Free calculator · for merchants
What is a chargeback really costing you?
The fee is the smallest part. You lose the order, the goods, the shipping you already paid for and the time spent assembling evidence — and the fee on top. This prices all five, and shows where your ratio sits.
What a chargeback is
A chargeback is a forced reversal of a card payment, initiated by the cardholder through their bank rather than by asking you for a refund. The money is taken back, the acquirer charges a fee, and the merchant may contest it with evidence — a process called representment. Disputes are also counted as a ratio against your transactions, which acquirers and card networks monitor.
Your dispute maths.
Prefilled with an illustrative store. The threshold field is deliberately empty — ask your acquirer for the number that applies to you.
Disputes, a year
$49,702
At 0.64% of orders, costing $129.43 each — against a $15 fee.
- Recovered by winningorder value only — the fee and time are spent either way
- $5,222
- Net cost a year
- $44,480
- Admin time a month
- 13.3 h
- Headroom to your thresholddisputes before you cross it
- —
Enter your acquirer's monitoring threshold to see how much headroom the rate leaves. We deliberately do not supply one.
The families, and what actually prevents each
Reason codes differ by network and change. The families do not, and the family is what tells you which operational thing to fix.
| Family | What they told the bank | Winnable? | What prevents it |
|---|---|---|---|
| Fraud — card not present | I did not authorise this transaction. | Sometimes | Address and CVV verification, 3-D Secure on risky orders, and device or velocity checks. Winning representment needs delivery evidence tying the goods to the cardholder, which most stores cannot produce after the fact. |
| Product not received | I paid and nothing arrived. | Often winnable | Tracking with delivery confirmation, and proactive messaging when a parcel stalls. This family is usually a logistics failure wearing a fraud costume, and the evidence to win it exists if you kept it. |
| Not as described | What arrived is not what was sold. | Sometimes | Accurate product data — sizing, materials, quantities, photography that matches the item. The same product data that makes a page legible to a model prevents this dispute. |
| Subscription and recurring | I cancelled and was charged again. | Rarely winnable | A cancellation that works in one tap, a reminder before every renewal, and a clear descriptor. Almost every dispute in this family is preventable, and almost none is winnable once filed. |
| Processing error | Wrong amount, duplicate charge, or a refund that never arrived. | Often winnable | Refund promptly and visibly. A customer who has waited ten days for a refund files a dispute for a charge you already agreed to reverse. |
| Unrecognised descriptor | I do not recognise this charge. | Often winnable | The cheapest fix on this list: make the billing descriptor your trading name rather than your legal entity. A meaningful share of 'fraud' disputes are a customer failing to recognise a holding company on a statement. |
Winnability is our judgement from working these, not a published statistic, and it varies with the evidence you actually keep. No benchmark chargeback rate or network threshold appears anywhere on this page — rates vary by category and thresholds change. metric to confirm. Reviewed 2026-09-09.
Fix in this order
Cheapest and most preventable first.
- The billing descriptor One conversation with your gateway. A share of disputes filed as fraud are a customer not recognising a legal entity on a statement, and this eliminates them rather than winning them.
- Cancellation that works in one tap Subscription disputes are mostly preventable and mostly unwinnable. A customer who cannot find the cancel button files a chargeback instead — and wins.
- A pre-charge reminder before every renewal Removes the “I forgot I was subscribed” dispute entirely, at the cost of some voluntary cancellations you would rather have as cancellations than as disputes.
- Refund speed A customer waiting ten days for a refund files a dispute for money you already agreed to return — and you then pay the fee on top of the refund.
- Then representment, selectively Contest the families where the evidence exists in your own systems. Fighting everything spends staff time at a rate that usually exceeds what it recovers.
What this does not model
Reserve requirements. A sustained high ratio can lead an acquirer to hold a rolling reserve against your payouts, which is a cash problem far larger than the disputes themselves.
Losing the account. The end state of a monitoring programme is termination, and finding a new acquirer with that history is expensive and slow.
Fraud prevention costs. Screening tools, 3-D Secure friction and the orders you decline in error all cost money. Reducing chargebacks to zero by rejecting good customers is not a win.
The refunds you gave instead. Many disputes are prevented by refunding on request. That is the right call and it is not free — it just does not show up here.
Definitions
- Chargeback
- A forced payment reversal initiated through the cardholder's bank.
- Representment
- Contesting a dispute with evidence. Worth doing selectively, by family.
- Chargeback ratio
- Disputes over transactions, monitored by acquirers and card networks against thresholds they set.
- Billing descriptor
- The text on the cardholder's statement. The cheapest chargeback fix there is.
- Friendly fraud
- A genuine purchase disputed as unauthorised. Hard to win, and often a descriptor or memory problem rather than deliberate abuse.
Questions about chargebacks
What does a chargeback actually cost?
Far more than the fee. You lose the order value, which is reversed; the goods, if they are not coming back; the fulfilment you already paid for; the dispute fee your acquirer charges; and the staff time spent gathering evidence. On the worked example above, a $15 dispute fee is part of a cost per dispute several times larger.
What is a chargeback ratio?
Disputes divided by transactions, usually monthly. Card networks run monitoring programmes that use it, and acquirers set their own limits on top. We do not print a threshold here because they change and differ by network and region — ask your acquirer for the number that applies to you and enter it, and the calculator will show your headroom.
Should I fight chargebacks?
It depends on the family. Product-not-received and processing errors are often winnable because the evidence exists in your own systems. Subscription disputes rarely are, since the cardholder genuinely did try to cancel. Fighting everything indiscriminately spends staff time at a rate that usually exceeds what it recovers — the table on this page sorts them so you can choose.
What is the cheapest thing to fix first?
The billing descriptor. A meaningful share of disputes filed as fraud are a customer failing to recognise a legal entity name on a statement. Changing the descriptor to your trading name costs one conversation with your gateway and eliminates a category of disputes rather than winning them.
How do subscription chargebacks differ?
They are mostly preventable and mostly unwinnable, which is an unusual and expensive combination. The customer tried to cancel and could not, or forgot the renewal was coming. A cancellation that works in one tap and a reminder before every charge remove the cause; representment after the fact rarely succeeds because the cardholder's account of events is broadly accurate.
Do you publish benchmark chargeback rates?
No. Rates vary enormously by category, price point and payment mix, and we have not measured a distribution we would publish. Your own rate over time, against the threshold your acquirer actually applies, is the comparison that matters.
Related
Find out what you’re losing.
Before you commit to anything, we tell you exactly what you’re losing and what it costs to stop it. Two weeks. Fixed fee. Credited in full against any build you go ahead with.
- Fee
- $1,500–$3,000, fixed
- Duration
- Two weeks
- Credited
- In full, against any build
- You supply
- Read access + one 45-minute call