Understanding the Visa Chargeback Process
Visa is the leading digital payment network in the U.S., processing the highest transaction volume in 2022[1]. With so many transactions happening daily, issues like incorrect charges, undelivered products, and even fraud may arise—leading to customers requesting chargebacks.
Learning about the Visa charge dispute process helps you understand your rights as a consumer and take necessary actions to get your money back if you encounter a charge issue.
In this guide, we’ll break down the process of making a Visa chargeback claim and discuss the importance of virtual cards in safeguarding your payment information and avoiding chargebacks altogether.
Can You Initiate a Visa Transaction Dispute?
Yes, you can dispute a Visa transaction and request a chargeback if you paid with a credit, debit, or prepaid card and something went wrong with the purchase. Still, you should try reaching out to the seller first to resolve the issue. If that doesn’t work, your card issuer may assist you with the dispute.
Visa has categorized its chargeback reason codes into four primary groups[2]:
- Fraud transactions
- Authorization errors
- Processing errors
- Consumer disputes
Fraud Transactions
These chargebacks occur when a transaction is identified as unauthorized or involving a counterfeit card. This includes the following cases:
- A counterfeit chip card that isn't EMV-compliant is used at a merchant’s terminal.
- A genuine (non-counterfeit) card is used fraudulently, but the merchant didn’t process the transaction through an EMV chip-enabled terminal.
- A fraudster uses a stolen credit card at a retail store.
- A hacker steals credit card information and makes an unauthorized purchase on an e-commerce website.
- A merchant repeatedly allows transactions with stolen credit cards, triggering Visa’s fraud detection system.
Authorization Errors
These arise from issues related to transaction authorization. Some examples are:
- The merchant processed a transaction without authorization, and the card was listed in Visa’s Card Recovery Bulletin (CRB) as blocked or invalid.
- The transaction was completed after the issuer declined the authorization request, meaning the purchase shouldn’t have gone through.
- The merchant failed to obtain proper authorization, or they submitted the transaction after Visa’s required timeframe for processing.
Processing Errors
These codes apply when a mistake occurs during transaction processing. Unlike other dispute reasons, these scenarios follow Visa’s collaboration workflow, allowing both parties to respond before liability is assigned and the chargeback is finalized. Here’s the breakdown of the error codes:
- The transaction was processed with the wrong transaction type or code.
- The transaction was processed using the wrong currency.
- The transaction was processed with an invalid or incorrect account number.
- The same transaction was processed more than once.
- The cardholder paid using another method, but the card was still charged.
- The transaction contained incorrect or missing information.
Consumer Disputes
These chargebacks result from cardholder dissatisfaction or issues with the transaction on their side. Examples include:
- The cardholder did not receive the goods or services they paid for.
- The cardholder was charged for a subscription or recurring payment after canceling it.
- The product or service was significantly different from its description or was defective.
- The cardholder received counterfeit goods instead of authentic items.
- A promised refund or credit was not issued.
- The cardholder canceled an order but was still charged.
- The cardholder attempted to withdraw cash from an ATM but didn’t receive the full amount or any funds.
You typically have up to 120 days from the purchase date[2] to file a chargeback claim. However, if you suspect the retailer is going out of business or already has, it’s best to dispute the transaction as soon as possible. Visa will process your claim, but there’s no guarantee that you’ll win the dispute.
How To Dispute a Charge on Visa
The process to dispute a Visa charge depends on the type of card or the reason for the dispute. The only pre-requisite to start a chargeback claim is to contact the seller first to dispute the charge—without this step, you can’t proceed with the chargeback claim.
We’ve classified the dispute process into three categories:
- Visa credit card dispute process
- Visa debit card dispute process
- Fraud Visa transaction dispute process
Visa Credit Card Dispute Process
To initiate a dispute for a Visa credit card, follow these steps[3]:
- Check your statement and confirm that the charge is unauthorized or incorrect. Gather any relevant details, such as receipts or communications with the merchant.
- Reach out to your card issuer to report the issue. They may resolve it immediately or guide you through the next steps.
- Your financial institution will use Visa Resolve Online (VROL)[4] to check transaction details. If the issue isn’t resolved at this stage, they’ll file a dispute.
- As your dispute is under review, you may be issued a temporary credit equal to the amount of the disputed charge.
Visa Debit Card Dispute Process
The key difference between Visa credit and debit card payment disputes is in the way the money moves and the level of fraud protection[6]. Under the Fair Credit Billing Act[7], your fraud liability for credit cards is capped at $50, no matter the amount, as long as you report it within 60 days. In the case of debit cards, according to the Electronic Funds Transfer Act[8], your liability depends on how quickly you report the fraud, as outlined in the table below:
If you paid with a Visa debit card, you can dispute the charge by following these steps[6]:
- Report the dispute to your issuing bank via phone, online banking platform, or mobile app.
- Gather supporting evidence, such as receipts or order confirmations, emails or messages with the seller, and details on why the charge is being disputed.
- Submit the claim and follow up if your case is taking too long.
The Federal Trade Commission (FTC) recommends following up with a letter within 60 days of the first statement showing the disputed charge[7]. The bank has 10 business days (20 for new accounts) to investigate. If it rules in your favor, it must correct the error within one day. If the investigation takes longer, the bank may issue a temporary credit while the case continues.
Fraud Visa Transaction Dispute Process
If you’ve been a victim of fraudulent activity on your Visa card, you’re protected under Visa’s Zero Liability Policy[9], meaning you won’t be held responsible for unauthorized transactions and should receive a refund. However, it’s crucial to act quickly to minimize potential damage.
Fraud on your Visa card can result from various scenarios, including:
- Someone misusing your card as a result of card theft or loss
- Scammers skimming your card details at an ATM or payment terminal
As soon as you suspect fraudulent activity on your Visa card, follow these steps:
- Report it to your bank or card provider immediately so they can block your card and prevent further transactions.
- Monitor your statements regularly to look for any unfamiliar changes.
- Change passwords and set up additional security measures like two-factor authentication on your online banking accounts and apps.
What Happens After the Visa Chargeback Claim Is Submitted?
Once the chargeback claim is submitted, the card issuer assesses the claim and the evidence. If the dispute is deemed valid, the merchant’s account will be debited, and you may receive a provisional credit.
The merchant then has the option to respond and either acknowledge the chargeback as a result of fraud or merchant error or dispute its validity by submitting evidence supporting the transaction.
Once the merchant provides their response, the card issuer reviews the submitted documentation. If the merchant’s evidence is found to be sufficient, the dispute is overturned, and the funds are returned to the merchant.
If there’s still no agreement even after the card issuer steps in, Visa evaluates all evidence from both sides before making a final decision on which party is liable for the transaction.
Common Roadblocks in the Visa Chargeback Process
While Visa has a clear and straightforward chargeback process to dispute invalid transactions, the dispute resolution timeframe can vary significantly. While some cases may be settled quickly, others can drag on for weeks or even months.
Other challenges include:
- Meeting strict time limits for filing a dispute
- Collecting sufficient evidence to build a strong case
- Facing uncertainty, as there's no guarantee you’ll win the dispute
- Relying on the responsiveness of multiple parties, including the merchant, card issuer, bank, and payment network
Given these challenges, many consumers turn to virtual cards as a proactive way to safeguard their payment details and avoid filing disputes altogether. These cards let you shop online securely without revealing your actual payment card number, minimizing the risk of unauthorized charges and potential disputes.
Banks like Capital One and Citi offer virtual cards, but they often have limited features and fewer control options. For enhanced security and greater control over your transactions, consider using a reliable virtual card provider like Privacy. With Privacy, you can generate cards you can use for a single transaction or with a single merchant and set spending limits to avoid unauthorized charges.
Simplify Your Transactions and Avoid Disputes With Privacy
Trusted by over 250,000 users and accredited by the Better Business Bureau® (BBB), Privacy lets you generate unique 16-digit card numbers, expiration dates, and security codes for single or repeated transactions while keeping your real card details hidden.
After linking Privacy to your bank account or debit card, you can create three types of virtual cards for secure online purchases:
Privacy gives you control over your spending and helps safeguard against unauthorized charges by letting you:
- Set spending limits on your virtual cards, automatically declining any transactions that exceed the limit. This helps you avoid overcharges, duplicate payments, and hidden fees.
- Pause or close your virtual cards whenever you need to without impacting your linked funding source. This feature stops all future transactions, including any accidental or unwelcome charges.
Can You Dispute a Charge With Privacy?
If you're unable to resolve an issue directly with a merchant, Privacy makes it easy to dispute an invalid charge. Here's how to file a dispute:
- Log into your Privacy account
- Locate the transaction you wish to dispute
- Click on "Open Dispute" at the bottom of the transaction pop-up
- Follow the steps to submit your claim
After submission, Privacy’s fraud protection team will review your claim. If it's deemed valid, they’ll initiate a chargeback against the merchant. However, it’s recommended to wait five days after reaching out to the merchant to check if a refund has been processed before filing the dispute.
Additional Features by Privacy
Privacy offers several helpful features designed to make your online transactions more convenient and secure. For example, the Privacy Browser Extension works with major browsers like Firefox, Chrome, Edge, and Safari (or Safari for iOS) and helps you automatically fill in your virtual card details at checkout for faster and more secure payments.
You can also download the Privacy App on your Android or iOS device to effortlessly create, manage, and track your virtual card activities while on the go. With transaction alerts enabled, the app sends push notifications to keep you informed of any potentially suspicious activity whenever a charge or decline occurs on your Privacy Cards.
Additional features that make Privacy even more convenient include:
- 1Password Integration—Easily manage both your passwords and payment information in one place with Privacy’s seamless integration with 1Password.
- Card Notes—Attach custom labels to your virtual cards for easy identification, such as tagging a card for "Subscription Services" to quickly track its use.
- Shared Cards—Securely share your virtual card details with trusted friends or family to enable easy budget sharing while keeping full control over the card.
Getting Started With Privacy
To begin using Privacy, you need to be a U.S. resident over 18 years old with an active account at a U.S. bank or credit union. Follow these easy steps to get your first virtual card:
- Visit the sign-up page to create your account
- Complete identity verification by submitting your details
- Link your funding source, such as a debit card or bank account
- Request and generate your first virtual card
Privacy offers four plans to meet the needs of different users, as shown in the table below:
