What are Mastercard’s ECM and HECM thresholds?
Mastercard’s Excessive Chargeback Program has two levels. A merchant is an Excessive Chargeback Merchant (ECM) with 100 to 299 chargebacks and a chargeback ratio of 1.5% to 2.99% in a month. It is a High Excessive Chargeback Merchant (HECM) with 300 or more chargebacks and a ratio of 3% or more. Both conditions must be met.
In detail
Mastercard’s Excessive Chargeback Program (ECP) identifies merchants with too many chargebacks, at two levels.
The two levels
- ECM (Excessive Chargeback Merchant): 100 to 299 chargebacks in a month and a ratio between 1.5% and 2.99%.
- HECM (High Excessive Chargeback Merchant): 300 or more chargebacks and a ratio of 3% or more.
A merchant must meet both the count and the ratio. A small merchant with 20 chargebacks and a 5% ratio is not in the program.
How the ratio is calculated
Mastercard divides the chargebacks received in a month by the sales transactions of the previous month. A merchant whose volume drops can see its ratio rise with no new dispute.
The acquirer is notified and must report on the merchant’s corrective actions. Fines start from the second month and increase with the number of months in the program. They are higher for HECM. A merchant exits after three consecutive months below the thresholds.
Mastercard also runs a separate Excessive Fraud Merchant program for e-commerce fraud. See card scheme monitoring programs and chargebacks. Resolving cases early with pre-chargeback alerts keeps chargebacks out of the count.