The curent financial crisis is affecting big and small business alike, one of the sources is the downgrade of spending of the average consumer, which financialy affects the overall progress and earning reports of a business but still from the risk factor is a managable situation.
The Risk begans when consumers can not meet their credit obligations and began to find ways to get a return of money. On the card not present world and encourage by banks and card associations there is procedure called charge back. what in means is that you call your bank claiming for whatever reason that this was not a conciouss purchase and your money gets returned, needless to say the merchandise or service may still belong to the consumer.
Now they are procedures that merchants can do, in order to fightback the claim but usually are fruitless, in markets like EU the fight back is a bit more consistent and with better results.
Card asociations and banks have come with a metric called the allowed charge back ratio, this is between 0.5% upto 1.5% (ther are excepitions to this rule).
The risk of loosing a merchant account due to charge backs is costly, under this fiancial enviorment maybe even devastating.
Many startegies though can be implemented to maintain a charge back ratio nunder the scope, but i think that is another topic.
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