As an online seller, chargebacks are a big part of running your business. Whether it’s managing disputes from unhappy customers, increasing processing fees, or mitigating disputes from legitimate card-not-present (CNP) transactions, staying on top of chargebacks is critical.
When it comes to scaling your business, how you manage chargebacks can play an important role in profitability.
Understanding chargebacks can be complicated, and for the purposes of helping you get up and running fast let’s focus on the basics. Different than a refund, a chargeback, also known as a payment dispute, is taken care of by the credit card issuer or bank.
A retrieval request, also known at some banks as “soft” chargebacks occur when the credit card issuer notifies the merchant to get more information about a transaction charged to a customer.
Customers under the Fair Credit Billing Act, have the right to dispute certain charges within 60 days when they appear on their billing statement.
As a merchant, you’ll be notified of the chargeback claim and given the opportunity to provide a response. If you don’t respond, the chargeback is typically granted and you’ll be responsible for the loss.
There are 3 sides to every chargeback story — what the merchant says, what the customer says and finally, what actually happens, determined by the card issuer or bank.
As more people continue to shop online, the number of chargebacks filled is also on the rise. For better or worse, effectively managing charge disputes is what allows everyone to stay profitable and protected.
For this reason, Visa launched its new Visa Merchant Purchase Inquiry (VMPI), part of its earlier launched Visa Claims Resolution (VCR) initiative. Getting a front row seat to customer disputes as they come in to strengthen the validity of claims related to its card products, and not simply relying on banks to determine refunds.
Chargeback Alerts (VMPI)
What is VMPI, how does this program help you manage chargebacks?
VMPI gives you, the seller, the opportunity to provide an instantaneous digital response (aka compelling evidence) in response to the cardholder complaints during the inquiry stage.
The VMPI integrated solution means you’ll be able to stop potential chargebacks before they’re filed by customers.
The process is similar to the retrieval inquiry system (“soft” chargeback inquiry), but there are two key differences:
- VMPI is an entirely digital process
- The decision is managed and determined by Visa
- The Dispute Inquiry is sent to Visa (from the issuing bank), and then Visa will pass the inquiry to our integrated partner Chargebacks911
- If the merchant does not have VMPI chargeback alerts, the inquiry will most likely escalate to a chargeback
- If the merchant is enrolled in a VMPI chargeback alerts program, Chargebacks911 creates a digital evidence packet (automatically) containing all transaction information and supplemental order data
- Visa reviews the digital evidence packet and makes a decision
The core benefits to utilizing chargeback alerts (combined with VMPI) is that you’ll reduce Visa chargebacks, hard counts, and duplicates, mitigating revenue lost to chargebacks.
LimeLight x Chargebacks911 – VMPI Partners
To bring this integrated service to LimeLight customers, we’re partnering with industry leader Chargebacks911.
When making the decision to enroll in VMPI Chargeback Alerts, it is easy! You’ll proactively mitigate a percentage of your chargebacks with no additional work. LimeLight clients have access to all of our partners and services. If you use VMPI Alerts the only cost to you is $25 for each successful chargeback that’s blocked from going to your processor.
For every Dispute Inquiry resolved through VMPI Chargeback Alerts, you can avoid:
- Chargeback fees assessed by the acquiring bank
- Operational costs of erroneous disputes
- Negative contributing costs to increased processing fees
When you think about it, $25 is a great investment to mitigate much larger costs to your business if not resolved.
Still curious about this new program, download Chargebacks911 VMPI white paper and learn more.