How chargebacks happen
A chargeback occurs when a customer disputes a transaction with their card issuer (their bank) rather than the merchant directly. The card network reverses the transaction, the merchant loses the revenue and the goods, and is typically charged a $25–$50 chargeback fee. Common reasons for peptide-merchant chargebacks:
- Fraud disputes — "I didn't make this purchase" (often legitimate stolen-card fraud, sometimes friendly fraud)
- Product not received — shipping delays, customs holds (international peptide shipments are notorious)
- Product not as described — packaging differs from website, dosing different from expected
- Subscription not cancelled — customer initiated cancellation but got billed anyway
How ratios are calculated
Two ratios are tracked separately:
- Count ratio = chargebacks last month ÷ transactions previous month
- Value ratio = chargeback dollars last month ÷ transaction dollars previous month
The ratio uses the previous month's volume as denominator because chargebacks lag transactions by 30–120 days. Crossing 1.0% count for two consecutive months enters you into Mastercard ECP. Crossing 1.5% triggers immediate review.
What happens above threshold
The cascade: warning letter → ECP enrollment ($1,000+ monthly fine + mandatory mitigation plan) → MID termination if not remediated in 4 months → MATCH listing under Reason Code 04. The whole sequence can play out in under 6 months for a brand that doesn't aggressively manage disputes.
How PeptideRails handles chargebacks
We provide a chargeback dashboard, automatic representment for clear-cut wins (signed proof of delivery, signed authorization, product-as-described evidence), and a flat fee per dispute that is refunded if we win on your behalf. Most peptide brands working with PeptideRails maintain chargeback ratios under 0.6% — well below Mastercard's thresholds. We do not paper over high chargeback ratios; if your ratio is structural rather than circumstantial, we'll surface that during underwriting.