The Visa Acquirer Monitoring Program (VAMP) now treats fraud alerts differently than before, making chargeback alert programs for fraud useless.
Starting April 2025, TC40 fraud alerts resolved through Rapid Dispute Resolution (RDR) now count toward your VAMP ratio.
This means chargeback alerts for fraud reasons won’t protect businesses the way they used to. Previously, these alerts gave merchants a safety net, but that protection now works against businesses.
What VAMP Really Means for Your Business
VAMP combines five separate Visa monitoring programs into one unified system. The program tracks both fraud incidents (TC40s) and non-fraud disputes (TC15s) together in a single metric.
This consolidation sounds simple, but it creates new headaches for merchants who previously managed separate fraud and dispute ratios.
Visa designed VAMP to address four times more fraud globally, targeting over $2.5 billion in losses. The program monitors card-not-present transactions specifically, which covers most online business activity.
New Thresholds
The new VAMP thresholds are much stricter than what businesses faced before. Merchants now face a 2.2% threshold starting June 2025, dropping to 1.5% for some regions by April 2026.
Acquirers face even tighter restrictions as well, with thresholds as low as 0.3% in some cases. This puts pressure on payment processors to crack down harder on their merchant partners. When your acquirer faces penalties, they pass that pressure directly to you.
Enforcement Timeline
VAMP enforcement officially began October 1, 2025, after a six-month advisory period. The grace period ended, and now Visa assesses real fines and penalties for violations. First-time violators get a three-month grace period, but repeat offenses trigger immediate enforcement action.
KEEP YOUR CHARGEBACKS IN CHECK
Chargebacks Are Unavoidable
Chargebacks happen for multiple reasons, and merchants can’t prevent all of them.
What Triggers Chargebacks
Dissatisfied customers file chargebacks when products don’t meet expectations. Friendly fraud occurs when customers initiate chargebacks instead of requesting refunds through proper channels.
Legitimate fraud creates the most frustrating chargebacks for merchants. When criminals steal card information and make unauthorized purchases, the real cardholder files a chargeback to recover their money. Merchants lose both the merchandise and the payment in these cases.
Technical errors also trigger chargebacks. Double billing, incorrect amounts, or checkout glitches can all result in disputes. These processing mistakes are preventable but still occur regularly across all payment systems.
Why Chargebacks Are Unavoidable
Every business accepting card payments will face chargebacks. The payment system gives cardholders extensive rights to dispute transactions, and these rights can’t be eliminated. Cardholders can initiate chargebacks up to six months after a purchase, creating long-term liability for merchants.
Some chargebacks result from circumstances completely outside merchant control. Criminal fraud using stolen card data creates chargebacks regardless of merchant security measures. Family members making unauthorized purchases also trigger disputes that merchants can’t prevent.
The chargeback system favors cardholders by design. Banks err on the side of protecting their customers, meaning disputed transactions often get reversed even when merchants provide evidence. This built-in bias makes some chargebacks impossible to avoid or win.
The Real Cost of Chargebacks
Each chargeback costs merchants far more than the original transaction amount. The average chargeback costs $190 based on a $90 transaction value. This includes lost inventory, chargeback fees, administrative costs, and lost revenue.
Chargebacks also damage merchant reputation with processors and card networks. High chargeback ratios lead to increased processing fees, higher reserve requirements, and potential account termination. These secondary costs often exceed the direct financial impact of individual chargebacks.
PREVENT CHARGEBACKS, INCREASE CONVERSIONS
How VAMP Changes Chargeback Protection
RDR No Longer Shields Fraud Cases
Under the old system, RDR alerts for fraud cases didn’t count against merchant ratios. Merchants could resolve TC40 fraud alerts through RDR without impacting their monitoring status. This provided valuable protection for businesses dealing with legitimate fraud cases.
VAMP eliminates this protection. TC40 fraud alerts resolved through RDR now count toward your VAMP ratio. Only non-fraud disputes (TC15s) resolved through RDR still get excluded from calculations. This change makes fraud management much more challenging for merchants.
Enumeration Adds New Risk
VAMP introduces enumeration tracking as a new risk factor. Enumeration occurs when fraudsters test different card details combinations on merchant systems. High enumeration ratios indicate security vulnerabilities and attract additional scrutiny.
Merchants face penalties for enumeration activity even when they don’t approve the transactions. This creates liability for attempted fraud, not just successful fraudulent purchases. Businesses need stronger upfront fraud prevention to avoid enumeration penalties.
Alert Coverage Is a Necessity
Chargeback alert coverage becomes more important under VAMP. Alerts give merchants 72 hours to resolve disputes before they become official chargebacks. This early warning system helps avoid the chargeback entirely.
However, alert coverage varies significantly between different networks and regions. Ethoca and Verifi provide the main alert services, but neither covers all possible disputes. Gaps in coverage mean some chargebacks will always surprise merchants.
Best Practices for Managing VAMP Ratios
Follow our best practices to keep your VAMP ratio low and sales high.
Monitor Your Metrics Religiously
Track your VAMP ratio daily, not monthly. Waiting for monthly reports means problems can spiral out of control before you notice them. Daily monitoring lets you spot trends and take corrective action quickly.
Set internal thresholds below Visa’s official limits. If Visa’s threshold is 0.9%, set your internal alarm at 0.7%. This buffer gives you time to implement changes before hitting violation territory. Many acquirers now set merchant-specific thresholds even lower to protect their own portfolios.
Use analytics tools that break down chargebacks by reason code, product type, and customer segment. Understanding chargeback patterns helps identify root causes and target prevention efforts. Generic prevention strategies waste resources and miss specific problem areas.
Strengthen Fraud Prevention Upfront
Implement multi-layered fraud detection before transactions process. Address Verification Service (AVS), CVV checks, and 3D Secure provide basic protection. Advanced machine learning systems offer more sophisticated pattern recognition.
Block enumeration attempts aggressively. Use velocity rules based on device fingerprinting to identify card testing behavior. Blocking enumeration reduces your VAMP enumeration ratio and prevents successful fraud.
Review and adjust fraud rules regularly based on performance data. Rules that worked six months ago may need updates as fraud patterns evolve. Static fraud prevention becomes less effective over time.
Optimize Customer Experience
Clear product descriptions prevent “not as described” chargebacks. Include detailed specifications, measurements, and high-quality images. Set realistic delivery expectations and communicate any delays promptly.
Make refund policies transparent and easy to find. Train customer service staff to handle refund requests quickly and professionally. Making refunds easier reduces the likelihood customers will file chargebacks instead.
Improve order fulfillment processes to reduce shipping errors. Wrong items, damaged products, or missing orders all trigger chargebacks. Quality control in fulfillment directly impacts chargeback rates.
Use All Available Tools
Deploy Order Insight to provide transaction details during the pre-dispute phase. This tool helps resolve customer concerns before they escalate to formal chargebacks. Order Insight works particularly well for subscription businesses and digital products.
Implement Compelling Evidence 3.0 for fraud chargebacks where appropriate. This tool provides enhanced evidence submission for certain chargeback types. When used correctly, CE 3.0 can turn losing chargebacks into wins.
Sign up for both Ethoca and Verifi alert networks to maximize coverage. Each network covers different issuers and regions. Using both services provides the broadest possible alert coverage.
Subscription Business Specific Practices
Create clear subscription terms that customers must acknowledge during signup. Use checkboxes or pop-ups that require active confirmation. Ambiguous subscription terms lead to disputes when customers forget about recurring charges.
Send detailed receipts for every subscription charge. Include business name, contact information, subscription details, and cancellation instructions. Clear receipts help customers recognize legitimate charges on their statements.
Implement easy cancellation processes that don’t require phone calls or multiple steps. Difficult cancellation processes frustrate customers and increase chargeback risk. Make cancellation as simple as the original signup process.