Credit card chargebacks are nothing but bad news for merchants.<\/p>\n
Even a single chargeback can hurt your bottom line<\/a>. That said, excessive chargeback levels can\u2014and have<\/em>\u2014put many merchants out of business completely. This raises the question: how many is <\/em>too many<\/em>?<\/p>\n Customer disputes are more expensive than they seem at first glance. Our internal data suggests that, by 2023, the average chargeback will cost $191<\/a>. This is based on a $90 average disputed transaction.<\/p>\n Even a few chargebacks<\/a> can be a problem. Excessive chargeback levels, however, can send your costs through the roof, threatening both card-processing privileges and your ability to even function in the eCommerce environment.<\/p>\n In this post, let\u2019s break down the idea of excessive chargebacks. We\u2019ll see what the term means, how your chargeback ratio fits into the picture, chargeback monitoring, and what happens if you receive an excessive number of disputes.<\/p>\n \u201cExcessive chargebacks'' seems like a vague, generic description. In this context, however, \u201cexcessive\u201d means exceeding a specific threshold set by one of the card networks.<\/p>\n These thresholds can seem overly-harsh. However, they\u2019re not designed to punish anyone. Instead, they\u2019re meant to help card networks and banks assess financial risk posed by individual merchants.<\/p>\n The chargeback threshold is compared against the merchant\u2019s chargeback rate. This is a calculation that measures the number of chargebacks your business receives<\/strong> within a month against the total number of transactions processed<\/strong> in that period.<\/p>\nRecommended reading<\/h3><\/div>
What is an Excessive Chargeback Rate?<\/h2>\n