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Thread: Please help me understand chargeback %..

  1. #1
    Junior Member Mik11781 is on a distinguished road
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    Please help me understand chargeback %..

    Hello all,

    I am hoping that somebody can shed some light on how to calculate VISA/Mastercard chargeback percentage. Here is my question: If my company succeeds in getting chargebacks reversed, is the initial chargeback amount still calculated into the chargeback percentage?

    Here is an example. Let's say my company does $10,000/month in Visa transactions. One day we receive a chargeback for $100.00 (1%). This chargeback is disputed and our company is able to get the chargeback reversed in our favor. So, does the fact that the chargeback existed at one time mean that our chargeback % for that month is still 1%? Or, since the chargeback was reversed, does that mean that we have a 0% chargeback percentage?

    Any and all responses are greatly appreciated.

  2. #2
    Member AHall is on a distinguished road
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    Re: Please help me understand chargeback %..

    VISA and Mastercard's charegeback ratio are calculated based on the transaction number and transaction amount.
    The treshold for MasterCard is 1% in transaction and 2.5% in volume where the trigger for participation in chargeback monitoring program is 15 chargebacks in one month.
    So, if you have 14 chargebacks and a ratio of 3% they don't care.
    If you have 25 chargebacks and a ratio of 0.93% they don't care.
    If you have 16 chargebacks and a ratio of 1.01%, you are in trouble.

    But now if there are 50 chargebacks/month that's 0.5% in transactions. For Visa it is respectively 2% in transaction and 200 chargebacks, not sure about the allowed volume percentage.
    To calculate your chargeback percentage the number of chargebacks in a month is divided into the number of Visa/MasterCard transactions that same month.
    Dollar volume of chargebacks in a month divided into the total dollar volume of Visa/MasterCard transactions processed in that same month.

  3. #3
    Junior Member Mneneobho is on a distinguished road
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    Thanks for sharing good reference.

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