They’re Not Chargebacks Anymore: Understanding VCR’s New Terminology
by Mike Pullen
In my last blog, we looked at some of the biggest changes brought about by Visa Claims Resolution (VCR) – a 2018 process overhaul designed to streamline the dispute process and speed up the resolution of chargeback claims. The first item on my list was terminology.
For the first time in decades, Visa has reinvented the very language of chargebacks. In fact, they aren't even called chargebacks anymore! Why would they do this? What other changes have they made? And, what does it mean for your business?
If you have no idea what VCR is, or how the business of chargebacks has changed in the past few months, I recommend you take a step back and watch our in-depth webinar on the topic, “What You Don't Know About Chargebacks Can Hurt You”. It's chock-full of great info. However, if you're ready to dive into the new chargeback dictionary, then read on.
Say goodbye to 'chargebacks'
Let's start with the biggest change first: Visa has ditched the term "chargeback” and has replaced it with “dispute”. There are a few reasons for this.
The first is to minimize any confusion. Everyone knows what a 'dispute' is – even if they don't work in payments. 'Chargeback' (as a term) is not always intuitive.
The second is to emphasize that the new VCR process has been designed to be fairer to merchants – by removing any implication that disputed money will automatically be 'charged back' to the merchant before liability has been confirmed.
No more 'representments'
This is another term that Visa has decided to abandon, because it's obscure and not easily understood by anyone other than payments experts. From now on, you can expect to hear people talking about 'dispute responses' instead. It's important to clarify, however, that the concept of a representment still exists as part of a dispute response: merchants can still challenge a dispute when they have the appropriate compelling evidence.
So long 'reason codes'
And finally, the term 'reason codes' has been dropped and replaced with 'dispute conditions'.
This doesn't just bring things in line with the other terminology changes, but is part of a broader overhaul of the way disputes are classified under VCR. Dispute condition categories have been streamlined to make it easier for people to identify the reason for the dispute, so they can take the right steps to resolve the issue.
What does this mean?
Although these terminology changes are revealing of the new chargeback (or should I say 'dispute') environment, there is very little serious impact for merchants, issuers, cardholders or anyone else. You won't need to update your reports or policies and there are no repercussions for failing to adopt these terms.
Will the other card brands follow suit and switch up their language, too? That has yet to be seen. And – truth be told – even if they did, long-time industry veterans like me will most likely continue to use the old terms in everyday conversation for a period of time until the new language becomes second nature.
Chargebacks by any other name sting just as badly
The rules have changed, and the lingo is new, but one thing remains the same: chargebacks are bad news. If you don't stay on top of ongoing developments, you can inadvertently put your business at risk.
If you need support deciphering these – and other – changes, our team is on hand to help you get the answers you need. So please, feel free to connect with one of our experts today. Or, go one step further and request a free chargeback assessment.