Mastercard Excessive Chargeback Program

The Mastercard Excessive Chargeback Program is a regulatory mechanism designed to monitor and manage the frequency of chargebacks that merchants incur on transactions processed using Mastercard. This program is critical for maintaining the integrity of the payment system and ensuring that merchants adhere to best practices in transaction processing and customer service.

The program specifically targets merchants whose chargeback ratio exceeds 1% of their total transaction count, which is considered excessive by Mastercard standards. A chargeback occurs when a customer disputes a charge from a merchant and the charge is returned to the customer. High chargeback ratios can indicate problems such as poor customer service, defective products, or fraudulent activities by the merchant.

For merchants, maintaining a chargeback ratio below the 1% threshold is crucial not only to avoid fines and penalties but also to ensure smooth operations and positive customer relationships. For Mastercard, the program helps maintain the credibility and reliability of its payment network by minimizing abuse and ensuring that all parties adhere to agreed-upon standards and practices.