Visa U.S.A. said Tuesday that procedures it started to introduce in 2000 to hasten and simplify dispute resolution are making life easier for customers, card issuers, and merchants.
Already, as a result of the changes, most disputes can be handled by phone or on the Web, Visa said. In the past, customers who disputed a charge on their card needed to object formally in a written letter.
Looking further ahead, Visa hopes to clear up most credit card disputes within one billing cycle, it said. The current average is two, and disputes can sometimes drag on for six months to nearly a year.
The streamlining effort, called Project RED (for "re-engineering disputes"), is a big reason that chargebacks declined last year, said vice president Dave Van Horn, who supervises the project. Visa's chargebacks totaled $238 million last year, 21% less than in 2001, it said in a press release Tuesday.
Mr. Van Horn said Visa has been gathering information for Project RED from members and processors since 1999.
A big early step came in 2000, he said, when Visa eliminated its requirement that consumers submit disputes in writing except in cases of fraud. In April of last year Visa also dropped the requirement that consumers send in credit receipts to dispute charges. (Issuers may require the paper documents.)
Also, Visa rules now allow merchants rebutting consumer claims to submit just a shipping invoice number instead of the signed receipt.
Next April, to further streamline the process, Visa will stop giving merchants a second shot at rebuttal before sending the matter to arbitration, Mr. Van Horn said.
Visa has also simplified the process by reducing dispute categories from about 60 to 24, he said.
Wells Fargo & Co. has employed some features of Project RED, Visa's press release said. The project "is increasing our operational efficiency and ensuring that our backroom operations are much more cost-effective," said Linda Chumley, Wells' vice president of debit card operations, in the release.
MasterCard International has had automated dispute resolution since 1996, said Richelle Weisbrod, its vice president for customer technology and operations services, in an e-mail.
In addition, "in 2003 we completed member migration to the Global Clearing Management System, which provides a wealth of data that can be mined by the members to put more information on the cardholder statements, should they choose," she wrote.
