Your chargeback rate is the percentage of your transactions that result in chargebacks, measured monthly. Card networks set thresholds; exceeding them can lead to monitoring programs, fines, or loss of processing.
Card Network Thresholds
Program | Network | Standard Threshold | Excessive Threshold |
|---|---|---|---|
Visa Dispute Monitoring Program (VDMP) | Visa | 0.9% | 1.8% |
Mastercard Excessive Chargeback Program (ECP) | Mastercard | 1.0% | 1.5% |
Staying well below the standard threshold is the goal. Once you enter a monitoring program, fines begin accumulating monthly.
Best Practices to Reduce Chargebacks
Before the sale:
Use a recognizable billing descriptor that matches your business name
Be clear about refund and cancellation policies at checkout
Use 3D Secure (3DS) authentication where available to shift fraud liability
After the sale:
Send order confirmation and shipping notifications
Provide easy, proactive refunds — customers who get refunds don't file chargebacks
Respond promptly to customer complaints
Operations:
Investigate spikes in Notification of Chargeback (NOC) events immediately — they are leading indicators
Monitor your chargeback rate monthly
Review reason code patterns to identify systematic issues
Getting Help
If your chargeback rate is trending upward, contact your account manager immediately. Swipe Aras can help identify patterns and recommend interventions before thresholds are breached.