Chargebacks are essential to consumer protection, and they increase confidence for online payments. Whilst they are vital in ensuring consumers have a safe payments process, they also are frustrating for Merchants. There are ways your Merchants can decrease the risk of chargebacks and protect their business.
When a consumer files for a chargeback, Merchants can lose revenue. Once a bank has reviewed the transaction and approved the chargeback, a Merchant can face fees up to twice as much as the transaction amount.
Merchants with a high ratio of chargebacks also run the risk of additional fines and the termination of their Merchant account. Card Schemes, and other financial institutions, set thresholds for the acceptable percentage of chargebacks on transactions. The most common value is 1%, meaning if a Merchant’s chargeback rate is higher than this, they can face penalties.
Whilst this may sound daunting, there are steps Merchants can put in place to reduce the likelihood of chargebacks.
To learn how Cardstream can help take your Merchants to the next level, contact us.
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