Chargebacks, fortunately, will not have a negative impact on your company’s credit score. However, if you have a large number of them, they may have an impact on your merchant account. Higher processing fees and/or the loss of merchant accounts may result as a result of this.

If a chargeback is determined to be friendly fraud by the bank, the cardholder may be penalized or their account may be canceled. The cardholder’s credit score may worsen if their bank account is canceled due to chargeback abuse.

In some circumstances, Merchants might raise their pricing to compensate for chargeback fraud, which damages all consumers.