes, so be wise about what you write in the notes.
6. Follow Up Thank You Email & Reviews
   1. Utilizing the available post visit follow up emails serve more than one purpose.Sure they are a nice way to send you guest a quick “thank you”, but they also encourage guests to leave a review.Reviews are available to view and manage in the back office.

You’ve done everything right. You are following all the suggestions provided, you showered your guest in gracious hospitality and everyone had a great time.  But wait!  Suddenly you receive a notice from your payment processor the guest has filed a chargeback claim, now what?  

Your payment provider will instruct you on how to respond and typically provide 2 options ACCEPT the claim in which case the funds will be refunded to the guest immediately or DISPUTE in which case you will need to provide compelling evidence. Be aware of the due date for filing your dispute, merchants usually have just a few days to file the dispute.

Next you will need to gather your evidence and depending on the reason claimed by the guest your evidence will vary.

Merchants will be required to provide “compelling evidence,” as outlined in the Visa Rules. If a merchant does not submit the required pieces of compelling evidence, it is unlikely that the card issuer will rule in the merchant’s favor.

Below are examples of compelling evidence most commonly

 Proof cardholder was in possession/using the merchandise or service

• Reservation history that shows the guest was checked in
• Signed receipt for the tasting fees
• Signed Chit that shows: Date, Card Holder Name, Experience
• Review written by guest that shows they enjoyed the experience
• Any other written evidence that shows the guest was onsite. 
• A guest folio or registration card filled out by the guest upon arrival
• Wine Club signup form
• Wine order form
• Guest book entry

For Ticketed Events

• Order history that shows ticket was checked-in
• Email delivery status that shows the printable ticket was successfully received by guest        

Proof of previous transaction for same merchandise or service

This is very helpful when “unrecognized charge” is the reason claimed.

• View reservation history for guest in CellarPass. For guests that are repeat visitors their past bookings will be visible. View the payment details for the past (undisputed) reservations
• Provide previous Transaction ID
• Provide previous transaction date
• Customer email address
• Customer phone number
• Proof of previous check-in for the reservation

Evidence recommendations for other common dispute reason codes:*

Misrepresentation

• Evidence (screen shot) of your well written Experience or Event description
• Evidence showing Terms & Conditions were clearly communicated to cardholder before the transaction was completed
• Summary of the situation. Guest cancelled after cancellation period had expired, were a no show, or did they participate in the event and drank every drop of wine poured.

Duplicate Processing

• For ticketed events it is not uncommon for guests to buy multiple tickets. If you know this was indeed the case, then you will need evidence showing cardholder intentionally made 2 separate transactions showing different confirmation numbers, dates and times of the transactions.

In April 2018, Visa announced its Visa Claims Resolution (VCR) initiative, designed to streamline and simplify the current Visa chargeback flow. The VCR initiative will restructure the dispute process from a litigation-based approach to a liability assignment process. This change will be implemented by Visa globally in April 2018. As a merchant account holder, you’ll continue to dispute chargebacks via your Payment Gateway or Processor as you already do. Rest assured, CellarPass provides you the tools you need to help manage these changes for your business.

The VCR was created with the following objectives:

• Improve chargeback-resolution time
• Reduce invalid disputes
• Define compelling evidence changes
• Simplify reason codes

Simplify reason codes

Under the VCR initiative, the current chargeback codes will now be consolidated into four categories:

10 Fraud

11 Authorization

12 Processing Errors

13 Consumer Disputes

These new categories were created to reduce the complexity of the current dispute process as well as to hold card-issuing banks to certain standards.

These are the new reason code categories implemented by Visa:

Fraud (10)

1010 – EMV liability shift counterfeit fraud

1020 – EMV liability shift non-counterfeit fraud

1030 – Other fraud card present environment

1040 – Other fraud card absent environment

1050 – Proof of recurring transaction history Visa Fraud Monitoring Program

Authorization (11)

1110 – Card recovery bulletin

1120 – Declined authorization

1130 – No authorization

Processing Errors (12)

1210 – Late presentment

1220 – Incorrect transaction code

1230 – Incorrect currency

1240 – Incorrect amount number

1250 – Incorrect amount

1260 – Duplicate processing / paid by other means

1270 – Invalid data

Customer Disputes (13)

1310 – Merchandise/services not received

1320 – Canceled recurring

1330 – Not as described or defective merchandise/service

1340 – Counterfeit merchandise

1350 – Misrepresentation

1360 – Credit not processed

1370 – Canceled merchandise/service

1380 – Original credit transaction not accepted

1390 – Non-receipt of cash or load transaction value

The following two reason codes are the most common and require compelling evidence:

• Fraud/card absent environment (1040)
• Merchandise/services not received (1310)

If a dispute falls into one of these categories, you must submit at least one of the following for these types of disputes. The items in bold are the most relevant to online reservations:

• Documentation to prove the cardholder is in possession of and/or using the merchandise
• Proof of a signed delivery form, or copy of customer ID as proof goods were picked up at your business location
• Proof of delivery to the address associated with an AVS matched response
• Proof of digital goods downloaded from a merchant’s website or application
• Proof of delivery and customer proof of employment at the delivery location (if delivered to a business address)
• Proof ticket was received or used
• Proof of a previous, undisputed transaction for the same merchandise or service
• Proof the transaction was completed by an authorized signer associated with the card holder
• Proof of a signed order form from a mail or phone transaction
• Proof of recurring transaction history

As always, CellarPass is here to help with any questions you may have in regard to these changes.

*Evidence provided in response to any dispute is in the sole discretion of the merchant.