Card Brand Monitoring Programs
We know that managing chargebacks and fraud can be intimidating. Here are a few common questions about Visa and Mastercard's monitoring programs:
- How do I know if I am in a monitoring program?
- What happens when my account enters a card brand monitoring program?
- How is merchant activity identified?
- How can I calculate my own chargeback ratios?
- Do Won chargebacks count against my chargeback ratio?
- Are pre-arbs and retrievals counted in my chargeback count?
- If I issued a refund on this transaction does it still count toward my chargeback count?
- Why are transactions processed in prior months included in the chargeback count for this month?
- What happens if I move from one threshold to another in a particular program?
- What is reported fraud?
- What is a Visa 10.5 Dispute Reason Code?
- Why do my numbers within Braintree vary from what the card brands reported in my identification?
- Are the program fines included in my Braintree chargeback fee?
- Can I be assessed program fines when my account is below the thresholds?
- Can I request the card brands monitor my activity differently than what is outlined here?
- How do I exit a card brand monitoring program?
If your account is provided through Braintree, our Disputes team will notify you if you’re ever identified in any card brand monitoring program. In fact, we do proactive monitoring to help in chargeback reduction and remediation. This team is a great resource for navigating and understanding these programs as well as their potential implications.
When your account enters a program, our Disputes team will reach out and offer to schedule a call to review the program details. The goal of the call would be to share our analysis and advice, including chargeback ratios, chargeback drivers, mitigation strategies, and program requirements/timelines. Throughout the course of the program, we’ll monitor the account and keep you updated on chargeback standings, account standing, possible fines, and ratios.
- Visa: merchant activity is identified by merchant descriptor
- Mastercard: merchant activity is identified by merchant account/MID
The formula for calculating your chargeback ratio is:
- Visa: count of chargebacks opened in a calendar month divided by the same month’s sales count (example: June chargebacks / June sales)
- Mastercard: count of chargebacks opened in a calendar month divided by the prior month’s sales count (example: June chargebacks / May sales)
Check out our blog post that reviews how you can calculate your ratios, and how Braintree can help reduce them.
Yes. Regardless of outcome, a chargeback is counted against your ratio.
No. Only first chargebacks count against your ratio.
Yes. If there is a chargeback against an already refunded transaction, it is counted against your ratio.
Per card brand rules, chargebacks are counted in the month they are raised, not when the transaction was processed. Many times, chargebacks are raised in the months after a transaction was processed.
If you meet or exceed a new threshold in a program, the identification month does not start over. This means if you move from Visa’s Standard threshold to the Excessive threshold or Mastercard's Excessive Chargeback Merchant (ECM) threshold to the High Excessive Chargeback Merchant (HECM) threshold, your identification month in the program does not begin again at month 1, instead you will continue to move forward in the program from your original identification month.
The fine enforcements when you move to a new threshold vary from Visa to Mastercard:
- Visa: once your account moves to the Excessive threshold, you will remain at that enforcement level until you exit the program entirely, even if you reduce down to the Standard thresholds
- Mastercard: your accounts will be assessed the applicable fines associated with the threshold and identification month in which you flagged. This means you could receive a fine for the High Excessive Chargeback Merchant threshold one month and the Excessive Chargeback Merchant threshold the following month, even though the Excessive Chargeback Merchant is a less severe threshold.
Reported fraud refers to disputed transactions plus any other transactions that cardholders reported as fraudulent to their card-issuing bank, even if the bank chose to write off the transaction instead of disputing it with the merchant.
A 10.5 Dispute Reason Code is a code that refers to fraud disputes where the card issuer was permitted to dispute the fraudulent transaction on behalf of the cardholder. Your account becomes eligible for 10.5 Dispute Reason Codes when you are in the Visa Fraud Monitoring Program. Check out this page for more information.
Chargeback numbers displayed in the Control Panel are considered estimates, as these will differ from the card network's official figures due to multiple factors, including timing differences in reporting, auto-representation, and multiple merchant processors.
No. Program fines issued by the card brands are supplemental fees which are not included in the chargeback fee.
No. Program fines can only be assessed when the account is over the thresholds and flagged in one of the program thresholds which carries non-compliance fine assessments.
No. By choosing to process Visa and Mastercard credit and debit cards, you agree to their mandated rules and regulations.
- Visa: your merchant account must be below the Standard thresholds for 3 consecutive months.
- Mastercard: your merchant account must be below the Excessive Chargeback Program (ECP) or Excessive Fraud Merchant Program (EFM) thresholds for 3 consecutive months.
If you have any other questions regarding these programs, Contact us.