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 payment fraud can be prevented with a little training and prevention methods.