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How a Chargeback Can Put Your Company Back at Square One

Everyone has heard of a fraudulent charge, and many have experienced one, two, or even more. Fraudulent charges are considered a normalcy in the high risk business realm. However, perhaps the biggest downside of the fraudulent charge is what happens next: The chargeback. Many, even some who have experienced a chargeback, are not sure what it really is. While the terms is scary, there are ways to protect your company from chargebacks.

What usually happens with a mainstream processor is that once you have a fraudulent charge, your account is “flagged”, and your fees rise. After a second or third fraudulent charge, they terminate your account. At times, this comes without notice, leaving you without a way to process any payments, or issue refunds. The second part of a fraudulent charge is the chargeback. The chargeback is the fees associated with the fraudulent charge. The chargeback is not just the refunded transaction, but penalties that your processor and the card companies have attached to it. These fees can become a headache, as they can be upwards of 270% of the original charge. This is outrageous! While a small chargeback of $5 isn’t a big deal to most businesses, a larger chargeback is.

There are few options to help guard against chargebacks. One of the best is EMB’s chargeback insurance. While our chargeback insurance, you can not only save funds when it comes to chargebacks, but we can help you determine if the fraudulent charge is actually fraudulent, or just a regretted purchase. While others punish or drop your company for fraudulent charges, we know that it is truly a part of the high-risk game. We will not drop your account, or raise your processing fees just because you are dealt a fraudulent charge. While our chargeback insurance is not required for a merchant account, it is a good idea to obtain one, as a chargeback can cripple a company at any time.