Visa Chargeback Monitoring Program Has a New Twist

Visa Chargeback Monitoring Program Has a New Twist

There is a new twist to the Visa Chargeback Monitoring Program.

It is mindful of a scene in the 1978 film Animal House, where Faber College Dean Vernon Wormer is plotting with do-gooder Greg Marmalard to do away with the Delta fraternity.

Marmalard: But Delta’s already on probation sir.

Wormer: They are? Well as of this moment they’re on double secret probation.

Marmalard: Double secret probation sir?

Wormer: There is a little-known codicil in the Faber College constitution which gives the dean unlimited power to preserve order in time of campus emergency. Find me a way to revoke Delta’s charter.

The New Addition to the Visa Chargeback Monitoring Program

Roughly a year ago, Visa sent shockwaves through the credit card processing industry when it announced it was cutting its chargeback and fraud threshold from 200 chargebacks per month and 2 percent of sales to 100 per month/1 percent worldwide. It meant a seismic change for high risk merchants in industries that typically suffer from high chargeback rates: tech support, nutraceuticals and pharmaceuticals as well as any merchant offering free trials, subscriptions and recurring billing.

Presently, Visa has implemented a pre-monitoring program (hence our double secret probation reference) for businesses that hover near the 1 percent and 100 chargebacks per month limit – 0.75 percent and 75 chargebacks per month, to be exact. Merchants who edge toward this new threshold won’t be fined or subject to any fees, but will receive a formal warning from Visa.

What This Means for High Risk Merchants

When we blogged about the significant change to the Visa Chargeback Monitoring Program a year ago, we offered a quote from Instabill Sales Manager Wendy Jacques. It is as prudent, if not more so, today as it was then.

“I think merchants with high chargeback rates simply have to become more responsible business owners,” said Ms. Jacques. “It is going to be a lot easier to get shut down.”

According to an excellent article by Gina Lucas of Chargeback Gurus, merchants should expect Visa to make their chargeback guidelines consistent across the U.S., Europe, Asia and everywhere else. And whichever region has the most stringent guidelines will become the standard.

Fight Chargebacks With Instabill

When merchants sign on with Instabill, we offer the tools needed for businesses to succeed and thrive. Those tools include our website, an online guide to chargeback prevention, mitigation and even reversal.

Get a head start today at, or simply contact us at 1-800-318-2713 or the live chat option below.

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