To many chargebacks can put a merchant out of compliance. Both Visa and MasterCard have chargeback ratios they use to determine whether or not a merchant is in compliance. It is not an either or scenario, both MasterCard and Visa have to the flag the merchant in order for the merchant to be out of compliance.
Visa has a charge back ratio threshold of 1% of total sales volume (for any given month) and up to 100 chargebacks. Master Card is exactly the same scenario, only their threshold is a 0.5% ratio, and 50 total chargebacks in any given month. In addition, you can find more information regarding these programs at:
Here are some other chargeback statistics that Visa/MasterCard also consider red flags?
- More than 50 MasterCard Chargebacks in a single month
- More than 100 Visa Chargebacks in a single month
- The total Chargeback dollar volume exceeding $2,000
- Receiving chargebacks in the fist month of processing with a bank or processor
You can calculate your charge back percentage by dividing the number of chargebacks in a month into the number of Visa/MasterCard transactions of that same month or divide the dollar volume of chargebacks in a month by the total dollar volume of Visa/MasterCard transactions processed in that same month.
If you are concerned about chargebacks please contact us immediately. Platinum Management Group specializes in handling higher risk accounts and helping the merchant reduce their chargebacks and chargeback costs.
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June 10th, 2009 at 3:06 pm
(My site is not finished yet).
I clicked on both the MasterCard Chargeback Manual and the Visa Card Acceptance Guide links above, and neither of them link to a document.
I just thought you should know so that it can get fixed.
Mike Campanella
303-921-9244
July 7th, 2009 at 3:51 pm
Mike,
Thanks for the heads up. The links have now both been updated.
Platinum Management Group