Chargebacks and their potential adverse effects on credit scores—even indirect—cannot be disregarded, given how simple the dispute process is. The good news is that chargebacks won’t hurt your company’s credit rating. But if you receive an excessive number of these, your merchant account may be impacted. That may result in increased processing costs or the termination of merchant accounts. If you own a business, it’s crucial to take chargebacks seriously since if you receive one, you’ll lose out on more than the disputed amount.
Along with all the time and money you spend marketing, packaging, and shipping the product, you’ll also lose money on chargeback costs. And if your chargeback ratio crosses a specific threshold, you’ll either have to pay exorbitant processing costs or lose your merchant account. If your merchant account is entirely lost, you’ll need to look for a processor that accepts “high-risk” merchants.
