MCC 5968 pertains to businesses that offer subscription services using a negative option model, where customers automatically receive and are charged for items unless they take action to cancel.
High Risk
This MCC is considered high-risk for chargebacks and disputes due to the nature of negative option subscriptions, where customers may not realize they are being charged for ongoing services. This can lead to frequent cancellations and disputes over charges. Customers may dispute charges if they feel they were not adequately informed about the subscription terms or if they believe the service was not as described. However, this MCC is not typically blocked by card issuers.
Interchange Fee
Interchange fees for MCC 5968 generally range from 1.5% to 3%, depending on the card network and issuer agreements. Fees may vary due to subscription nature and risk profiles.
Cashback Rewards
Cashback rewards for purchases under this MCC can vary. Many issuers limit cashback rates to 1% or lower due to the recurring nature of subscriptions, though promotional offers may apply.
Rules and Restrictions
There are no special rules or restrictions that payment processors impose for transactions processed under MCC 5968.
Tax Reporting
IRS tax reporting for MCC 5968 may be influenced by the type of subscription and service. Buyers should seek specific guidance on applicable taxes for subscriptions in their jurisdiction.