Card networks monitor merchants' chargeback rates and compare them to their sales monthly. If the merchant exceeds the monthly chargeback threshold set by Visa or Mastercard, the merchant will enter them into the program.
As soon as you are on a program, you may be charged a monthly fee until you decrease your dispute activity to an acceptable level.
The Visa Dispute Monitoring Program (VDMP) has three levels: Early Warning, Standard and Excessive.
The merchants with high-risk MCC relate to the excessive Visa program.
Such merchants will be charged fees for any disputes in the first month in the VDMP.
Mastercard's Excessive Chargeback Program (ECP) consists of two levels: Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM).
For both programs, fines start in the second month and continue to increase incrementally over the next few months.
For the merchants with a high-risk MCC, the fee also begins in month two and continues to increase rates in subsequent months.