Merchant Account Chargeback Ratio

The chargeback ratio is the percentage of total chargebacks to total credit card transactions expressed as a percentage.

For Example:
A business would have a chargeback ratio of 1%, if they had 100 total credit card authorizations and 1 chargeback.

A merchant service provider's tolerance for chargebacks is directly related to the overall risk factor associate with the account as judged by the underwriters and the security department for the provider.

Overall, most providers become wary if a merchant's chargeback ratio is 1% or higher. Of course, a high risk merchant account will have a higher tolerance for chargebacks.