Visa Dispute Rules Update

In January, Visa issued a set of new updates and clarifications to their dispute rule language. The following updates should be of particular interest to merchants.

• Travel-Related Disputes
• Use of Compelling Evidence
• Credits & Reversals Processed Prior to Disputes
• Wait Time Limits for Cancelled Merchandise or Services

Travel-Related Disputes

This rule change relates to changes to the travel industry due to the COVID-19 pandemic. The sudden cancellation of most forms of travel in spring 2020 and the continued uncertainty since then have resulted in a high volume of disputes and refunds in the travel industry. One of the byproducts of that phenomenon is an increase in cases where a consumer is refunded twice, once by the travel agent and a second time by the travel service provider.

In order to limit this mistake in the future, all such disputes—which fall under “Dispute Condition 13.1 (Merchandise / Services Not Received) for Merchant Category Code 4722 - Travel Agencies and Tour Operators”—will be slightly delayed such that, before initiating the dispute, the issuer must wait until 30 calendar days have passed since the merchant cancelled the service.

This rule change takes effect for all disputes processed on or after October 16, 2021.

Use of Compelling Evidence

This rule change relates to what information is required from issuers in the pre-arbitration stage of a dispute. For disputes that fall under “Dispute Condition 13.1 (Merchandise / Services Not Received)”, the current dispute rule language only requires issuers to address the information provided by acquirers during pre-arbitration if that information meets the allowable use of compelling evidence. This rule is being changed so that the issuer will be required to address all of the information that the acquirer supplies that supports the contention that the cardholder received the merchandise or services purchased at the agreed location and/or time.

This rule change does not relation to other dispute conditions. It takes effect for all disputes processed on or after October 16, 2021.

Credits & Reversals Processed Prior to Disputes

This rule change relates to circumstances in which a credit is processed prior to a dispute but the issuer does not address why that does not resolve dispute. Visa claims that it has seen an increase in the frequency of such occurrences. Often issuers will offer what are effectively non-explanations such as, “credit does not apply.” This does not fulfill Visa’s requirements.

The rule change requires that, if a credit is processed before a dispute, the issuer must either apply those credits to the disputed transaction or certify which transactions were credited and explain why those credits do not resolve the disputes. This rule change takes effect for all disputes processed on or after October 16, 2021.

Wait Time Limits for Cancelled Merchandise or Services

This rule change applies specifically to “Dispute Condition 13.7 (Cancelled Merchandise / Services)”. It requires issuers to wait 15 calendar days from the date that the merchandise or services were returned or cancelled before initiating a dispute. This is to allow merchants enough time to issue credits and ensure that all time limit restrictions are aligned. This rule change takes effect for all disputes processed on or after October 16, 2021.

Furthermore, that same dispute condition will be updated to require issuers to provide disposition of merchandise in circumstances in which merchants refuse to return merchandise, refuse to provide return merchandise authorization, or inform cardholders not to return merchandise. This rule change takes effect on April 17, 2021.

Get more information about these and other Visa rule changes.