A chargeback costs you more than just the sale.

The fee you pay regardless of outcome

A chargeback happens when a cardholder disputes a transaction directly with their bank rather than with you, and the bank reverses the charge pending investigation. Your processor charges a chargeback fee — commonly in the $15–$25 range, though it varies by processor — simply for processing the dispute, and that fee typically applies whether you ultimately win or lose the dispute.

This means a chargeback is a two-part cost: the disputed sale amount itself (which you may or may not recover) plus a flat fee that you generally don't get back either way. For a business with a high chargeback rate, those flat fees alone can add up to a meaningful monthly cost independent of the disputed revenue.

Why chargeback rate matters beyond the fees

Card networks track your chargeback rate (chargebacks as a percentage of total transactions), and exceeding certain thresholds can trigger monitoring programs, additional fees, or in serious cases put your merchant account at risk — this is a separate and more serious consequence than the per-incident fee itself.

Reducing chargebacks in practice usually comes down to a few concrete habits: clear billing descriptors customers recognize on their statement, prompt responses to customer service issues before they escalate to a dispute, and solid documentation (signatures, delivery confirmation, clear return policies) for representment if a dispute does happen.

Common questions