The Mastercard Excessive Chargeback Program (ECP) is a Mastercard program that monitors and remediates high chargeback levels. Credit card networks such as Mastercard want to maintain a reputation of trustworthiness among their customers. When a single merchant receives a high number of chargebacks, it signals to Mastercard that the merchant in question could potentially harm their brand.
In this article, we’ll explain what the ECP is, how it ties into related Mastercard programs, and how you can either stay out of the ECP or exit.
What Is the Mastercard Excessive Chargeback Program?
The Mastercard Excessive Chargeback Program (ECP) is a compliance framework designed to identify and manage merchants with unusually high chargeback activity. It exists to help Mastercard protect its network’s integrity and customer trust—flagging businesses that might indicate poor transaction practices, fulfillment issues, or fraud risk.
To monitor merchants fairly, Mastercard uses two key metrics:
- The number of first presentment chargebacks in a calendar month
- A calculated basis point score that compares chargebacks to total transactions
Merchants who cross both thresholds are placed into one of two categories:
- Excessive Chargeback Merchant (ECM): 100+ chargebacks and 150+ basis points
- High Excessive Chargeback Merchant (HECM): 300+ chargebacks and 300+ basis points
Being enrolled in the ECP comes with escalating consequences—starting with fees after two qualifying months (even if non-consecutive), and potentially leading to reputational damage or account termination. That’s why proactive prevention, real-time alerts, and clear customer communication aren’t just best practices—they’re essential.
Merchants must stay below 2 key thresholds to avoid ECP enrollment
To be entered into the Mastercard Excessive Chargeback Program, you have to pass a specific threshold. There are two main thresholds that Mastercard monitors for each merchant ID:
- number of chargebacks
- calculated basis points
Mastercard calculates a merchant’s basis points by taking the number of first presentment chargebacks in a calendar month and then dividing that number by the amount of chargebacks in the preceding month. They multiply the resulting number by 2000.
For example, if you have 1,500 first presentment chargebacks in May and 7,500 transactions in April, you would wind up with 200 basis points.
There are two levels of chargeback severity: Excessive chargeback merchant (ECM) and High excessive chargeback merchant (HECM). If a merchant meets or exceeds 100 chargebacks and 150 basis points in a calendar month, Mastercard classifies it as an ECM. Likewise, if a merchant meets or exceeds 300 chargebacks and 300 basis points in a calendar month, Mastercard classifies it as an HECM.
The consequences of being enrolled in the Mastercard Excessive Chargeback Program
Enrollment in the ECP comes with consequences. Firstly, there are fees (aka non-performance assessments) that arise. Non-performance assessments start when a business has been identified as an ECM or HECM for two months, and these two months do not have to be consecutive. The fees also increase the longer a merchant remains in one of these programs.
Enrollment in ECP also comes with reputational damage. This reputational damage can lead to losing your Mastercard privileges or even your acquiring bank since both of these parties want to maintain the trustworthiness of their brands.
How to avoid enrollment in the ECP program or exit if you’re already there
One of the most helpful ways to avoid enrollment in the Mastercard Excessive Chargeback Program is to sign up for pre-chargeback alerts.
Automated chargeback management and prevention tools help you manage a dispute before it becomes an official chargeback. For instance, with ChargebackStop you can prevent 95% of chargebacks with Ethoca Alerts and Verifi RDR. In some cases, these tools can help you put together the best possible representment package.
Another helpful step is proactive chargeback management. This includes improving product and service quality. If you are a merchant and you find that customers are filing a large number of disputes, it’s time to get curious. Pick up the phone, call your customers, and ask them what you could have done better.
At best, you can fix the issue and they’ll cancel the dispute. At worst, they proceed with the dispute, and you have some great feedback with which to improve your business processes. On that note, there are automated solutions that can help you analyze your transaction data in order to identify patterns within your disputes.
Another important way to avoid chargebacks is to include clear billing descriptors. When a customer purchases your product or service using their credit card, your company name shows up on their statement. If you’re using a generic name (e.g., 123 Holding Company) but they’ve bought a blouse from you, they may not recognize the company name and report it as fraud. In this case, a clear billing descriptor like, “Fashion Depot” would be more helpful.
In some cases, however, customers use friendly fraud as a cost savings method. This is when customers dispute a charge simply because they do not want to pay the fee. In this case, it’s important to have a clear refund policy in place and to document that the customer has agreed to this, either through user logs or a signed contract. This documentation gives you the compelling evidence you need to fight a potential friendly fraud dispute.
If you find yourself in the ECP, it may be a good idea to work with your acquiring bank on a compliance plan. Acquiring banks can potentially stop extending merchant account services to you if you continue to pose a risk.
Avoiding entry into chargeback penalty programs is essential for sustainable growth
It is critical for businesses to stay under the chargeback thresholds. The ability to accept a wide variety of payments is an important factor in long-term, sustainable growth. Investing in proactive dispute management through automated tools, clear terms and conditions and refund policies, and improved customer service are the best ways to do this.
You can book a call with a member of the ChargebackStop team here to learn more.
