How Much Does a Chargeback Cost a Merchant?

The short answer: a chargeback costs you the disputed amount, a dispute fee from your processor, and whatever you had already spent on the order. On Stripe in the United States, a lost $200 dispute you did not fight costs $215 before you count the goods. Winning brings the $200 back, but not every fee.

Key points

• The money leaves your balance when the dispute opens, not when it is decided.
• Stripe charges one fee for receiving a dispute and another for countering it.
• Winning returns the sale. It does not return every fee.
• The goods, the shipping and your time are costs no processor refunds.

What is taken, and when?

The disputed amount and a fee, at the start. Stripe's description: it "debits your Stripe balance for the disputed amount plus a dispute fee", and "the fee for receiving a dispute is deducted from your account balance when a cardholder initiates a dispute."

Stripe's pricing page, in US dollars, lists two fees a merchant meets on an ordinary dispute:

• Dispute received fee: "$15.00 for each dispute you receive."
• Dispute countered fee: $15.00 for each dispute you respond to. "You get this fee back for won disputes. You don't get this fee back for lost disputes."

On the first of those, Stripe's documentation says: "Unless otherwise stated in your Stripe contract, we never return the dispute received fee." Fees differ by country, so check the page for yours.

What does a $200 chargeback cost on Stripe?

This is a hypothetical example. A US merchant on Stripe's standard pricing sells a $200 order. The customer disputes it. Here are the four ways it can end, using the fees above:

Those sums leave out what the order cost you. If the goods cost you $80 and shipping $12, a lost dispute is $92 worse than the table shows, because the customer has the goods and the money.

They also leave out the fee Stripe took on the original sale. Stripe states that on a refund "processing fees from the original transaction aren't returned". We could not find a Stripe page that says the same of a lost dispute, so the table does not assume it.

What about the costs that are not on a statement?

• The goods or the work. Already delivered, and not coming back.
• Your time. Finding the records and writing the response.
• Your dispute rate. Card networks run monitoring programmes for merchants whose disputes are high relative to their sales. Stripe notes that the industry "recognizes dispute activity above 0.75% as excessive".

We are not putting a number on these. Figures that claim to give the "true cost" of a chargeback as a multiple of the sale are estimates, and yours depends on your margins.

Is it different on Shopify?

The shape is the same and the fee rule is kinder. With Shopify Payments in the United States, Shopify's fee table lists $15 USD, and "if you win the chargeback, then the fee is returned to you." If you accept the chargeback, you are not refunded the fee.

On the same $200 order: accepted or lost, $215; won, nothing in dispute fees. Our guide to the Shopify chargeback deadline shows where the date is.

What does it cost with ChargePilot?

ChargePilot's fee for dispute response is 15% of what we recover, and only when we win. There is no monthly fee to fight disputes. Your processor's own dispute fees still apply, as in the table above.

On the same hypothetical $200 dispute:

No one can promise a win. The card issuer decides.

What does preventing it cost?

Prevention is a different trade. The customer is refunded before a chargeback is filed, so you lose the $200 sale either way. What you avoid is the dispute: on Stripe, resolved disputes "don't count towards your overall dispute rates", and "you don't pay a separate dispute received fee on these resolved disputes."

ChargePilot charges $19 per Visa RDR alert resolved and $29 per Ethoca alert resolved. You pay only when a chargeback is actually prevented, never for merely receiving an alert. Whether prevention is worth it depends on whether you would have won the dispute; we go through that in RDR or Ethoca.

So, should I fight?

Compare what winning returns with what fighting risks. On the $200 example, fighting risks one more $15 fee to recover $200. On a $20 dispute the same $15 is most of the sale. And if the customer is right, accept it: no response changes that.

Every ChargePilot price is on one page, and the product page shows what happens to a dispute once you connect.

Questions and answers