Everything You Need To Know About Chargeback Limits!


Chargeback limits can be a tricky thing to understand, especially when trying to manage your business’s finances. Chargebacks are refunds requested by customers of the goods or services they purchased from you, and chargeback limits are set in place to protect businesses from excessive financial losses due to fraudulent activity. Knowing the various types of chargeback limits and how they work can help you better manage your finances.


Chargeback limits come in several forms, each with its own purpose and limitations. The most common are transaction limits, daily limit restrictions, and merchant account limitations. Transaction limits restrict the amount of money that can be charged back on a single transaction. Daily limits specify the maximum number of chargebacks that can be made in a given day. Merchant account limitations determine the amount of money that can be charged back in total, regardless of the number of transactions or daily limits.


When setting up chargeback limits, it is important to consider your business’s needs and goals. For example, if you have high-value items, you may want to set a higher transaction limit than for lower-cost purchases. Similarly, if you process a lot of transactions in a day, you may want to increase the daily chargeback limit. On the other hand, if your business is prone to fraud or malicious activity, it might be best to keep the limits low and review all chargebacks carefully.


It is also important to be aware of the fees associated with chargebacks, as they can add up quickly. Depending on the payment processor you are using, you may have to pay a fee for each chargeback processed and potentially a penalty if your daily limit is exceeded. Before setting or changing chargeback limits, make sure that you understand all the associated costs.


Ultimately, chargeback limits are a powerful tool to protect your business from financial losses due to fraud, malicious activity, or other types of customer disputes. By understanding what type of chargeback limits you need and how they work, you can better manage your finances and set appropriate limits for your business’s needs.

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