GLOSSARY · CHARGEBACKS AND FRAUD
Chargeback ratio
A chargeback ratio is the share of a merchant’s card transactions disputed in a month, the figure card networks use for their monitoring programs.
Also called Dispute rate · Chargeback rate · Dispute activity
Card networks watch how many disputes each merchant receives relative to its sales. Above a threshold, the merchant enters a monitoring program, with fees and a remediation plan, and can ultimately lose the ability to accept that card brand.
The networks do not count the same way. Visa compares disputes and fraud reports with transactions in the same calendar month; Mastercard compares the month’s chargebacks with transactions in the previous month. Both assign a dispute to the month it was received, not the month of the original payment, and refunds do not cancel a dispute already filed.
Processors may show two different figures: one by dispute date, used by the monitoring programs, and one by payment date, which is better for spotting the sales that caused trouble. Watch the first to stay out of programs, and the second to find the cause.
Formula
Disputes received in the month ÷ card transactions in the same month (Visa) or in the previous month (Mastercard) × 100
Related terms
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Sources
- Stripe Docs: Dispute and fraud monitoring programs docs.stripe.com
- Stripe Docs: Measuring disputes docs.stripe.com
- Adyen Docs: Dispute and fraud monitoring docs.adyen.com