An increasing amount of consumers prefer to shop online. While this option is extremely convenient for consumers and merchants, it is also advantageous to fraudsters. As merchants move online, there has been a drastic increase in card-not-present fraud. Chargebacks can result from card-not-present fraud and slowly drain merchant profits. Chargebacks happen when a customer makes a legitimate purchase, but then disputes the charge in the hopes of getting their money back and keeping the purchase. Most merchants don’t catch chargebacks in time before complainants receive their money back. Not only do merchants lose the sale, but they are also penalized by their card networks when too many chargebacks happen. This can be extremely detrimental to merchant profits in the long run.
Every card-network demands that merchants not exceed a certain percentage of chargebacks. An excessive amount of chargebacks can indicate a few issues like: non-adherence to network rules, fraudulent transactions not being canceled, or customer service. When a merchant exceeds the allotted amount of chargebacks, the network my put the merchant on an excessive-chargeback monitoring program and penalize the merchant for additional chargebacks. If a merchant is placed on a program, it could keep them from accepting certain types of credit card brands.
Visa and other major credit cards have excessive-chargeback programs. Visa has a domestic program called U.S. Merchant Chargeback Monitoring Program. The other is an international program named the Global Merchant Chargeback Monitoring Program. Each program sets their own requirements depending on geographic regions. Before choosing a card-network, see what their chargeback thresholds are.
Prevent chargebacks from sucking the profits out of your business with EMB’s Chargeback Shield powered with Verifi, Cardholder Dispute Resolution Network (CDRN), and the Ethoca alert system. As a result, EMB’s Chargeback Shield has reduced the frequency of merchant chargebacks by 15-30%. Our Chargeback Shield provides a specialty chargeback suite that monitors, tracks, and alerts merchants of any chargebacks filed. Merchants can relax knowing that this powerful system is protecting their assets. Let competent merchant account protection keep your business on track in 2016. Apply for a merchant account with EMB today and get chargeback coverage right away.