Payments · Telehealth6 min readUpdated November 2, 2026

Chargebacks for Telehealth Companies: Thresholds, Prevention and Alerts Setup

Visa and Mastercard chargeback thresholds for telehealth companies in 2026, why patients dispute, the reason codes, and prevention that works.

Nick Bonnassies, CMO at Tagada · checked against 13 sources

Article summary

TL;DR

Visa and Mastercard both start monitoring merchants at 1.5% in 2026: Visa adds fraud reports to disputes, Mastercard counts chargebacks against the previous month's sales. Telehealth disputes come mostly from unexpected charges: before a clinician's review, after a decline or cancellation, or under an unknown descriptor. Capture after approval, clear terms and easy cancellation prevent most.

Visa's US merchant threshold is 1.5% of settled card-not-present transactions, fraud plus disputes, since April 1, 2026, with at least 1,500 cases a month.
Disputes resolved through a pre-dispute solution are excluded from Visa's count.
Mastercard's Excessive Chargeback Merchant level starts at 1.5% and 100 chargebacks; its ratio uses the previous month's transactions.
Stripe US charges $15 when a dispute arrives, and $15 more if you respond, returned if you win.
On July 29, 2026, the FTC alleged a telehealth company charged consumers for a prescription "without having a chance to review or approve it".

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On this page

This guide is part of our hub on telehealth payment processing. The general guide, for any business: how chargebacks work and what they cost.

The thresholds in 2026

No card network has a telehealth-specific threshold. You fall under the same programs as any card-not-present merchant, and your processor usually acts well before them.

	Visa (VAMP)	Mastercard (ECM)
Counted	Fraud reports (TC40) plus disputes (TC15)1	Chargebacks3
Divided by	Settled card-not-present transactions, same month1	Transactions, previous month3
Threshold	1.5% in the US since April 1, 2026 (2.2% before)1	1.5%2
Minimum	1,500 fraud reports and disputes a month1	100 chargebacks a month2
Higher tier	Not covered here	3% and 3002

1.5%

Visa VAMP threshold in the US since April 1, 2026

1,500

Fraud reports and disputes a month before Visa counts you

1.5% / 100

Mastercard ECM: ratio and chargebacks a month

3% / 300

Mastercard's higher tier

Example

8,000 settled orders in March, 90 disputes and 40 fraud reports. Visa ratio = 130 ÷ 8,000 = 1.6%. That's over 1.5% but under Visa's 1,500 minimum, so no Visa program. Your processor still sees 1.6%, and on a restricted business like telemedicine, Stripe's approval "may be modified or revoked by Stripe at any time"9.

Tagada follows Visa and Mastercard rules and the laws that apply to payments.

Why telehealth patients dispute

Most telehealth disputes start with a charge the patient didn't expect. The causes are specific to how telehealth charges.

Cause	Typical code	Prevention
Charged before a clinician reviewed the case	Not as described, cancelled recurring	Authorize at checkout, capture only on approval
Charged after the clinician declined	Credit not processed	Release the hold automatically on a decline
Enrolled in a plan they didn't expect	Visa 13.2, Mastercard 48414	Plan terms before the card field; consent to the recurring charge6
Cancelled, still charged	Visa 13.24	Instant online cancellation, confirmation email6 7
Didn't recognize a discreet descriptor	Fraud codes	Brand name plus support contact in the descriptor, explained at checkout
Card used by someone else	Visa 10.45	3D Secure, ID check where your offer requires it; CE 3.0 evidence5

Fig. 1Where each telehealth dispute starts in a patient's journey

CheckoutUnexpected plan: terms before the card field
Clinician reviewAuthorize now, capture only on approval
DeclineRelease the hold automatically
RefillBill when the pharmacy ships
CancellationOnline, instant, with a confirmation

Each step has its own dispute, and its own fix.

Visa Core Rules, April 18, 2026; Mastercard subscription FAQs, 2022; Chargeback.io and Qualpay on reason codes.

Two of these causes are at the heart of the FTC's July 2026 complaint against a telehealth company: being "charged for and subscribed to a prescription" without review, and cancellation made hard "by hiding the cancellation button"8. These are allegations, and the case is ongoing.

Prevention that works for telehealth

Capture after approval. The patient pays nothing if the clinician declines: see prescription-gated checkout.
Show the plan terms before the card field: price, frequency, next charge date, how to cancel6.
Send reminders before trials end (at least 7 days for Visa6) and before charges on cycles of 6 months or less (Mastercard7).
Let patients cancel online in a few clicks, with a confirmation6 7: cancellation compliance.
Bill refills when the pharmacy ships, not on a calendar date the patient can't link to a delivery.
Use a descriptor patients recognize: discreet is fine, unknown isn't.
Refund fast when a patient asks: a refund costs less than a dispute fee plus the ratio hit.
Set up alerts to refund before a dispute is filed: chargeback alerts for telehealth companies.

Most of these fixes sit in the checkout and billing flow, not in the dispute team.

Respond or refund?

Situation	Best move	Why
Alert received before a dispute	Refund	Resolved pre-disputes are excluded from Visa's count1
Fraud dispute with matching IP, device and past undisputed orders	Respond with CE 3.0 evidence	Visa's 10.4 remedy5
Cancelled-recurring dispute, and you can show consent, the reminder and no cancellation request	Respond	Your records decide the case
Patient did cancel, or was charged after a decline	Refund and fix the flow	You'd lose and pay twice10

Watch out

Win disputes with payment records, not medical ones. Consent screens, timestamps, shipping proof and the cancellation log are enough; clinical notes don't belong in dispute evidence. See HIPAA and your payment processor.

What never to do

Spreading volume
Don't spread volume across accounts to stay under a threshold: Stripe prohibits evading chargeback monitoring9, and the networks treat it the same way.
Reprocessing
Don't reprocess disputed transactions.
Hidden cancellation
Don't hide cancellation to lower churn: it moves cancellations to the bank8.
Charging a declined case
Don't charge a declined case, even for a "consultation fee" the patient wasn't told about.

How Tagada helps

Fraud filters before the charge, a vault you keep

TagadaPay brings "native 3DS2, device intelligence, and rules engine: approve real customers, block the rest", with "enhanced review for regulated verticals"13.

Fraud filters before the charge: 3DS2 and rules that stop card testing before it turns into disputes
Your vault, portable: "Switch processors without re-onboarding customers"13
Routing across TagadaPay and processors such as Stripe, NMI and Airwallex, with a cascade to another processor when one is down or times out

Building the whole telehealth brand? With Tagada Rx, "the card is only captured once a doctor approves"12, refills rebill on ship day, and "declined, cancelled, and errored cases never rebill"11. US patients only, by selection.

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Fraud filters before the charge, a vault you keep

Updated on November 2, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What is the chargeback threshold for telehealth companies in 2026?

The same as for any card-not-present merchant. Visa monitors US merchants at 1.5% of settled transactions, fraud plus disputes, with at least 1,500 cases a month, since April 1, 2026. Mastercard starts at 1.5% and 100 chargebacks. Processors usually act earlier.

Why do telehealth companies get chargebacks?

Mostly unexpected charges: before a clinical review, after a decline or cancellation, a plan the patient didn't realize was recurring, or a descriptor they don't recognize. Each has a fix: capture on approval, clear terms, easy cancellation and a recognizable descriptor.

How do I calculate my chargeback ratio?

For Visa: fraud reports plus disputes in the month, divided by settled card-not-present transactions the same month. For Mastercard: chargebacks in the month, divided by transactions the previous month. Track both by offer.

Should I fight every telehealth chargeback?

No. Respond when your records prove consent, delivery and no cancellation, or when Visa's CE 3.0 fraud evidence applies. Refund when the patient cancelled or was charged after a decline, then fix the cause.

Do chargeback alerts count toward my ratio?

Disputes resolved through a pre-dispute solution are excluded from Visa's count. That's why refunding on an alert is usually cheaper than waiting. Setup and providers: chargeback alerts for telehealth companies.

Sources

Checked November 2, 2026

TagadaPay

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