Understanding the Consequences of Excessive Chargebacks
- August 3, 2022
In 2019 Mastercard addressed the issue of excessive chargebacks with the Excessive Chargeback Program (ECP), which monitors chargeback activity and penalizes merchants that have a high rate of chargebacks.
What is the Mastercard Excessive Chargeback Program?
The goal of the ECP is to reduce fraud and chargebacks while enhancing payment experiences by keeping a watchful eye on dispute activity and enforcing compliance with policies that minimize chargeback occurrences.
As a business owner, it’s important to be aware of the consequences of excessive chargebacks. If you’re not careful, they can lead to significant financial losses, damage to your reputation, and even result in being placed on the MATCH list (Member Alert to Control High-Risk).
Acquiring banks have frequently terminated merchant accounts owing to excessive chargebacks. This type of account termination typically results in merchants being added to the MATCH list, an industry-wide blacklist administered by Mastercard.
The consequences of being listed on MATCH include difficulties in establishing and maintaining relationships with banks and payment processors, as well as higher costs for those who are ready to do business with a merchant on the list. These complications might put a firm out of business very quickly, especially because getting off the MATCH list may take years.
Taking steps to prevent excessive chargebacks is the best way to protect your business. By understanding the causes of chargebacks and taking steps to prevent them, you can avoid the costly consequences of excessive chargebacks.
How to Prevent Excessive Chargebacks
There are a number of things you can do to prevent excessive chargebacks. Here are some tips:
1. Keep accurate records.
Make sure you keep accurate records of all your transactions. This will help you spot any errors or fraud and dispute any chargebacks that are unwarranted.
2. Train your employees.
Make sure your employees are trained on your company’s policies and procedures. They should know how to spot signs of fraud and how to handle customer disputes.
3. Use fraud prevention tools.
There are a number of fraud prevention tools available, such as AVS and CVV2 verification. These tools can help you prevent fraudulent transactions and reduce the number of chargebacks you receive.
4. Keep your customers informed.
Make sure your customers know your policies and procedures. If they know what to expect, they’ll be less likely to dispute a charge.
5. Respond quickly to customer disputes.
If a customer does dispute a charge, respond quickly and resolve the issue to their satisfaction. The longer you take to resolve the issue, the more likely it is that the customer will file a chargeback.
By following these tips, you can prevent excessive chargebacks and protect your business.
Global Legal Law Firm
Taking your business off of MATCH may save you up to 8-12% in processing expenses alone. Remember what those fees used to be? It’s possible once again. Global Legal Law Firm can assist you to reclaim those reduced costs so that you can get back to business.
Our attorneys have combined decades of experience dealing with ISOs, processors, commercial collections, credit card brands, as well as a high success rate in removing clients from the MATCH list.
CFPB investigates business practices of Data Brokers. Is your personal data safe?
On March 15, 2023, the Consumer Financial Protection Bureau (CFPB) released a request for...Read More
New Gun Sales Merchant Code to be added by Card Networks
The International Organization for Standardization (ISO) yielded to demands from gun-control activists and...Read More
California Arbitration Ban Ruled Invalid by Ninth Circuit Court
On February 15, 2023 the Ninth Circuit Court of Appeals struck down AB...Read More