If you've ever looked at your chargeback numbers and felt a little nervous, you're not alone. Visa’s keeping an eye too. When things get out of hand, they don’t just watch quietly. That’s where the Visa Dispute Monitoring Program comes in. In our guide, we break it all down for you.
Let’s walk through what it is, how it works, and how to stay on the right side of it.
Chargebacks According to Visa
Let’s start with the basics. A chargeback isn’t just a refund. It’s a dispute, and it comes straight from the customer’s bank. Visa explains it as a way for the card issuer to reverse a transaction when a cardholder raises a concern.
There are a few common reasons this might happen. Maybe the transaction didn’t get proper authorization. Maybe the card was expired. Or the customer just didn’t recognize the charge, couldn’t reach support, or felt misled by the product or process.
Visa also takes your policies into account—things like return windows, refund terms, or how clearly you explain cancellations. If those are confusing or hard to find, disputes become more likely. When your communication is solid, and your service is reliable, chargebacks tend to stay low.
What Exactly is the Visa Dispute Monitoring Program?
The Visa Dispute Monitoring Program, or VDMP, is Visa’s way of responding when your chargeback rate gets too high. If your numbers pass a certain limit, you get placed in the program. From that point on, your dispute activity is tracked more closely.
Visa generally sees high chargebacks as a sign that something’s broken. Maybe chargeback fraud isn’t being filtered out well enough. Maybe your billing setup is messy. Or it could be customer support delays, marketing that overpromises, or delivery issues causing frustration.
Whatever the cause, they expect you to fix it. You’ll need to work with your acquiring bank to figure out what’s going wrong and come up with a plan. The longer the problems stick around, the more pressure you’ll feel. At a certain point, Visa adds fees for every additional dispute you get.
Understanding the Risk Thresholds
Visa doesn’t treat every case the same. Your place in the program depends on how many chargebacks you’re getting and how that compares to your total transactions. There are different levels based on risk, and they come with different expectations and consequences.
Here’s a quick look at the categories:
If you’re in the Early Warning phase, it’s a sign you’re close to crossing the line. Think of it as a nudge, not a penalty. But once you’re officially placed in the program, things change. If you stay above the threshold for four months or more, you’ll start to see fines. The Excessive level is the most severe, and it comes with the steepest penalties.
The longer you're in the program, the more pressure builds. That’s why early action really matters.
How Does the Visa Dispute Monitoring Program Work?
When your chargeback ratio crosses Visa’s thresholds, you don’t just get a warning and a shrug. You get enrolled in a system that keeps track of your activity and expects you to fix what’s going wrong.
Here’s how the whole process plays out.
Enrollment
It starts with a notice. You’re notified that your dispute ratio has gone over the limit, and now you're in the program. From there, your acquiring bank steps in. They’re your main point of contact and the ones who help you build a plan to reduce your chargebacks.
The information Visa tracks includes your transaction volume, dispute count, and how long you've been above the allowed ratio. You don’t need to sign anything to be enrolled. Once the numbers hit the limit, you’re in.
Tracking
Once enrolled, your dispute activity is monitored every month. Visa watches your total number of chargebacks, your ratio, and how those numbers change over time. The longer you stay over the line, the more serious the consequences get.
They’re not just looking at totals. Merchants with both online and in-store sales are expected to track disputes separately by channel. You should also keep a close eye on disputes by order type — like phone orders, internet orders, or subscriptions — since each comes with its own risks.
Detection
The system flags you based on a few key patterns. Too many disputes in a short window. A ratio that doesn’t come down. Sudden spikes in customer complaints or fraud.
Visa doesn’t just rely on one signal. They look at a mix of your past behavior, dispute trends, and the conditions that caused the chargeback. It’s up to you to dig into the details and figure out why the disputes are happening in the first place.
Notification
You’ll receive alerts through your acquirer when your status changes. That might be a bump to a higher tier or a new requirement, like submitting documentation or participating in a review.
Notifications typically come through email or merchant dashboards. It’s your job to stay on top of them. Missing a notice could mean missing a deadline, and that opens the door to fees and restrictions.
Follow-Up
Once you’re in the program, it’s not just about watching numbers. You’re expected to take action.
You and your acquiring bank should be reviewing dispute data, identifying the root causes, and putting solutions in place. This could include updating product descriptions, tightening up return policies, improving fraud filters, or making customer service easier to reach.
Some programs offer tools to help you track your progress. Legal support may be available if you’re dealing with disputes that involve compliance or contract issues. And if you’re making solid changes, your acquirer can advocate for you during reviews.
Fines Merchant Can Be Charged Under the VDMP
Visa’s fine structure is based on both your risk level and how long you’ve been in the program.
- Early Warning: No fines here. Just a heads-up.
- Standard Level: No fines for the first four months. Starting in month five, each chargeback comes with a $50 fine.
- Excessive Level: The $50 fine per dispute starts immediately.
- Month Ten Onward: You may be required to go through an audit. Merchants outside the EU could face a $25,000 review fee.
- After One Year: If you haven’t resolved the issue, Visa has the option to ban you from its network. That means you won’t be able to accept Visa payments at all. Some acquirers may shut your account down even sooner.
It doesn’t happen to everyone. But for retail merchants who rely on Visa, getting dropped from the network can be devastating. That’s why it’s important to act fast and get your ratio down.
How to Get Out of the Visa Dispute Monitoring Program
There’s only one way out, and it’s not instant. You need to get your dispute ratio below the standard threshold of 0.9% and keep it there for three straight months.
To do that, the first step is always the same: work with your acquiring bank. They’ve seen this before, and they’ll help you come up with a strategy. The best plans are rooted in data. Review your chargebacks closely. Look at where they’re coming from and why. Then, tackle the weak points one by one.
Visa recommends breaking your dispute data down by transaction type, channel, and root cause. That lets you pinpoint where the friction is and fix it before more disputes come through.
Track your progress, keep communication open with your acquirer, and focus on rebuilding trust. Once you’ve shown three clean months, you’re out. If you’re looking for more actionable tips that actually work, we made a different blog about how to avoid the Visa Dispute Monitoring Program.
It’s not easy, but it’s doable. And it’s definitely worth it.
Frequently Asked Questions
Why was my business placed in the VDMP?
You were likely placed in the program because your chargeback ratio went above Visa’s allowed limit. It’s a signal that there may be issues with fraud, customer service, billing, or delivery.
What is the dispute threshold for the Visa monitoring program?
Visa looks at both your monthly dispute count and your dispute ratio. You may get flagged if you receive over 100 disputes in a month with a ratio higher than 0.9 percent. For the Excessive level, it’s 1,000 disputes and a ratio of over 1.8%.
What happens once I’m placed in the VDMP?
Visa will begin monitoring your dispute activity closely. You’ll need to work with your acquiring bank to identify the cause of your disputes and create a plan to fix the problem. If the ratio stays high, penalties follow.
What are the penalties or fines in the Visa Dispute Monitoring Program?
There are no fines in the Early Warning phase. At the Standard level, fines start after four months and are $50 per dispute. In the Excessive category, that $50 fine applies right away. Long-term noncompliance could lead to audits or removal from the Visa network.
How long does it take to exit the VDMP once I’m enrolled?
To exit, your chargeback ratio needs to stay below 0.9 percent for three months in a row. That’s the only way out, so tracking and reducing disputes consistently is key.
Need Help Staying Out of the VDMP?
Getting placed in the Visa Dispute Monitoring Program is stressful. Staying in it is worse. But with the right tools and habits, you can keep your dispute rate under control and avoid hitting those thresholds again.
That’s where Chargeblast can help. We make it easier to track chargebacks in real-time, spot patterns, and take action before things get out of hand. You get insights you can actually use without digging through spreadsheets or crossing your fingers every month.
Whether you’re trying to recover from a rough quarter or just want to make sure you never end up in the VDMP, having a system in place makes all the difference.
You’ve got a business to run. We’ll help you keep it moving without chargebacks dragging it down.
Chargebacks Creeping Up? So is Visa.
Stay ahead of the curve with Chargeblast’s real-time alerts that stop disputes before they start. Request a demo below or get started yourself, and let us show you how to protect your revenue, your reputation, and your place outside the VDMP.
