How many chargebacks until account issues happen?
When it comes to chargebacks, the answer can be both simple and complex, with a couple of key caveats. Generally speaking, you want to keep your chargebacks under 1%.
Once your chargeback ratio exceeds 1%, most processors will take action—whether that’s closing your account, freezing your funds, or, ideally, opening a dialogue to help you manage and reduce chargebacks.
At Easy Pay Direct, for instance, if your chargebacks start nearing or exceeding 1%, we’ll work with you on what we call a chargeback mitigation plan.
Now, let’s talk about those caveats.
First, the 1% threshold can vary depending on your provider and the industry you’re in. If you're operating in a higher-risk industry—like an aggressive supplement business, an information product company, or a business that heavily markets live events online—it’s not unusual for chargebacks to hit the 2-3% range.
But keep in mind, there are only a few select banks that will work with companies at those chargeback levels, for a variety of reasons. So, who you work with matters—a lot.
Second, that 1% rule applies to your credit card processors, but Visa and MasterCard have their own high-risk chargeback programs for larger merchants.
These programs are designed to monitor chargeback ratios, and they update their thresholds year to year, but they typically stay around that 1% mark.
Another important note: To even be eligible for Visa or MasterCard’s monitoring programs, you need to be processing at least 50 transactions per month.
We have long-standing relationships with over 30 back-end banks. Most of which we've known for over a decade!
As such, we have personal relationships that are unmatched in the industry, and we work with you and fight for you, to make sure we can get an account approved that works for your business model.
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