When it comes to your chargeback ratio, you can be considered a high risk merchant account if you have a chargeback rate above 1%. This is a threshold that most credit card processing companies and banks will use to determine whether you’re a good fit for their services.

If you exceed this threshold, your credit card processor will likely request that you implement a chargeback mitigation plan or place you on a probationary period. This is a common practice among tier-one banks and other financial institutions that deal with high-risk merchants.

The most effective way to reduce your chargeback ratio is to work with a credit card processing company that offers a comprehensive chargeback management program. They will monitor your chargebacks on a regular basis and help you prevent them in the future.