Visa's chargeback limit hits growing stores hardest

VAMP (Visa's limit on how many of your sales can be disputed) applies one ratio and one threshold to every online or phone-sale merchant that reaches the minimum of 1,500 events a month. It falls harder on merchants growing into it than on stable ones already inside.

A merchant with 1,000 online sales a month that went through is invisible to VAMP, even with a 5% dispute ratio. The same merchant at 1,500 is inside the program with the same customers. The payment company (Stripe, Shopify Payments and the like) now compares the ratio against a 1.5% Excessive line. In the Excessive band the fee is $8 per fraud or dispute transaction.

The ratio is count-based. Take the fraud reports plus the dispute counts, then divide by the online sales that went through. A growing merchant brings in more first-time customers, and first-time customers dispute more often than returning ones. The ratio climbs as the event count rises fast enough to attract the payment company's attention. A merchant at steady state looks cleaner on paper.