If you’ve been slapped with an “excessive chargeback merchant” label, you already know the stakes are high. This isn’t just a warning—it’s a red flag that can lead to fines, frozen funds, or even termination of your merchant account. Card networks like Visa and Mastercard don’t take chargebacks lightly. And when your chargeback ratio crosses their limits, you’re suddenly considered a risk.
But you’re not stuck. With the right steps, you can get back in good standing.
What Is an Excessive Chargeback Merchant?
The term refers to any merchant who breaches chargeback thresholds set by card networks. Each network defines those limits differently:
- Visa considers merchants “excessive” when they hit a 0.9% dispute-to-transaction ratio with at least 100 disputes in a single month.
- Mastercard flags merchants at 1.5% and 100 or more chargebacks, placing them into programs like the Excessive Chargeback Program (ECP) or High Excessive Chargeback Program (HECP) for extreme cases.
Once flagged, your business is enrolled in a monitoring program. This involves regular reporting, penalty fees, and the risk of being dropped by your processor.
Why You Were Flagged
A spike in chargebacks usually comes from one or more of these issues:
- Poor billing descriptors that confuse customers
- Unclear refund or return policies
- Delayed shipping or missed delivery windows
- Recurring billing confusion, especially with trial offers
- Product not as described or service expectations not being met
- Friendly fraud, where customers file disputes they shouldn’t
Processors and card brands track your ratio monthly, so even a short-term surge in disputes can trigger monitoring.
Step-by-Step: How to Fix It
1. Audit What’s Causing Chargebacks
Pull dispute data for the last 3 to 6 months. Group chargebacks by reason codes. Identify patterns—are they mostly fraud-related? Non-receipt claims? Canceled subscriptions?
Look closely at:
- Recurring vs one-time transactions
- Order delivery and fulfillment timelines
- Billing practices and communication
- Customer service responsiveness
Use this to find the root causes, not just the symptoms.
2. Improve Your Billing Descriptors
If customers don’t recognize a charge, they’re more likely to file a dispute. Make sure your descriptor clearly matches your brand. Avoid abbreviations, old DBA names, or vague terms.
You can often adjust this by working with your processor.
3. Add Clear Communication Touchpoints
Confirmation emails, delivery tracking, and proactive support can stop disputes before they happen. Make refund and cancellation policies obvious on your site. Offer live chat or fast response times to handle complaints quickly.
4. Respond to All Chargebacks
Don’t let disputes slide. Fight back with compelling evidence:
- Order confirmations
- Tracking data with delivery confirmation
- Screenshots or session logs (for digital products)
- Refund or cancellation terms accepted by the customer
Even if you lose some cases, this shows networks that you’re taking chargebacks seriously.
5. Use Prevention Tools
Fraud filters, AVS (Address Verification System), 3D Secure, and chargeback alerts can help lower dispute volume.
- Visa Rapid Dispute Resolution (RDR): Automatically resolves eligible disputes in real-time.
- Ethoca/Verifi Alerts: Notify you before a chargeback is filed. You can resolve the issue early and avoid the dispute entirely.
These tools help catch risky transactions before they turn into problems.
6. Track Your Ratio Weekly
Waiting for the end of the month is too late. Create a rolling tracker so you can spot problems early. Remember:
Keep that number below 0.9% for Visa and under 1.5% for Mastercard if you want to exit monitoring status.
7. Ask Your Processor for Help
Processors don’t want you on these lists either. Many offer compliance teams to help you analyze disputes, set up better risk rules, or get early warning data. Don’t go silent—reach out and show you’re working on a fix.
What Happens If You Do Nothing?
If you ignore the label or fail to make improvements, you may face:
- Escalating fines from Visa or Mastercard
- Higher processing fees
- Frozen or delayed payouts
- Termination of your merchant account
- Placement on the MATCH list, which can make it nearly impossible to open another account
This isn’t just a slap on the wrist. It can end your ability to process payments entirely.
FAQ: Excessive Chargeback Merchant
What is considered a high chargeback rate?
Visa flags rates above 0.9%, and Mastercard flags rates above 1.5%. These are based on the number of chargebacks divided by total transactions in a given month. If you hit 100 or more chargebacks in a month and cross that ratio, you’re officially high-risk.
How long do you stay on a monitoring program?
It depends on how fast you reduce your chargebacks. Most programs last at least 3 months. You usually need to stay under threshold for several consecutive months to exit monitoring.
Can I get off the MATCH list?
It’s possible, but difficult. You’ll need to work with the acquiring bank that placed you on the list. They’re the only ones who can request removal. You’ll also need to prove the issue has been resolved.
Will changing processors help?
Switching processors won’t erase your chargeback history. In fact, you’ll likely be flagged again unless you address the root cause. Many processors also share data with networks, so there’s no clean slate.
What tools actually help reduce chargebacks?
Tools like RDR, Verifi Alerts, Ethoca Alerts, and 3D Secure can reduce chargebacks by catching disputes early or preventing fraud. But tools alone won’t fix the problem—you need a full strategy that includes customer support, product clarity, and better billing.
Excessive Chargebacks? Chargeblast Prevents That.
Fixing an excessive chargeback problem isn’t about playing defense forever. With Chargeblast, you can actively stop disputes before they hurt your ratios. From automated alert responses to deeper dispute analytics, we give you the tools and guidance to stay under the radar—and out of the penalty box. Prevention beats damage control, every time.
Let’s keep your business off the excessive chargeback list.
