Chargeback Ratio Limits for 2026 and How to Stay Under Them

A chargeback is a card payment reversed by the customer's bank after the customer disputes it. Your chargeback ratio compares those disputes to your sales for the month. Visa and Mastercard count different things, so work out each one separately.

Visa (the VAMP ratio). VAMP is the Visa Acquirer Monitoring Program. It replaced Visa's separate dispute and fraud monitoring programs in 2025. Its formula is:

(Fraud reports + disputes) ÷ settled card-not-present Visa transactions

• Fraud reports (called TC40s) are filed by the customer's bank when a cardholder says a charge was fraud. They count even if no chargeback follows, and even if you refund the sale.
• Disputes (TC15s) are the chargebacks themselves. Because Visa adds both counts together, one fraudulent sale that gets a fraud report and a dispute can count twice.
• Only card-not-present sales go in the bottom of the fraction. In-store card sales don't dilute your ratio.
• Two things are left out: disputes resolved through Visa's pre-dispute tools, and fraud reports that qualify for Compelling Evidence 3.0. Both are explained below.

Mastercard. Mastercard divides this month's chargebacks by last month's Mastercard transactions. That one-month lag matters. After a busy month, the ratio looks low. After a slow month that follows a busy one, it can jump, because the chargebacks from the busy month land on a smaller base.

Worked examples:

Your processor's reports or your gateway's dispute history will give you the counts. Check them every month, not only when your processor calls.

These are the chargeback thresholds for 2026 that decide whether you land in a card-network monitoring program. Both parts of each limit must be met: the ratio and the monthly count.

Last checked: September 27, 2026. Sources: Visa's VAMP fact sheet (2025) and Mastercard's Security Rules and Procedures, Merchant Edition (August 4, 2026). Mastercard's program manual isn't public, so its ECM and HECM numbers come from acquirer summaries.

Four things to know:

• 0.9% is out of date. You'll still see it quoted online. It was a threshold in Visa's older Dispute Monitoring Program, which VAMP replaced in 2025. It isn't Visa's limit today.
• Visa's merchant limit applies when your processor is in good standing. Visa's fact sheet says the 1.5% merchant thresholds apply if the acquirer (the bank behind your processor) isn't itself Above Standard or Excessive. If it is, expect tighter treatment. Visa doesn't publish a separate merchant number for that case.
• Your processor's own limit is likely lower. Because Visa measures processors on their whole portfolio at 0.5% and 0.7%, most set internal limits well under 1.5%. Ask yours what its number is.
• Mastercard escalates over time. Under its rules, Mastercard may take extra action once a merchant has been in the program for six months, whether or not the months are in a row.

Industries with more online sales or longer delivery times see these limits sooner. Our guides to chargebacks for gun stores and chargebacks for vape shops show how they play out in two industries.

The cheapest chargeback is the one that never becomes a chargeback. Pre-dispute tools catch a complaint at the customer's bank and give you a chance to settle it first.

• Visa pre-dispute resolution. Verifi, a Visa company, offers Rapid Dispute Resolution (RDR), which refunds qualifying disputes automatically under rules you set, and Order Insight, which shares order details with the customer's bank so the cardholder can recognize the purchase. Disputes resolved through Visa's pre-dispute solutions are left out of your VAMP ratio.
• Compelling Evidence 3.0 (CE 3.0). For online fraud claims, Visa can shift the dispute back to the bank when the same customer made at least two earlier undisputed purchases 120 to 365 days before, with matching details such as IP address or device. Fraud reports that qualify are left out of your VAMP ratio.
• Chargeback alerts. Ethoca, a Mastercard company, sends alerts when a cardholder complains, so you can refund and cancel the order before a chargeback is filed. That can stop the dispute. It doesn't remove a fraud report the bank has already filed with Visa.

These tools cost money, usually per alert or per resolved case, and refunding a sale still costs you the sale. They make the most sense when your ratio is close to a limit or when many disputes are small-ticket orders you'd refund anyway. Whether a given processor offers them varies, so ask.

Screening orders before you charge them matters just as much. Authorize.Net includes fraud detection tools you can set with filters for address mismatch, order velocity and IP location. See our overview of fraud prevention tools and the warning signs of card-not-present fraud.

Each type of dispute has a different cause, so each has a different fix. Look at the reason codes on your last three months of chargebacks and start with the biggest group.

True fraud hurts twice under VAMP, because the fraud report and the dispute can both count. Friendly fraud is common for online sellers, and it's the type that clear records help most.

Good chargeback management is mostly housekeeping done every day. These basics prevent more disputes than any paid tool.

• A billing descriptor customers recognize. The descriptor is the business name that shows on the card statement. Use the name on your website, not a parent company or legal name, and add a phone number or web address if your processor allows it.
• Receipts that do the explaining. Email a receipt with the descriptor, what was bought, the total, your refund policy and how to reach you. Many "I don't recognize this" disputes end when the customer finds the email.
• A refund policy customers see before paying. Show it at checkout, not only in the footer. Refund to the original card, and refund when you said you would. A cash or store-credit refund on a card sale doesn't stop a chargeback.
• Easy subscription cancellation. State the price, billing date and how to cancel at sign-up. Send a reminder before annual renewals and before a trial converts to paid. If customers can sign up online, let them cancel online, and confirm it in writing. Tools like automated recurring billing handle the schedule, but the policy is yours to set. Many states also have automatic-renewal laws with their own rules.
• Fast, reachable customer service. Answer emails within a business day. A customer who gets a reply rarely calls their bank.
• Answer every dispute you can win. An unanswered dispute is a lost dispute. Send dated evidence that matches the reason code: tracking, signed policies, login or IP records and your messages with the customer.

Card networks fine processors, not merchants directly. But your merchant agreement almost always lets your processor pass those costs on, along with its own steps. The usual order looks like this:

1. A warning and a plan. Your processor asks why disputes are up and what you're changing. A written plan with dates helps.
2. Fines and fees passed through. Card-network fines for program merchants, plus higher per-chargeback fees.
3. A reserve. The processor holds back part of each payout to cover future chargebacks. Learn how rolling reserves work and what to ask about them.
4. Termination. If the ratio doesn't come down, the processor can close the account.
5. A MATCH listing. Mastercard's MATCH list records merchants that banks have closed. Reason code 04 (excessive chargebacks) applies when Mastercard chargebacks over the previous three months are above 1.5% of that month's Mastercard sales and total at least USD 5,000. Listings stay for five years. Our guide to the MATCH list and how to get off it covers the rest.

The way out is the same at every step: find the dispute type driving your ratio, fix its cause, and show your processor the numbers moving down month by month. If you sell something banks see as higher risk, a high risk merchant account set up for your industry gives you a processor that expects your dispute profile, instead of one that closes you when it notices. Our guide to what makes a business high risk explains how banks decide.