Card networks (Visa and Mastercard) monitor the ratio of merchants monthly disputes relative to merchant's total transaction volume:
Dispute Ratio = Total Monthly Disputes / Total Monthly Settled Transactions x 100
Most schemes place the risk threshold between 0.9% and 1.0% (or roughly 90–100 disputes per 10,000 transactions). If merchant is entering an Excessive Chargeback Program results in hefty monthly non-compliance fines, mandatory audit programs, higher per-transaction processing fees, and potential requirements for rolling reserves or account termination.
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