Chargeback Limits: A Guide For Merchants Guide to credit card chargeback limits
Chargeback limits are the maximum amount of money that a merchant can be charged back for in a single transaction. This limit is typically set by the card issuer, and may vary depending on the type of card used. For example, Visa’s standard chargeback limit is $50, while Mastercard’s is $100.
Why do chargeback limits exist?
Chargeback limits exist to protect merchants from excessive chargebacks. Chargebacks can be costly for merchants, as they often involve fees and can lead to additional charges if the merchant is found to be at fault. By limiting the amount that can be charged back in a single transaction, card issuers help to reduce the financial impact of chargebacks on merchants.
What happens if a chargeback exceeds the limit?
If a chargeback exceeds the limit set by the card issuer, the merchant may be responsible for the difference. In some cases, the merchant may also be charged an additional fee. It’s important to check with your card issuer to find out their policy on chargebacks that exceed the limit.
What can merchants do to reduce the risk of chargebacks?
There are a few things that merchants can do to reduce the risk of chargebacks, including:
- Making sure that all charges are authorized by the cardholder
- Keeping accurate records of all transactions
- Making sure that goods or services are delivered as promised
- Responding quickly and appropriately to customer complaints
By taking these steps, merchants can help to reduce the risk of chargebacks and limit their financial exposure in the event of a chargeback.
Chargeback limits can help to protect merchants from excessive chargebacks. By understanding how chargeback limits work and taking steps to reduce the risk of chargebacks, merchants can limit their financial exposure and keep their businesses running smoothly
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