Msg#: 3036915 posted 6:56 am on Aug 7, 2006 (gmt 0)
Are chargeback ratios calculated by transaction number or transaction amount? When Visa/astercard say they only allow a 1% chargeback ratio does that mean only 1 out of every 100 transactions can be chargebacked? or is it $1 out of every $100 processed?
Msg#: 3036915 posted 1:11 pm on Aug 7, 2006 (gmt 0)
Use of common sense would tell you that it is the number of transactions, not processed amount. For example, if you had 1000 transactions at $10, then 1 transaction at $10,000 that got charged back, it would hardly be correct to say you have a 50% chargeback ratio (extreme example, I know, but you get the idea)
You have to be doing a pretty hefty number of transactions before VISA even bothers with you - 10,000 a month plus.
[edited by: FalseDawn at 1:11 pm (utc) on Aug. 7, 2006]
Msg#: 3036915 posted 8:19 pm on Aug 10, 2006 (gmt 0)
Some does it on transactions, some does it on amount, some do it on both.
It is best to speak with your merchant provider. You may need to speak with someone in the security or fraud deparment to get a straight answer, as front end phone staff are only trained on every day problems.
Msg#: 3036915 posted 2:48 pm on Aug 11, 2006 (gmt 0)
Visa and MasterCard do both however the 1% you are reffering to is the number of transactions.
The treshold for MasterCard is 1% in transaction and 2.5% in volume where the trigger for participation in chargeback monitoring program is 15 chargebacks in one month. So, if you have 14 chargebacks and a ratio of 3% they don't care. If you have 25 chargebacks and a ratio of 0.93% they don't care. If you have 16 chargebacks and a ratio of 1.01%, you are in trouble.
However, effective October 1, 2006 these figures will be changed to 50 chargebacks/month and 0.5% in transactions. Where 50 chargebacks is just bad business practice in my opinion.
For Visa it is respectively 2% in transaction and 200 chargebacks, not sure about the allowed volume percentage.
Msg#: 3036915 posted 8:01 pm on Aug 11, 2006 (gmt 0)
Never do refunds if they are not derserved just to avoid chargebacks. It's like cheating to protect your good name and business at the expense of the rest of us. Some people are just bullies and use chargebacks (it used to be just threat of bad PR) as their sticks. The more you give in and don't defend yourself, the bigger their stick gets.