What is typically expected from a high-risk chargeback monitoring program?

A high-risk chargeback monitoring program is designed to closely track chargeback rates for merchants who are categorized as high-risk due to various factors such as the nature of their business, transaction volume, or previous chargeback history. The primary objective of such a program is to manage and reduce the instances of chargebacks that these merchants experience.

Notification when chargeback rates exceed defined thresholds is essential because it allows the merchant to take preemptive action before the situation worsens. By receiving alerts about increasing chargeback rates, the merchant can investigate the cause and make necessary adjustments to their business practices, customer service, or fraud prevention measures. This proactive approach is crucial for maintaining the health of a business and ensuring compliance with payment processor requirements, thereby protecting the merchant's standing with their payment provider.

The emphasis on monitoring and notification, rather than immediate transaction approval or changes in the categorization of business locations, highlights the importance of risk management in high-risk environments. This ensures that merchants can maintain sustainability and minimize financial losses associated with excessive chargebacks.