Billing Limits & Chargeback Thresholds: How Strict Are Processors?

[frodo92]

Hi everyone,

I’m looking for detailed info about how payment processors handle chargebacks when they appear early in the transaction history (e.g., within the first few weeks). Specifically:

1. At what point do processors start taking action if chargebacks are high in the first few weeks of processing?
2. Do they immediately ban your account, or do they wait to see if your chargeback rate improves over time?
3. During this period, do they hold your funds, or are you still able to withdraw while they monitor?

I’d appreciate hearing about any experiences or insights.
Thanks!

 

[polonieth]

Hi everyone,

I’m looking for detailed info about how payment processors handle chargebacks when they appear early in the transaction history (e.g., within the first few weeks). Specifically:

1. At what point do processors start taking action if chargebacks are high in the first few weeks of processing?
2. Do they immediately ban your account, or do they wait to see if your chargeback rate improves over time?
3. During this period, do they hold your funds, or are you still able to withdraw while they monitor?

I’d appreciate hearing about any experiences or insights.
Thanks!

1. As soon as you hit a certain threshold. With most processors you won't make it to anywhere near 1% disputes before issues arise. Visa / MC have their own internal thresholds which if you hit them, the processor is hit with a fine. I imagine Stripe is even stricter now, so perhaps 0.5% is enough of a flag.

2. It's going to depend on how legit the business is. Why would it improve over time?

3, Hold. Or hold a % of it.

 

[Dandyline]

1. As soon as you hit a certain threshold. With most processors you won't make it to anywhere near 1% disputes before issues arise. Visa / MC have their own internal thresholds which if you hit them, the processor is hit with a fine. I imagine Stripe is even stricter now, so perhaps 0.5% is enough of a flag.

2. It's going to depend on how legit the business is. Why would it improve over time?

3, Hold. Or hold a % of it.

Stripe is fine with 1% for many businesses, it all depends on many factors. With a Merchant account, you can go even higher.

 

[polonieth]

Stripe is fine with 1% for many businesses, it all depends on many factors. With a Merchant account, you can go even higher.

Do you think Stripe is okay with a 1% dispute rate? You will be on all monitoring programs at that level.

What factors does it depend on?