There are costs involved in a Chargeback aside from losing goods and profits. Please note that Chargebacks are governed by the Card Scheme rules and issuing banks, and therefore, Assembly does not have any control at any given time when Chargeback fees and any associated costs are changed.
A Chargeback fee is charged by the Acquiring bank to the Merchant (may be Assembly or the Customer depending on the level of Defend Service you have) each time we receive a Chargeback which covers administrative costs for processing the dispute. Chargeback fees are non-refundable regardless of the outcome of the Chargeback case.
In Australia and New Zealand, Chargeback fees ranges from $15.00 AUD to $50.00 AUD depending on the Acquiring bank. In the United States, Chargeback fees ranges from $10.00 USD to $30.00 USD depending on the Acquiring bank. These fees can increase to up to $150 USD per Chargeback, and may include further penalties, if the Merchant in question exceeds the Card scheme's Chargeback and/or Fraud rate thresholds.
Should a Merchant exceed these thresholds, Acquiring banks may enrol a Merchant to the Card scheme's Chargeback Monitoring program and will be required to provide mitigation plan within a set timeframe, or risk having their merchant facility being cancelled.
It is important that you respond promptly and provide proper documents and evidences when a chargeback notification is received to be able to properly represent and potentially win a Chargeback case.
To know more on how to prevent Chargebacks, please click this link.
Other costs may involve Arbitration fees. There would be higher fees charged when escalating a Chargeback in an Arbitration that may take up to $500.00 USD for filing and review that will be charged against the losing party. In addition, a technical fine of $100 USD per incident will be charged against any party with a technical violation of the scheme rules, regardless of whether the party wins the case. Assembly rarely enters into an Arbitration case. Only when the evidence and documents provided are strong and have a good chance in winning the case.
To learn more about Arbitration, click here.