What are other negative consequences for retailers with excessive chargebacks?

As if the costs of lost revenue, product and time are not enough, merchants with excessive chargebacks might be labeled as high-risk. Being labeled a high-risk retailer can have devastating effects for both customer and industry partner relationships. Among several potential outcomes, one devastating effect could be a retailer’s loss of processing privileges.

While each payment brand (Visa, MasterCard, Discover, American Express, PayPal, etc.) has a different formula for determining unacceptable fraud ratios, merchants are best advised to be aware that this ratio does exist and to keep the frequency of chargebacks as low as possible.

On the way to the ultimate outcome of lost processing privileges, retailers with a high chargeback: transaction ratio will suffer from higher chargeback fees and other penalties.