Maria Shymanska’s Post

View profile for Maria Shymanska, graphic

Winning Chargebacks on Autopilot || Fraud Prevention || Chargeback Recovery

CHARGEBACK FINES & FEES Chargebacks don’t just entail payment reversals for merchants, but ALSO additional fees levied by acquirers to cover the costs of managing the chargeback process The chargeback fee levied by acquirers or payment service providers (PSPs) typically ranges from $15 to $50 for merchants with an average risk profile. For high-risk merchants, acquirers typically charge higher fees to cover the increased costs and risks associated with maintaining them as clients. ❗️Fees are also charged by the credit card schemes when merchants exceed certain limits for a total number of chargebacks and chargeback ratio. 🔹 For Visa, if a merchant with a regular risk profile exceeds 100 transactions per month with a chargeback ratio greater than 0.9 percent of transactions, they will be placed in the Visa Dispute Monitoring Plan (VDMP) where they will have to pay: - No additional fees in months 1-4 of the program. - $50 per chargeback in months 5-9 of the program. - $50 per chargeback in months 10-12+, plus the merchant will have to pay an additional $25,000 review fee. For merchants labeled high-risk fees are even higher. 🔸For MasterCard, the charges are different from Visa. Merchants are placed in the Excessive Chargeback Merchant (ECM) program when they exceed 100 chargebacks and have a chargeback ratio greater than 1.5 percent for two consecutive months. Fees are as follows: - Month 1 has no fines. - Month 2 has a fine of $1,000. - Month 3 has a fine of $2,000. - Months 4-6 each have a fine of $5,000, plus an additional $5 issuer recovery assessment for every chargeback above 300 per month. - Months 7-11 each have a fine of $25,000, plus an additional $5 issuer recovery assessment for every chargeback above 300 per month. - Months 12-18 each have a fine of $50,000, plus an additional $5 issuer recovery assessment for every chargeback above 300 per month. - Months 19+ each have a fine of $100,000, plus an additional $5 issuer recovery assessment for every chargeback above 300 per month. For high-risk merchants that have over 300 chargebacks per month and a chargeback ratio exceeding 3 percent, the fees lead to $200,000. Aside from the chargeback fees ranging between $15 and $50, there are unforeseen expenses which include: 👥 Customer acquisition costs 🚚 Shipping expenses 📲 Processing fees 💰Labor expenses 💵 Operational expenses ⛔️ Altogether, a $100 chargeback can cost a business over $200. The best way to avoid chargeback fees is by preventing chargebacks. Say goodbye to chargeback headaches and hello to financial peace of mind with Merchanto.org! Join us in protecting your business, reducing chargeback costs, and ensuring a smooth payment experience for you and your customers. Together, we'll safeguard your profits! 💼💪 📩 [email protected]

  • No alternative text description for this image

To view or add a comment, sign in

Explore topics