The Chargeback reserve

The Chargeback reserve is a security deposit that:

• protects Mews from having negative balances on hotel Mews Payments accounts, and
• helps hotels to keep enough balance for incoming chargebacks.

In this article you can learn:

• How Mews calculates chargeback reserve

 

How Mews calculates chargeback reserve

Mews calculates chargeback reserve by multiplying chargeback ratio from 180-90 day period and volume from the last 90 days. It then multiplies the final amount further by the actual "global risk multiplicator".
 

The "global risk multiplicator" represents:

• Expected risk in the overall economic environment and starts at 1 in the standard condition, but 
• Can raise to higher amounts if Mews expects the future chargeback or refund risk to be higher than in the previous periods.

Mews:

• Calculates the reserve amount on an individual property basis, so different properties in the same chain can have different reserve amounts.
• Looks at your chargeback ratio, i.e. the percentage of payments that were charged back for your recent transactions and adjusts it to reflect global financial risk levels. Mews recalculates and adjusts this every seven days.

Newly onboarded Mews users with insufficient payment history inherit a reserve balance which Mews calculates based on similar users with similar volumes until Mews can calculate their own reserve balance.


You can learn more about how chargeback reserves are displayed in The Mews Payments balance report here .