A chargeback is when a cardholder disputes a transaction with their card issuer and the issuer requests a refund from the merchant.

There are many reasons why a cardholder might dispute a transaction, but some of the most common reasons include:

1. The cardholder didn\'t receive the product or service they purchased
2. The cardholder didn\'t recognize the charge on their statement
3. The cardholder was charged twice for the same transaction
4. The product or service was not as described
5. The merchant did not obtain authorization for the transaction

What are chargeback limits?

Chargeback limits are the maximum number of chargebacks a merchant can receive in a given time period before their account is at risk of being terminated. Most acquirers have chargeback limits ranging from 1-3% of total transactions, but some acquirers may have higher or lower limits.

What happens if I exceed my chargeback limit?

If you exceed your chargeback limit, your acquirer may terminate your account and you will no longer be able to accept credit card payments.

How can I reduce my chargebacks?

There are a few things you can do to reduce your chargebacks, including:

1. Offer excellent customer service : Respond quickly and professionally to customer inquiries and complaints.
2. Obtain authorization for all transactions : Make sure you obtain authorization for every transaction, even if it\'s just a small purchase.
3. Use AVS and CVV verification : Verify the customer\'s billing address and card security code to help reduce fraud.
4. Don\'t ship to unconfirmed addresses : Only ship orders to the customer\'s confirmed billing address to help reduce friendly fraud.
5. Keep your chargeback ratio below 1% : Try to keep your chargeback ratio below 1% of total transactions.
6. Use a fraud prevention service: Use a fraud prevention service like Kount or FraudLabs Pro to help reduce fraud and chargebacks.

Final Thoughts - Chargebacks can be a real headache for merchants, but by following the tips above you can help reduce your chargebacks and keep your account in good standing.

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