MAG Insights

Living the mission to solve an age-old problem.

Thirty-plus years ago, I started my payments journey as a chargeback clerk for an acquirer. With only fifteen minutes of training, I'll never forget the epiphany of realizing I was moving money every time I hit enter on that crusty old CRT. That job awakened my curiosity about the payments industry, and while my career quickly moved past the function of researching and dispositioning chargebacks, I've maintained a passion for what I knew even then: the chargeback process, while necessary, is fundamentally broken.

Don't get me wrong, disputes have evolved since the early 90's. The introduction of new flows, such as pre-disputes resolution services, has replaced retrieval requests for copies (RFCOs) and all documentation is exchanged through electronic systems instead of mail. Compelling evidence was introduced as eCommerce transactions gained momentum. The chargeback lifecycle has since been reduced to the bare minimum; can you believe there used to be up to seven bounces between merchant and issuer before a dispute went to pre-arbitration?

For card-present transactions, there was an assumption, albeit false, that chip cards and the subsequent liability shift in the U.S. would reduce chargebacks to nominal levels. As a retailer at the time, I can attest that didn't happen. Instead, we saw our non-fraud chargeback volumes increase seven times over, barely offsetting the decrease in fraud chargeback reason codes. Our chargeback team had to relearn how to win a dispute all over again. Try explaining that to the COO and CIO who championed for funding and technology resources to migrate to chip terminals.

Since joining the MAG in 2023, I have heard merchants regularly relay chargeback horror stories during conferences, SIGs, and committee meetings. Impossible chargebacks, disproportionate loss rates by brand or issuer, and friendly fraud shifts and patterns, leading to the perception that retailers lack equal footing in the disputes ecosystem. To explore these comments further, earlier this year MAG initiated a project to explore the current state of chargebacks and where merchants suggest change to better the ecosystem. We gathered twenty-three unique pain points and have consolidated them down to five higher-level items that address the majority of those symptoms. We'll publish a white paper detailing our full findings and recommended action plan in the coming months. These prioritized pain points are:

• Illogical chargeback reason codes (including vertical-specific gaps)
• Ease of cardholder-initiated chargebacks
• Inconsistent handling of representments
• Monitoring programs
• Proof of delivery

Additionally, we're excited to be launching a Chargeback Modernization Working Group to take the white paper from ideation to action. We interviewed numerous merchants, payments, fraud, and chargeback consultants, as well as other industry stakeholders, to identify the top pain points in the process today. Most importantly, we've discussed our initial findings with each of the global card brands and have their commitment to working towards the resolution of these pain points. Together with our global card brand partners, we're confident we can drive positive change in the industry, living up to our long-standing mission.

The Chargeback Modernization Working Gorup officially kicks off on Thursday, June 11, 2026, at 10:00 a.m. CT. We'll hold standing Working Group meetings on the second Tuesday of every month at 10:00 a.m. CT, along with ad-hoc meetings with the card brands or industry partners as necessary. If you or someone in your member organization would like to participate, please notify us through our Join a Community form. If you cannot access the form and would like to participate or just learn more, reach out to Kelly Andrus directly.