Unfortunately, credit card companies have seen the number of chargebacks and disputes skyrocket over the last two years. Specifically, disputes associated with the 10.4 error code: Card not present. This is the most common error code when a buyer is attempting to commit friendly fraud. CLICK HERE to read our blog about friendly fraud. 

According to Chargeback Gurus, Visa recently updated their chargeback policy to help merchants retain more of their revenue when dealing with friendly fraud (chargeback fraud or Illegitimate chargebacks). Since each card provider has their own evidence requirements when it comes to fighting disputes, it’s important for sellers to understand what the issuer expects from them. 

Let’s look at some of the changes Visa is making to their charge back policy. 

According to Chargeback Gurus, Visa’s new policy will "...require merchants to provide records of two previous undisputed transactions using the same payment credentials.” This legitimizes the pending transaction, so long as the data provided by the merchant meets the following criteria:

1. The two previous transactions must be between 120 days and 365 days old as of the dispute date. Original credit transactions may be less than 120 days old.

2. The IP address must match across all transactions.

One additional element from the following list must also match across all three transactions: 

1. IP address,

2. User ID, or 

3. Shipping address.

How does this help AN sellers?

If you suspect a chargeback originates from a previously blocked bidder, email juli@auctionninja.com or support@auctionninja.com as soon as you become aware of the chargeback. Time is of the essence and card issuers do not give leeway in their deadlines. We will do our best to provide you with the necessary data to combat the dispute. 

Visa’s Compelling Evidence 3.0

Here are three things that Compelling Evidence 3.0 is meant to do for merchants: 

1. Specify and standardize evidence that is guaranteed to reverse/prevent a chargeback under reason code 10.4. 

2. Establish a direct relationship between the merchant and the cardholder.

3. Prove beyond a reasonable doubt that the disputed transaction was made by the cardholder and not an unauthorized third party.

Key takeaways: 

• Chargebacks and disputes are on the rise across the board.

• Sellers should know what constitutes a fraudulent dispute.

• Sellers should keep their eyes open for any changes in policy that might impact the evidence they need to provide when combating disputes. 

• Sellers should respond to chargebacks quickly – deadlines are firmly established by card issuers.

It is important to note that other card issuers will have other standards, requirements, and/or rules for processing chargebacks and disputes. Sellers should do their best to stay up-to-date on those. Although not always foolproof, as a general tip, sellers should follow the best practices outlined in Stripe's support material.  

Note: Vendors are responsible for researching the information required by issuing card companies for each individual dispute/chargeback and responding to those disputes in a timely manner. Card issuers can update their rules without notice or fanfare. AN is simply passing on information it is learning from third-party sources. AN cannot be held responsible for changes, updates, or errors in passing on information from this complex and ever-changing environment.

Written by:

Juli Dupont

May 1, 2023     Updated 01:06 PM

Juli is the customer success guru at AuctionNinja, specializing in helping sellers achieve maximum success on the platform. With a background in the estates and acquisitions department at AuctionNinja's parent company, BRG, Juli possesses a deep understanding of the challenges and dynamics of the auctioneering and estate selling industry. Her expertise makes her the go-to person for sellers navigating the ever-changing marketplace. Juli holds a Bachelor of Arts degree in English.

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