Too Many Chargebacks? You Might Be On The MATCH List

Chargebacks are often an inevitable part of doing business. Whether it is an error on your part, such as an accidental double-charge or a customer’s product arrived damaged or defective, or an error on their part, such as a customer’s card was stolen and used to purchase from you, chargebacks will happen throughout your life in business. Mastercard understands this and, as such, allows chargebacks to a certain extent. However, when chargebacks become excessive, you can start running into issues, such as getting your merchant account terminated. Keep reading to learn more about what to do if you’re getting too many chargebacks and what to do if you now have a terminated merchant account due to excessive chargebacks.

What is a Chargeback?

According to Mastercard, when a customer disputes a debit or credit card transaction, the card issuer must determine whether to provide that cardholder with a refund for the transaction amount, also known as a chargeback.

The overall chargeback process is complex and time-consuming. Unless the issuer can quickly determine that the transaction dispute is invalid, it will initiate a chargeback. Here’s a closer look at some of the causes of chargebacks.

Why Are Chargebacks Bad?

Also according to Mastercard, due to the costs and time involved with the process of chargebacks, they are a growing concern for both merchants and issuers, especially as the number of chargebacks soars with the explosion of e-commerce. In fact, the cost of chargebacks is expected to reach more than $1 billion by 2023, up from $690 million in 2020, according to an Ethoca-commissioned Aite Group study.

There are many implications for a business of having too many chargebacks, including getting a bad reputation, costing too much money, and the fact that they can land you on the MATCH List.

Bad Reputation and Reviews

If a customer has a bad experience with you that results in a chargeback, they have the power to write reviews about your business and damage your reputation. Bad reviews do happen; however, if the chargebacks and bad experiences are excessive, it can do some serious damage to your business.

They Cost You Money

As mentioned earlier in this blog, chargebacks cost time and money to resolve. Not only are you out time and money from processing the initial order and now need to refund it, but your time is worth money as well. The more time you spend with unhappy customers and chargebacks, the more your profits get eaten into.

They Can Land You on the MATCH List

If you have a chargeback rate higher than 1%, you run the high risk of getting placed on the MATCH List, which will terminate your merchant account. This means that you will not be able to use your merchant account for up to five years until you are aged off the list. Your name, associates’ names, addresses, phone numbers, and much more information are on this comprehensive list to ensure no loopholes.

Why Do People File Chargebacks?

If you’re wondering why you are getting so many chargebacks, it is important to look at all of the reasons why someone would file one in the first place. Take a look at your chargebacks and see if there is a pattern that you can fix.

The most common reasons people file a chargeback are:

• Unrecognized charge
• Item or service was never received
• Item was damaged or defective
• Item or service was purchased without their consent
• Duplicate charges

What If I Am Getting Too Many Chargebacks?

If you are getting too many chargebacks and want to make sure you do not get on the MATCH List and lose your merchant account, there are many things you can do to help the situation. They include keeping detailed records, improving your customer service, and updating your website to be as clear as possible.

Keep Detailed Records

Make sure you keep detailed records about every purchase that is made through your business. This will help you if your business does get placed on the MATCH List. it can also help you if you choose to reach out to a customer to speak with them, resolve their issue, and ask them to reverse the chargeback. The more information you have to protect yourself in the event of getting placed on the MATCH List, the better.

Improve Your Customer Service

The most important aspect of reducing the number of chargebacks you receive is to improve your customer service department. In most cases, a customer will reach out to a business to resolve a small issue, such as receiving the wrong product, fixing a damaged product, or otherwise righting a wrong. If you are not responsive in a reasonable amount of time or do not give customers a quick and easy way to reach out to you, they will go straight to filing a chargeback.

Make sure you have an email address, phone number, or customer service chatbot stated clearly on your website. Make sure these accounts are monitored daily, queries are responded to in a timely fashion, and you do whatever you can to avoid chargebacks by getting in front of them.

Update Your Website

Make sure your website not only has contact information that is easy to access, but that it also has a policy that is clear and easy to access, as well. This can mean return policies, exchange policies, refund policies, and response times. This way, the customer has clear expectations on what to expect, and your policy protects you from chargebacks.

Too Many Chargebacks Can Cause You to Lose Your Merchant Account

The most important thing to remember about having too many chargebacks is that it can cause you to lose your merchant account. As mentioned earlier in this blog, a chargeback rate of over 1% can get your merchant account terminated by your bank, making it nearly impossible to conduct business for the next five years until you are aged off the MATCH List.

The MATCH List is comprehensive and difficult to navigate. In fact, your bank or payment processor does not even need to notify you that you are on the list or why. Most often, people find out by getting a notice that their account has been terminated or they have been rejected when applying for a new one. While this might seem unfair, it is the way the system is designed to protect banks and customers as much as possible, leaving small businesses without a way to navigate through.

What to Do If You’re On The MATCH List

If you are on the MATCH List due to too many chargebacks, you are not alone. Excessive chargebacks are the most common reason that businesses get placed on the MATCH List. Luckily, you do not have to wait the five-year penalty period to get back to business if you have lost your merchant account.

Early Removal with TFM Law

If you have found yourself on the Match List, you have options. Don’t wait the five-year period, get back to business ASAP.

The Law Offices of Theodore Monroe focuses on litigation and counseling in the areas of payments, credit card processing, e-commerce, direct response marketing, and Federal Trade Commission enforcement.

Last year, the firm removed 100% of the people who came to us from the MATCH list.

Theodore F. Monroe, Founder of TFM Law, has successfully:

• Represented merchants recovering funds from processors
• Structured processing relationships to comply with the Card Brand requirements
• Drafted and negotiated contracts involving payment facilitators and ISOs
• Represented continuity merchants in compliance and litigation issues
• Fought for numerous companies in suits brought by the Federal Trade Commission and obtained excellent results for firms in the digital products, loan modification, government grant, and nutraceuticals industries

Before opening his firm, Mr. Monroe practiced law with Crosby, Heafey, Roach & May (now Reed Smith LLP) and Lewis, D’Amato, Brisbois & Bisgaard (now Lewis, Brisbois, Bisgaard & Smith), where he defended numerous accounting and law firms in professional liability actions, and insurance carriers in bad faith actions.

Before becoming a lawyer, Mr. Monroe worked as a forensic accountant at Coopers & Lybrand, which provided him with a unique background in forensic accounting and financial analysis among litigators in Los Angeles. Mr. Monroe studied at Duke University Law School, achieved a BS with Honors in Accounting from the University of Kentucky, and is a member of the California State Bar and the Kentucky State Bar.

For more information and to get off the MATCH List, visit us at HowToGetOffMatch.com!