What may occur if thresholds are exceeded in the Excessive Chargeback Program?

When thresholds are exceeded in the Excessive Chargeback Program, it is crucial to implement measures that address the issue of high chargeback rates. This program is designed to protect the payment ecosystem by enforcing standards around chargeback levels.

If a merchant surpasses the established thresholds of chargebacks, various actions may be taken to mitigate risk and encourage compliance with chargeback reduction strategies. This includes issuing warnings to inform merchants of their chargeback status, sending alerts to highlight ongoing issues, and imposing fines as a punitive measure for consistently high chargeback rates. These steps serve both as a corrective mechanism and as a deterrent against poor transaction practices.

Therefore, the consequences of exceeding the threshold are intended to promote accountability and encourage merchants to improve their transaction processes to reduce chargebacks. Recognizing these potential repercussions is essential for merchants operating within payment processing networks, as it emphasizes the importance of managing chargebacks proactively.