For many, the economics of chargeback management shifted in April 2025 when Visaโs VAMP program introduced rule changes designed to force faster and more judicious merchant responses. These changes are just the latest iterations of a long-term trend where card schemes have gradually increased fees and shortened response windows. But what can merchants do about it?
At Justtโs ChargebackX 2025 conference, Worldpayโs Director of Product Kimberly Singleton spoke about strategies that can curb chargeback volumes and help merchants to meet increasingly strict deadlines. This article outlines the specific pain points merchants now face, and Singletonโs expert advice for getting back on track.
Mounting Pressure: Visa and Mastercard Fees
In addition to the notable Visa Acquirer Monitoring Program (VAMP), in April this year Visa announced a host of additional rule changes for Visa merchants and acquirers. One of the costliest rules introduced was a $7 fee for chargebacks that expire without merchant response โ more than doubling the previous $3 penalty.
Perhaps the greater challenge is the fees placed on responding after the first 10 days. To avoid those fees, evidence gathering, transaction research, and representment assembly must now be completed in a third of the time they were formerly allocated.
Mastercard takes a different approach, penalizing ineffective representments rather than delayed responses. Their $15 pre-arbitration fee applies when merchants represent a case but then accept defeat if the case goes to the pre-arbitration phase. The message is that if you’re going to fight, you need to be sure you have the right evidence to win.
The Mastercard network has also streamlined certain dispute reason codes in issuersโ favor. For authorization and EMV-related reason codes, issuers can skip straight to arbitration if they deem a merchant’s response insufficient, and with arbitration fees exceeding $500, the stakes for getting responses right have never been higher.
Itโs important for merchants to note that these fees originate from the card schemes and are passed on to acquirers. As such, merchants should check whether their acquirer is passing these fees down to them, and whether thereโs room to negotiate the terms.
But negotiating fees is just one lever. What can merchants do to protect themselves against these penalties?
Use the Full Spectrum of Pre-Dispute Tools, But With Some Caveats
Pre-dispute solutions promise to stop chargebacks before they happen, but success depends on matching the right tools to your business model, and using them strategically.
Ethoca Alerts and Verifi CDRN are common pre-dispute solutions that provide advance warning of incoming chargebacks in exchange for issuing refunds between 48-72 hours from receiving the alert. As Singleton remarks, the value of these tools may extend well beyond chargeback avoidance: โIf you’re delivering physical goods, you may be able to prevent order fulfilment by getting these alerts earlier, ensuring that you don’t lose a product as well as the transaction valueโ.
However, these solutions require dedicated resources. “These are not like a set-and-forget product,” Singleton warns. “You have to review the alert and take action. That’s a strain on your capacity.” Merchants should also avoid reflexive refunding. Singleton advises that merchants “Don’t just blindly refund every dispute alert. Review them. The risk of chargeback is sometimes worth it.”
Data is Your Saving Grace. Collect It and Use It
Comprehensive data collection forms the foundation of effective chargeback management; many disputes can only be solved with extensive evidence. “We know fraud and authorization is all about the data,” Singleton notes. “Make sure you have easy access to that data to support your chargeback responses.”
While most merchants are aware that responses are highly data-reliant, fewer take the importance of pre-dispute tools into account. Singleton emphasizes that โinquiry products are driven on data. They are effectively worthless unless you have the data that makes them valuable.”
Multi-acquirer merchants need to think carefully when navigating this challenge. “Some merchants will get an ARN (acquirer reference number) from one acquirer but not from the other. This means that they will struggle to find associated transaction data.” The implication is clear โ smart multi-acquirer merchants need to search for ways to consolidate their data across the board, or face the penalties.
Choose Carefully When Considering Outsourcing or Chargeback Management Tools
Outsourcing decisions involve more nuanced considerations than simple cost comparisons โ especially given Visaโs new fee structures. Singleton explains that โMany merchants simply don’t have the capacity to effectively and efficiently manage chargebacks. They might throw lots of responses out, but they donโt stick, resulting in high loss rates.”
Of course, the predominance of manual, template-based systems means that many outsourced solutions face the same problems with volumes and quality fluctuations. This often leads to the cost of labor being passed on to the merchant, who is left with little to show for it.
Singleton identifies success-based fee models as an excellent way to ensure that your external chargeback solution is actually delivering on revenue retention. However, she insists that merchants must choose carefully. “Look at your incoming disputes,” Singleton advises. “What are you winning today versus what the provider is promising? Maybe they’re promising a 50% win rate, but they’re going to keep 25% of what they save you. Which one’s higher?”
Automate Acceptance and Response for Best Results
Visaโs increased expiry fees and increased fees for late responses arguably make some form of automated acceptance essential for maintaining profitability โ but only for cases that deserve it. “Consider all aspects of the dispute,” Singleton recommends. “Consider the dollar amount, consider the merchant, and consider the reason code.”
Small-value disputes often make the most sense for automatic acceptance. “Is my employee’s time working this chargeback really going to make a difference with a $5 dispute?” Singleton asks. “If that’s a true fraud chargeback for $5, it’s not worth fighting.โ The key is avoiding blanket policies: “I don’t recommend a set-and-forget rule, but maybe it’s automation for every $5 chargeback or under for 10.4 or 4837 reason codes.โ
(Of course, with Justt – which is a fully automated system where the marginal cost of handling another dispute is zero – your calculus might be different, and you would lean more towards disputing every winnable case and only accepting chargebacks where you are more likely to lose a dispute.)
Where dispute volumes are high, Singleton advocates for smart solutions: “Look at things like AI-driven winability scoring to focus on efforts where they will be most effective. This means you win what you know you can win, and forfeit lost causes, which will vastly reduce your risk of chargebacks fees.”
For disputes worth fighting, automation ensures deadline compliance while maintaining quality. Modern solutions such as Justt will automatically gather evidence, create customized representments, and submit responses โ all while conducting A/B testing to optimize future performance. “These things learn over time,” Singleton explains. “They will adjust your response to help boost your win rate. They see what works, what doesn’t, adjust accordingly.”
This is particularly useful for dealing with varying issuer demands. As Singleton explains, โDifferent issuers prefer data in different orders. Some want the data quick and concise, and some want pages of documentation. AI and machine learning-based solutions really come into play here, because they can learn individual issuersโ preferences and respond in kind.โ
Staying Ahead of the Curve
If decades-long trends persist, response windows will only tighten further while fees keep rising. While Singleton advises that smart chargeback management, automated acceptance strategies, and data collection are key parts of the solution, she advocates awareness as a first line of defense: “Keep up to date with chargeback rules, and ensure you understand them fully. They update twice a year in April and October. Theyโre ever changing.”
