too high of a chargeback ratio can make doing business very difficult. The industry standard is a 1% chargeback rate. Anything higher than this and you may be flagged as a high-risk merchant, which comes with some serious consequences. Because of the risk incurred by payment processing companies and merchant banks, they typically take steps to protect themselves when dealing with high-risk businesses. Therefore, high-risk businesses face higher processing costs, limited cash flow if their bank decides to keep rolling reserves to mitigate risk, or even a loss of their ability to process credit card payments if their payment processing company deems them to be too risky.