Important: Visa and MasterCard Chargeback Ratio Update
Starting October, Visa and Mastercard have applied some changes to their chargeback prevention programs. Therefore, the chargeback ratio has now become more strict: 0.9% for Visa and 1% for MasterCard transactions.
What does it mean for merchants?
If your Visa chargeback ratio amounts to 0.9% or exceeds this limit, or your MasterCard chargeback ratio is 1% or more, you are encouraged to implement all the necessary measures to reduce your chargebacks and protect genuine cardholders from fraud. Namely, it is advisable to prepare an action plan which will help you deal with chargebacks more efficiently.
How is the chargeback ratio calculated?
Visa and MasterCard calculate the ratio differently. Visa takes the number of chargebacks of the current month and divides it by the number of transactions of the same month. MasterCard, in contrast, takes the number of chargebacks of the current month and divides it by the number of transactions from the previous month.
How to minimize your chargeback ratio?
Here are only some of the necessary steps you should take to reduce the number of chargebacks:
- Provide as many details as you can about the goods and services you offer in your online shop;
- Indicate exact delivery times and delivery prices;
- Create a possibility to exchange an item/product or to claim a refund;
- Make the return and refund policies available on your website and easy to reach;
- Provide contact information and ensure a quick response from your customer service;
- Make a clear and recognizable description which appears on your customer’s bank account statement, etc.
Learn more about possible chargeback prevention steps in our article How to Prevent and Dispute Chargebacks?
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