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Chargebacks – 1% – Unreasonable Card Schemes

Hi All,

I thought I'd add to the discussion here as I wanted to get peoples thoughts on Chargebacks and Chargeback abuse. As I understand it the card schemes VISA and MC have lowered their bar again for "acceptable chargebacks" as a ratio from 1% to 0.9% (or so I was told by various sources).

Looking into my data just now I have to say I am really surprised how any business selling moderate to expensive AOV items can avoid going over this ridiculously low threshold. My AOV is about 70-80 USD per item.

So far I have about 3300 transactions of which 2200 of those are with PayPal and the other 1100 are with "Shopify Payments" which is underwritten by Stripe.

Like many of us I have the Shopify "Fraud Recommendations".

Of those 1100 credit card transactions I have received 10 chargebacks over the last 4 months meaning a ratio of just about 0.9-1% chargebacks.

Where did all these chargebacks come from?

They were all "fraudulent orders" despite AVS and CVV responses being a match and Shopify Payments marking them as "low risk" orders.

So what's your point what's the TLDR?

My point is that even following the recommended advice on Fraud Orders and those orders being AVS/CVV match it is still EASY to hit the maximum recommended chargeback % ratio.

So I'm struggling to see how the card schemes think any of this is fair or reasonable to online merchants when their customers are chargeback abusers and the banks don't even try to stop them?

Following the recommended fraud advice and even with CVV and AVS full matches you still get equal to the recommended maximum chargebacks allowed.

So why do we have these card schemes thinking 1% is a normal ratio for online purchases that are rife with chargeback abusers to "get free stuff". All of the chargebacks I have are from low risk orders with AVS and CVV full matches and even given that I'd wager half or more will be "awarded to the cardholder" by whatever asshat banker can't notice its an AVS match.

I've even got chargebacks being filed for bloody APPLE FACE ID CONFIRMED orders.

submitted by /u/Angelus512
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