Posted by admin on Sep 03, 2010


Chargebacks and High Risk Processing

Business applying for high risk merchant accounts accounts frequently ask questions about chargebacks.

Card brands consider chargeback percentages over 1% to be excessive.  Other elements that are considered when examining chargebacks are the number of chargebacks in a single month and the total chargeback volume.

Payment processing chargebacks are computed by dividing the number chargebacks into the total number of card transaction in a month.  The dollar volume of chargebacks are calculated by dividing the amount of chargebacks into the volume of processing for the month.

How Chargebacks Affect You

Excessive chargebacks can put high risk merchant accounts at risk.  In addition to fines, high risk you can face termination of processing rights.

Therefore, it is wise for you to carefully mange chargebacks.  Using the fraud protection tools that are available in a high risk gateway can go a long way in mitigating chargebacks and automate the processes.

In addition, you should always fight chargebacks.  While you won’t always win, it can be successful in many cases.  Fighting chargebacks also indicates that a company believes in its business and is proactive in responding to negative responses to customers.


Proper management of chargebacks is particularly important to high risk merchants. Enable the tools available on your payment gateway. Use chargeback prevention services. And fight the chargebacks you can win.

How are you handling your chargebacks?