E-commerce merchants aim to offer their customers smooth, frictionless shopping and payment experiences. But what happens when a customer wants to return something they bought? Or if their goods arrive damaged or aren’t delivered?

In many cases, the customer will go straight to their issuing bank, meaning merchants miss the opportunity to resolve the issue at an earlier stage. The customer may then initiate a dispute with their issuer, kicking off a costly and time-consuming process for merchants.

As well as dealing with genuine customer problems, merchants must also deal with potential fraud in these situations. The two most common formsare:

• First-party misuse (FPM). Also known as “friendly fraud”, this is when a customer receives a purchased item but disputes the charge with their bank, usually claiming they didn't receive the item or that the purchase was unauthorized.
• Refund/policy abuse. A customer buys an item using their payment card, then uses the cardholder dispute protection to receive an illegitimate refund.

64% of the fraud and payment professionals surveyed for our 2026 Global E-commerce Payments and Fraud Report¹ reported a meaningful increase in FPM over the past year. In the same survey, 30% of merchants blamed newer, more advanced tools and tactics — like fraud-as-a-service and the use of AI—for rising FPM.

As dispute volumes continue to grow — Visa handled 105 million in 2025² — so do the associated costs. The estimated cost to fight for every $1.00 lost to fraud is $3.85,³ while the average cost to resolve a single FPM dispute stands at $82.00.¹

To combat post-purchase fraud, merchants pull many levers: making their purchase policies clear and easy to find, requiring CVV codes for card payments, checking customer order histories and notifying customers when orders are processed and delivered. Merchants also monitor and analyze transaction data and non-fraud chargebacks and declines and work with providers to prevent and identify fraudulent transactions.

Despite merchants' best efforts, however, some transactions still risk becoming disputes. Without an efficient process to help manage and resolve these issues before they become disputes or chargebacks, merchants can face things like:

• Time-consuming and resource-intensive decisions
• Over-refunding, leading to revenue losses
• Costs from lost stock
• Customer frustration, which can negatively affect trust and loyalty
• Fraud going undetected

To help merchants resolve post-purchase issues and fraud earlier, we offer a unified solution, Visa Dispute Resolution Network (VDRN). As part of our end-to-end offering of post-purchase solutions, it helps merchants resolve fraud and non-fraud pre-disputes more efficiently, even when customers take post-purchase issues straight to their bank.

For merchants, this means more opportunities to resolve issues earlier, before they become costly chargebacks. For acquirers and payment partners, it extends pre-dispute protection more broadly across their merchant portfolios, rather than requiring separate activation for each merchant.

With global coverage across participating issuers of Visa, Mastercard, Discover and American Express cards, VDRN is built for scale, speed and control. It combines real-time notifications and AI-powered decisioning with customizable rules to enable both automated and merchant-reviewed decisions.

The table below compares the benefits of using our pre-dispute resolution solution with the standard chargeback process.

It’s quick and easy to onboard, either directly with us or through your acquirer or reseller. By leveraging the scale and security of Visa, you can resolve pre-disputes more efficiently and:

• Optimize revenue by preventing over-refunding, reducing false positives and avoiding downstream fees and fines.
• Reduce time and manual effort involved in case decisioning, refunding and reconciliation for all card brand disputes.
• Get greater control over dispute outcomes.
• Enhance customer experience for genuine returns and refunds.
• Make better, faster decisions with deep insights, predictive results, dashboards and automated alerts.
• Help merchants manage fraud and dispute ratios that can contribute to card-brand monitoring exposure