Consequences From Chargebacks

There are several consequences a business can face for receiving too many chargebacks:

• Lost Product
• Chargeback Fees
• Fined by Card Associations
• Placed on Association Monitoring Program
• Loss of Merchant Account
• Terminated Merchant File

How many chargebacks are too many?
Visa®: more than 100 chargebacks with chargebacks in excess of 1% of total transactions.
MasterCard®: more than 15 chargebacks with chargebacks in excess of 1% of total transactions.
What are the Fees for Chargebacks?
A chargeback handling fee is associated with each chargeback. This is a processing fee for handling the chargeback and/or subsequent re-presentment. The fee is not a penalty or a declaration that a merchant is right or wrong.
Preventing Chargebacks
Most chargeback situations arise at the point of transaction—at the time the transaction is completed—and most online credit card fraud can be prevented with a little training and prevention methods.