Frequently Asked Questions –
Fraud & Chargeback Mitigation

What is a Chargeback?
A credit back to a cardholder’s account, which occurs when a cardholder informs their credit card issuer who in turn informs the acquiring bank and/or the processor that a particular charge was not authorized or that goods or services were not delivered or provided as promised.  Once a customer alleges goods or services paid for were not delivered or provided, the charge is credited back to their account temporarily and the merchant has seven days on average to produce evidence proving the goods or services were delivered or provided or else the credit to the cardholder’s account becomes permanent.  A high Chargeback history can oftentimes result in a Acquirer or Processor holding funds and, in cases of Excessive Chargebacks, closing the Merchant Account.

What are considered to be Excessive Chargeback levels?
Excessive normally is considered to be anywhere over between 2-5% by Acquirers outside the US or Processors using International Acquirers.  US Acquiring Banks and some European Acquiring Banks adhere to Visa/MasterCard regulations that place the limit specifically at 200 chargebacks & a 2% chargeback to transaction ratio for Visa, and 100 chargebacks & 1.5% chargeback to transaction ratio for MasterCard.