As of April 2022, Visa and Mastercard have made some changes to their chargeback policies. These changes may affect your business, so it’s important to be aware of them.
One of the biggest changes is the introduction of chargeback limits. This means that cardholders will only be able to dispute a certain number of charges per year. The limit will be set at 4 per year for Visa and 6 per year for Mastercard.
This change is designed to cut down on fraudulent chargebacks, which cost businesses billions of dollars every year. It will also make it easier for businesses to manage their chargebacks, as they will no longer have to deal with an unlimited number of disputes.
If you’re a business that accepts Visa or Mastercard, you need to be aware of these changes and make sure you understand how they will affect you. Chargeback limits will start being applied from April 2022, so you need to be prepared.
Talk to your payment processor or acquirer about the changes and make sure you have a plan in place to deal with them.
Why Chargeback Limit is Required?
As mentioned before, chargebacks can be very costly for businesses. They can also be time-consuming and difficult to manage. By introducing chargeback limits, Visa and Mastercard hope to cut down on the number of chargebacks, which will save businesses money and make it easier for them to manage their disputes.
What is the Limit for Merchants to Dispute a Claim?
The chargeback limit will be set at 4 per year for Visa and 6 per year for Mastercard. This means that cardholders will only be able to dispute a certain number of charges per year.
What Happens if I Exceed the Chargeback Limit?
If you exceed the chargeback limit, you may be subject to fees or other penalties. This will depend on your acquirer or payment processor, so you should check with them to find out more.
How Can I Avoid Chargebacks?
There are a few things you can do to avoid chargebacks. First, make sure you have clear and concise policies in place that explain your refund and return policy. Make sure these policies are easy to find and understand.
Second, always provide excellent customer service. If a customer has a problem, try to resolve it before they resort to filing a chargeback.
Third, keep good records of all your transactions. This will help you defend against chargebacks that are filed fraudulently.
Finally, consider using a chargeback prevention service. These services can help you identify and stop chargebacks before they happen.
What Factors Can Alter a Chargeback’s Time Limit?
There are a few factors that can alter the time limit for filing a chargeback. First, if the cardholder disputes the charge within 120 days of the transaction, they will have up to 180 days to file a chargeback.
Second, if the cardholder disputes the charge within 120 days of receiving their statement, they will have up to 540 days to file a chargeback.
Third, if the cardholder disputes the charge after they have received their statement, they will have up to 120 days to file a chargeback.
Finally, if the cardholder disputes the charge after they have been issued a credit or debit card, they will have up to 365 days to file a chargeback.
These time limits can be altered by the card issuer, so it’s important to check with your bank or credit card company to find out more.