Chargeback ratios, and keeping them low
The card associations do not like when merchants receive a high number of chargebacks. Ideally, you'll keep your chargeback count to less than 0.25% of your total sales.
From the card associations' perspective, having a high chargeback ratio can be indicative of a business running deceptive campaigns, selling shoddy products, or that doesn't fulfill the level of service they offer with their product. Obviously, this is bad for the associations - they don't want their cardholders to be taken advantage of by anyone - that's bad business for everyone. So, they implement rules and guidelines for dispute management.
It's not set in stone, but the general rule of thumb is that any given merchant should only have a 0.25% chargeback ratio, or less. That means that for every 400 transactions they process, only one is disputed. For a retail/restaurant merchant, this should be no problem. But for some online retailers, and merchants who sell certain merchandise types - 0.25% is just far too low. There are some industries that just inherently have higher chargebacks. Visa/MasterCard accommodate for this, and generally allow more leeway in industries where disputes are expected.
Regardless of your industry, if the associations reach out and request a chargeback reduction plan, the merchant is bound to comply - or they risk losing the ability to accept the major credit card brands. Usually, chargeback reduction has a combination of the below:
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Implementing digital tools on their website to combat fraud (captchas, more advanced IP blocking, better filters for catching out-of-bounds sales)
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Increasing customer communication, and possibly providing scripts to agents to ensure they're following all rules and outlining all upcoming costs/schedules
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Changing internal protocols to more quickly focus on potentially fraudulent/problem orders, and prevent fulfillment
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Hiring an external chargeback mitigation firm to professionally respond to chargebacks on behalf of the business
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