Chargeback Ratio Explained: VAMP, VDMP, and What Underwriters Actually Watch

The formula

Chargeback ratio = (chargebacks in the current month) ÷ (sales transactions in the current month) × 100. Visa measures it on count, not dollars. A merchant with 1,000 transactions and 10 chargebacks has a 1.0% ratio — over threshold regardless of average ticket.

VAMP — the program that matters in 2026

Visa Acquirer Monitoring Program (VAMP), which absorbed VDMP in 2025, sets the enforcement thresholds. Standard tier kicks in at 0.9% of transactions or 100 disputes per month, whichever is lower. Above 0.9% you'll see fines starting at $10 per dispute and rising. Sustained above 1.5% will get the MID terminated and routed to the MATCH list.

Disputes ≠ chargebacks (and why it matters for alerts)

A dispute is the customer's first action — they call the issuing bank and say "I don't recognize this charge." If the merchant refunds inside the dispute window (typically 24–72 hours via Verifi RDR or Ethoca alerts), it never converts to a posted chargeback and doesn't count toward the ratio. This is why chargeback alerts are the single highest-ROI tool for high-risk merchants. A 1.2% raw dispute rate can be kept at 0.6% post-alert.

Four levers that actually move the ratio

1. Soft descriptor + customer support phone. "ACME*SUPPORT 248-264" recovers 15–30% of "I don't recognize this charge" disputes before they hit. Bare DBAs cause friendly fraud.
2. Verifi RDR + Ethoca alerts. Refunds an alerted dispute inside the window and removes it from the count. $20–$40 per alert is cheap insurance.
3. Continuity disclosure. If you bill recurring, the first rebill should trigger an email 3 days prior with cancellation link. Halves "didn't authorize this charge" disputes on day 30.
4. 3D Secure 2 on the riskiest BINs. Pushes liability to the issuer on authenticated transactions. Especially valuable on international and high-ticket.

What underwriters look at beyond the raw ratio

Banks care about trend more than snapshot. A merchant at 1.1% trending down for three months looks healthier than one at 0.7% trending up. They also look at fraud-coded chargebacks (4837, 4863) separately from service-coded (4853, 4855) — fraud-coded over 0.65% triggers separate enforcement under Visa Fraud Monitoring.

If you're already over

The fastest path back: turn on alerts immediately, audit your descriptor, kill the highest-dispute SKUs or traffic source for 30 days, and bring the trend down. We've helped merchants get from 1.8% to 0.6% in two months — but it requires acting before the acquirer sends the termination letter, not after.