Merchants with excessive chargeback rates are considered high risk for both acquirers and their processors. From a compliance standpoint, high chargeback rates are a clear indicator that the merchant may not be aligned with PCI DSS standards or worse yet, may be engaged in some form of insider fraudulent activity.
With that said, merchants with excessive chargebacks tend to find themselves on the MATCH list, essentially blacklisting them from having a relationship with acquirers, Payment Facilitators, and third-party payment processors; thus, preventing the merchant from accepting payment cards. Even if the merchant is not placed onto the MATCH list, the acquirer will most likely rescind their MID (Merchant Identifier) if chargeback rates cross certain predefined thresholds (specific to each acquirer).
In today’s all-digital world, the inability to accept payment cards can have significant long-standing impacts on the success/failure of a merchant’s business. If the merchant is e-commerce based, the survival of their business is at serious risk because customers use payment cards for most, if not all, e-commerce transactions.