23+ Chargeback Statistics Every Merchant Should Know for 2025

As an e-commerce store owner, I’m always curious about how chargebacks change every year.

In this piece, I’ll share key statistics to help you manage your chargeback issues.

Let’s start with some general stats. Stay tuned.

Key Takeaways

• Online fraud grew by 15% in 2024, reaching about $48 billion in losses.
• The average chargeback amount climbed from $165 (2023) to $169.13 (2024).
• 84% of customers feel like chargebacks are more convenient.
• 72% of shoppers don’t know the difference between chargebacks and refunds.
• There were more than 238 million chargebacks in 2023.
• 52% of customers skip contacting merchants about issues and file chargebacks
• Fraud costs merchants $3.35 for every $1 lost.
• Friendly fraud accounts for over 70% of chargebacks.
• Social media exposes 27% of consumers to chargeback fraud promotion.
• Buyer’s remorse drives 65.3% of friendly fraud cases.
• 42% of Gen Z shoppers admitted committing first-party fraud.
• Merchants win, on average, 45% of chargebacks.

Chargebacks drain billions from businesses and frustrate folks who struggle with prevention. Chargeback alerts help tackle this issue.

These alerts notify merchants when customers plan disputes. Refunds can prevent disputes and save money.

Learn how they work.

1. Chargeback Data (In General)

These sections cover stats that don’t fit into other categories.

Do you want statistics from specific payment processors?

Read these pieces:

• Stripe
• Shopify
• PayPal

Let’s start with the most surprising insight.

1.1 Cardholders Still Prefer the Dispute Route Over Refunds

84% of customers say filing chargebacks feels easier than requesting refunds [1]. 72% of them see no real difference between the two. And 52% skip contacting the seller altogether before filing chargebacks.

These numbers show that many shoppers now view chargebacks as their default solution.

What even is the difference between a chargeback and a refund?

Chargebacks let customers dispute transactions through their bank or payment processor. Often for fraud or unauthorized charges. For sellers, disputes come with fees and added complications.

Refunds require customers to work with merchants. They take a lot less time than chargebacks.

Want more details? Check out our post comparing chargebacks and refunds.

So why are chargebacks so popular?

Convenience.

Recent trends that might contribute to their rise include:

• Mobile apps: Filing chargebacks now takes a few taps.
• Confusing return policies: Complicated refund processes push customers to banks.
• Lack of awareness: Many folks don’t realize chargebacks hurt businesses.

These trends highlight the need for clearer refund processes.

Summary: Consumers increasingly favor chargebacks over refunds for convenience.

1.2 Chargeback Volume in 2024: Has It Improved?

While numbers for total chargebacks in 2024 remain unavailable, trends point to an increase. Ethoca predicts annual chargebacks could reach 337 million in 2026. Up from 238 million in 2023.

Factors support this spike include [2]:

• Digital fraud rose 15% in 2024, hitting nearly $48 billion.
• Average chargeback amounts climbed from $165 in 2023 to $169.13 in 2024.
• Dispute rates increased 78% YoY in Q3 2024, according to the Sift Global Network.

The data from Sift also shows an 8% rise in chargeback rates during the first 3 quarters of 2024. Following a 14% drop in 2023. This trend reflects evolving fraud tactics. Such tactics encourage more folks to dispute valid charges.

Glossary:

• YoY (year-over-year): Comparison of metrics from the same period last year.

Summary: Chargebacks rose in 2024, driven by fraud growth.

1.3 Chargeback Risk Factors

Chargebacks911 surveyed merchants to identify the main risk factors driving chargebacks.

Here’s what they found:

• High-risk industries (30%): Gambling and financial services face frequent disputes.
• Subscription billing (27.1%): Many consumers forget recurring charges tied to subscriptions.
• Future services (16.4%): Issues like delays (e.g., travel) lead to disputes.
• Affiliate marketing (14.5%): Misleading or fraudulent affiliate practices cause many chargebacks.
• Luxury goods (12.6%): Fraudsters often target expensive items to resell.
• Free trial offers (9.7%): Unclear terms to free trials frustrate customers and lead to disputes.
• Buy online, pay in-store (8.2%): Inventory mismatches or payment confusion create risks.
• Outbound phone sales (6.3%): Often face disputes due to unclear communication.

33% of merchants said none of these risk factors explained their chargebacks. This suggests other issues. These could include operational mistakes, changing fraud tactics, or shifting customer habits.

What qualifies as a “high-risk business”?

Check out our detailed article to find out. See if your industry’s there.

Summary: High-risk industries have the highest chargeback risk.

1.4 Monetization Models & Their Chargeback Risk

Subscription billing models present the highest risk factor regarding chargebacks. 36.6% of chargebacks that occurred (according to the study) stemmed from products billed through subscriptions.

Here are the other risk factors that could increase chargeback rates:

• Subscription billing: 36.6%
• High-value items (e.g., luxury purses): 34.9%
• Free trial offers: 20%
• Affiliate marketing: 16.6%
• Other: 38.3%

Subscription billing has a high chargeback risk due to its recurring nature. Customers may forget them and dispute charges they don't recognize. Meanwhile, most businesses make cancellations complex. Increasing the chance of disputed charges.

High-value items attract more fraud attempts since they offer the highest return if a fraudster resells them. High prices can also increase buyer's remorse. Buyers might regret the purchase and try to recoup their money.

Free trial offers can attract fraudulent sign-ups designed to exploit a free period. Customers might also forget to cancel before the paid period begins, leading to disputes.

Affiliates promote products but don't handle payments directly, which protects them from customer payment disputes and makes them low-risk.

Summary: Subscriptions invite chargebacks due to possible customer oversight, while high-value items attract fraud and remorse.

1.5 Most Chargebacks Aren’t for High-Ticket Items

Most chargeback disputes regarded items between the $25 and $75 range. However. I couldn’t find quantitative information on the specific percentages.

I imagine that since a bulk of chargebacks stem from subscriptions, $25 – $75 seems like a range that most subscription models would price their products.

2. Cost Statistics

These segments will cover the impact disputes have on businesses.

Here’s the most surprising part.

2.1 The True Cost of Chargebacks

Chargeback fees range from $10 to $50 per dispute, depending on the payment processor. These fees apply no matter how small the transaction is. For example, disputing a $2 item on Stripe still results in a $15 fee — a 650% cost increase.

Worse, most gateways don’t refund these fees, even if you win.

On top of fees, administrative costs pile up. Fighting chargebacks requires staffing and time. Pulling resources away from business growth. Studies show that for every $1 lost to fraud, merchants lose $3.35 when adding such costs.

Chargebacks cost businesses over $25 billion each year. Cutting 0.47% to 1% of profits for many merchants.

These numbers don’t even account for hidden impacts. We’ll cover these in a second.

Even a small number of chargebacks can cause big losses. A business with a $19 average transaction value and 12 chargebacks a month could lose over $7,270 annually.

That's just from fees and administrative expenses.

Summary: Sellers could lose up to $50 per dispute just from chargeback fees.

2.2 Hidden Costs of Chargebacks

Exceeding a 0.90% chargeback rate can place businesses in payment processor monitoring programs. Each comes with huge fines and fees.

Visa charges $50 per dispute after a four-month grace period. Fines can rise to $25,000 per month for businesses that fail to reduce their chargeback rate. Mastercard starts fines at $1,000 per month after a month in their program. Adding extra fees for accounts with over 300 chargebacks.

On top of these fines, sellers deal with more operational costs for every transaction:

• Customer service costs: Disputes ramp up call volumes; each interaction costs about $10.
• Acquisition costs: Businesses spend 7 – 10% of revenue to attract new customers.
• Fraud management expenses: First-party fraud alone costs $35 for every $100 in disputes.
• Processing fees: Card processing takes 1.5 – 4% of the sale, even for disputed transactions.

The impact doesn’t end there.

Over 32% of merchants report raising prices to offset chargeback-related costs. Such risks push customers to competitors. Because why would a shopper want to do business with someone who keeps raising their prices?

Summary: Marketing, fraud management, processing fees, and customer service lead to more losses for sellers.

2.3 How Much Chargebacks Cost Merchants

A 2018 study suggests that sellers lose 1.8% of their total revenue from fraud. And Shopify suggests that chargebacks cost merchants 0.47% of their total revenue annually.

American businesses lost an estimated $10.44 billion dollars alone in 2024. This number is estimated to soar to $12.87 billion by 2026.

2.4 Sometimes Prevention Costs More Than Chargebacks

Transactions with false declines typically cost merchants almost $442 billion annually. That’s much higher than the $25 billion in losses (from friendly fraud chargebacks) we mentioned.

A false decline happens when a payment system wrongly rejects a legitimate purchase. This automated denial might happen due to overly cautious fraud detection measures.

Because of this rejection, customers get frustrated when their payment is refused without a clear reason. And this frustration will result in lost revenue because of the following reasons:

• Can damage customer relationships, leading to lost loyalty. 
• Disappointed customers might leave bad reviews.
• Over time, false declines can lead to much greater lost revenue than the chargebacks they are designed to prevent.
• Customers might shop elsewhere.

Summary: False declines block legitimate customers, instantly losing revenue and causing long-term harm, exceeding the cost of individual chargebacks.

3. Chargeback Win Rate Statistics

These sections will cover various win rates for chargebacks. Since it’s a nuanced subject.

Let’s dive in.

3.1 Industry Standard Chargeback Win Rate

Businesses that fight chargebacks report an average win rate of 45%.

This win rate changes depending on the industry, which we’ll cover later. For details on calculating your win rate, check out this guide.

Even with successful disputes, about 9% of cases move to pre-arbitration.

This happens when the cardholder’s bank reopens the dispute for further review. Pre-arbitration often costs businesses more time and money. More on it in this piece.

Large businesses face a higher pre-arbitration rate of 11%.

Small and medium businesses deal with an 8% rate.

I couldn’t find updated data on win rates for different product types (like digital vs. physical goods).

Summary: Merchants win, on average, 45% of disputes.

3.2 Chargeback Win Rates for Different Transaction Values

Transactions under $29.99 have a much higher chargeback win rate (46.85%) than higher-ticket transactions. For instance, transactions costing more than $300 have a win rate of only 27.64%.

What about the values in between? Here they are:

Here’s why lower transaction values COULD result in higher win rates:

• Might attract less scrutiny from fraudsters.
• Less likely to trigger fraud detection systems used by banks.
• Customers are less likely to dispute a low-value charge.
• The effort of filing a chargeback might outweigh the cost for small transactions.

Fraudsters might focus on high-dollar scams for a bigger payout. Large purchases call for more investigation from banks and credit card companies. This can lead to higher detection rates for fraudulent transactions.

Summary:  Lower-priced transactions often have higher chargeback win rates because they attract less fraudsters.

3.3 Chargeback Win Rates for Different Categories

The apparel industry has a chargeback win rate of 35.81% on average for merchants. Consumer electronics has the lowest win rate (16.59%).

The win rates drop when you switch industries:

• Apparel: 35.81%
• Travel & hospitality: 30.47%
• Health: 29.17%
• Consumer electronics: 16.59%

That was one study. One done by Midigator suggests different numbers:

When I refer to the primary chargeback causes, I’m talking about the reason codes that card networks (e.g., Visa) assign to a chargeback.

These numbers are more thorough than the former study. However, it’s nice to have both sets of statistics to help set realistic expectations when dealing with chargebacks.

People search services often have high chargeback win rates because their transactions leave strong digital records. These services might retain search details and customer confirmation. This evidence helps the business prove the customer authorized the service.

Furniture has a low win rate due to the nature of the product. Deliveries come with the potential for damage or dissatisfaction. Customers might dispute charges that the item was not as described. This type of dispute makes it harder for merchants to win.

Summary: People search industries leave strong digital footprints, helping in chargebacks, while furniture risks product disputes, which are harder to win.

3.4 Type of Goods & Their Chargeback Win Rate Percentage

Businesses selling digital goods have, on average, a 72.56% chargeback win rate. The percentage drops to 53.42% regarding physical goods. And it sinks to 46.78% when we get to services.

According to Midigator, most chargeback reason codes for these product types stem from other fraud and card-absent transactions.

Explain why chargeback win rates could be higher or lower.

Products have different types of monetization schemes, though. These rates also differ:

• Subscription: 49.1% average win rate
• Subscriptions with free trials: 52.1% average win rate
• Single purchases with a subscription: 72.2% average win rate
• Single purchases: 54.5% average win rate

Merchants might sometimes win more single purchase chargebacks within subscription industries. This can happen if customers forget they initiated the purchase. Clear proof of authorization strengthens the merchant's case.

With pure subscription models, customers might not recognize recurring charges or forget to cancel subscriptions. Disputes based on customer forgetfulness are harder for merchants to win.

Summary: Single subscription-related purchases can be easier to win as customers might not recall them while recurring subscription charges are harder to defend due to possible customer oversight.

4. Statistics on Chargeback Sources

A survey by Chargebacks911 revealed the categories where customers file chargebacks most often:

• Physical goods and retail: ~55%
• Digital goods (e.g., music files): ~32%
• Services: ~25%
• Travel and entertainment: ~22%
• Software: ~15%
• Ticketing and events: ~10%

These figures highlight the prevalence of chargebacks across various reason codes. Understanding these trends can help you take steps to prevent disputes.

Do these fall under certain categories? Yep. We have a guide that breaks down what each chargeback type is.

The following sections will dive deeper into where chargebacks come from.

You’d also should know what chargeback reason codes you might encounter. As these are what issuers will use during the chargeback process.

Let’s see the most common chargeback type.

4.1 Friendly & Chargeback Fraud

Friendly fraud, also known as first-party fraud, accounts for 70 – 79% of all chargebacks. Businesses estimate that 75% of their fraud losses stem from this issue.

Friendly fraud happens when customers dispute valid transactions. Often claiming they didn’t authorize a charge despite receiving the product.

For example, a user might forget about a subscription renewal and dispute the charge.

Here are common behaviors linked to friendly fraud [3]:

• Buyer’s remorse: 65.3% of chargebacks come from customers changing their minds.
• Chargeback fraud: 60.9% of cases involve shoppers abusing the system to get goods for free.
• Double-dipping: Folks file 41.6% of disputes while waiting for refunds to process.
• Misunderstandings: 38.6% of disputes happen because buyers don’t know how disputes work.
• Mistakes: In 34.7% of cases, cardholders assume someone stole their card but later realize the charge was legit.

Online content promoting fraud has contributed to the rise in chargebacks.

Around 27% of consumers report seeing posts encouraging chargeback fraud. Creators often frame them as “hacks” to get “free money.” Gen Z makes up 47% of those exposed to this content. Meanwhile, millennials account for 35%.

It’s no surprise that 42% of Gen Z shoppers admit to committing first-party fraud, likely influenced by such trends.

Wait. How are friendly- and chargeback fraud different?

Friendly fraud often results from misunderstandings. Chargeback fraud involves intent to exploit the system. Both create similar challenges for merchants.

Find more of the differences in this guide.

I digress:

Between 2020 and 2023, merchants reported an average 18% yearly increase in friendly fraud cases. This rise reflects a growing consumer reliance on chargebacks, sometimes at merchants' expense.

Summary: Friendly fraud is on the rise. Possibly partially due to social media.

4.2 True Fraud

Third-party fraud happens when someone uses another person’s payment information without permission. Almost all true fraud takes place online, with less than 10% of US cases involving lost or stolen physical cards.

A few common forms of payment fraud include:

• Card cracking: Criminals steal credit card data, often through hacks or breaches. Hackers have compromised an estimated 80% of active credit card accounts.
• Check fraud: Cases rose 28%, driven by phishing and deepfake scams.
• Synthetic identity fraud: Fraudsters now use AI to create fake identities. This method surged 31% recently, making it one of the fastest-growing threats in digital payments. 

Digital fraud as a whole, including these methods, grew 15% in 2024, costing nearly $48 billion in losses.

The impact of true fraud extends beyond financial losses and include:

• 28% of consumers who filed fraud disputes became victims of more online fraud:
  
  • 61% experienced more payment fraud.
  • 44% received more spam or scam messages.
  • 30% suffered account takeovers.
• 43% of customers said they’d hesitate to shop with a brand again after experiencing fraud.
  
  • 28% vowed to stop shopping with the brand altogether.

True fraud creates a ripple effect. Customers who file fraud disputes often face further attacks. Many don’t receive timely alerts about suspicious activity. Leaving them unable to cancel cards or update account details in time.

For more on true fraud, check out our in-depth guide.

Summary: Fraud was on the rise in 2024.

4.3 Merchant Error

Merchant errors play a major role in payment disputes, causing 20 – 40% of chargebacks.

Here are the most common merchant-related issues that lead to chargebacks:

• Overcharged or double charged (23%): Incorrect billing amounts.
• Missed delivery deadlines (18%): Late delivery of products or services.
• Complicated return processes (16%): Confusing or unclear return policies.
• Item didn’t match description (15%): Products don’t meet expectations.
• Defective items (11%): Faulty or damaged goods.
• Subscription cancellations (10%): Canceling recurring services becomes too difficult.
• Delayed orders (9%): Late-arriving orders.
• Unauthorized household purchases (7%): Family members make purchases without the cardholder’s knowledge.
• Changed mind after delivery (6%): Customers reconsider their purchase after receiving the order.

Merchant-related chargebacks often stem from operational issues. Addressing these errors can reduce disputes and improve customer satisfaction.

Summary: Many chargebacks come from sellers charging incorrect amounts.

5. Chargeback Rate Statistics

Friendly fraud and shifting consumer habits have caused chargeback rates to skyrocket.

How do you know what your chargeback rate is? We explain how to calculate this, here.

The next sections will break down why this is happening.

5.1 Average Chargeback Percentage

The average chargeback ratio across industries is 0.60%, though some studies suggest it’s closer to 0.56%.

Historically, chargeback rates hover around 1% for all transactions.

International merchants face rates as high as 2%.

Payment processors like Visa watch chargeback activity and enforce strict thresholds. For instance, Visa categorizes businesses as high-risk if their chargeback rate exceeds 0.9%. This often leads to higher fees.

However...

Changes are coming. Starting April 1, 2025. Visa will retire its current monitoring programs. It'll replace them with the Visa Acquirer Monitoring Program (VAMP). Keep an eye on these updates to understand how they may impact your business.

Summary: The average rate is between 0.56% and 1%.

5.2 Chargeback Rates by Industry: Who’s at the Most Risk?

Chargeback rates differ widely by industry.

Here are the latest 2024 statistics:

Source: SwipeSum

These factors likely contribute to high chargeback rates across industries:

• Education: Bad course content or intangible services.
• Travel: Cancellations, overbookings, or fraud.
• Health and wellness:  Complaints about product quality or unmet expectations.
• Gaming: Unauthorized microtransactions.
• Software and SaaS: Issues with billing or canceling subscriptions.
• Entertainment: Subscription problems or unauthorized content access.
• Financial services: Fraud and billing mistakes.
• Retail: Delivery issues or friendly fraud

Each industry faces unique challenges, which drive chargeback risks. Identifying these issues helps businesses take targeted preventive measures.

Summary: The education industry has the highest average chargeback rate.

5.3 Huge Chargeback Rate Increase in Some Areas

The online travel and lodging sector saw an 816% increase in chargebacks compared to Q1 2023.

The following likely fueled this spike:

• Post-pandemic travel boom
• Cancellations
• Disputes over service quality.

E-commerce experienced a 222% jump in chargebacks. Driven by higher online shopping volumes, delivery delays, and more cases of friendly fraud.

Digital goods and services reported a 59% rise. Mostly due to unauthorized purchases and challenges with disputes over intangible products.

Online sales saw increases linked to post-holiday returns and fraud. Holiday purchases have a 17.6% return rate, and 16.5% of those returns involve fraud.

Sift reports that these chargeback increases in Q1 2024 exceed those seen in Q1 2023 across all categories.

Summary: E-commerce, digital goods, and travel had more chargebacks.

5.4 Chargeback Rates by Country

Brazil has a chargeback rate of 3.48%, followed by Mexico, which has a chargeback rate of 2.81%. Every other country has lower than 1% chargeback rates. The United States’ chargeback isn’t that high, though (0.47%). Meanwhile, Japan and China have the lowest chargeback rate at 0.18%.

Here they are:

Despite the low percentage of chargeback rates in the United States, this contradicts an earlier chargeback statistic I found. The former suggests that the US makes up for a majority of global chargebacks (105 million out of 238 million chargebacks).

The first source comes from Mastercard’s Ethoca, which I’d trust more since it’s from a card network.

6. Statistics on Ways to Prevent Chargebacks

Here are some general success statistics for chargeback prevention methods:

• Clear refund policies: Reduce chargeback rates by 20 – 30%.
• Streamlined checkout process: Simplifying to a single page lowers chargeback rates by 15%.
• Optimized mobile checkouts: Responsive designs reduce mobile disputes by 30%.
• Apple Pay adoption: Merchants see 25% fewer chargebacks compared to traditional card payments.
• EMV compliance: Cuts counterfeit fraud by 87% for some businesses.
• In-house chargeback teams: 76% of businesses have in-house teams; 9% use specialized software.
• No prevention solutions: 27.7% of businesses don’t use any chargeback reduction tools.

Streamlining the checkout process includes features like real-time validation and progress indicators. Reducing friction can also boost conversion rates by 35%.

The next sections will focus on specific chargeback prevention tools. While results vary by industry, these insights can help you determine what works best.

Now, here’s a prevention method we specialize in.

6.1 Chargeback Alerts

Here’s how chargeback alerts can help:

• CDRN: Prevents up to 41% of chargebacks in some industries.
• Ethoca Alerts: Prevent up to 57% of disputes.
• RDR: Stops 50 – 70% of Visa chargebacks.

The main difference between these tools is the card networks they work with. For more details, check out our separate piece comparing them.

Adoption rates for these tools remain low. Only 26.3% of businesses use alerts like Ethoca or CDRN. Just 17.8% of businesses use RDR.

Did I get your attention?

You probably want to know what these are.

Chargeback alerts notify merchants when customers file disputes. This gives sellers the chance to issue refunds or resolve issues before disputes turn into formal chargebacks. Each system works with specific card networks, which determines how they operate.

Glossary:

• CDRN (Chargeback Dispute Resolution Network): A tool to resolve disputes before chargebacks occur.
• RDR (Rapid Dispute Resolution): A Visa system to prevent chargebacks through automatic refunds.

‍Summary: Alerts can prevent more than 70% of disputes in some cases.

6.2 3D Secure

3D Secure (3DS) can reduce chargebacks by up to 70%. Yet adoption in North America remains low. Only 2.7% of card-not-present (CNP) transactions use 3DS. Only 32.4% of businesses have implemented it.

Merchants hesitate to adopt 3DS because it adds friction to the checkout process. On average, 3DS adds 37 seconds to the purchase journey. Leading customers to abandon 22% of payments.

This trade-off between better security and potential sales loss often deters businesses.

However:

In regions where 3DS isn’t mandatory, it’s still a valuable tool for reducing fraud and chargebacks. It’s helpful for industries with high-risk transactions or frequent disputes.

Want to know if 3DS suits your business?

Check out our guide on implementing 3D Secure.

Summary: 3DS prevents a lot of fraud, but adds friction to purchases.

6.3 Consumer Clarity & Order Insight

About 27% of merchant error chargebacks result from unrecognized purchases. The tools mentioned in this section aim to help shoppers recognize their purchases. It does so by providing more detailed receipts.

Tools like Visa Order Insight and Consumer Clarity reduce disputes before they escalate:

• Visa Order Insight: Prevents 64 – 70% of disputes from becoming chargebacks.
• Consumer Clarity : In North America, issuers saw a 23% chargeback reduction over 2 years.
  
  • European issuers saw an 11% reduction within 4 months of implementation.

Follow the links attached to each tool to learn more about how they work and implementation.

Summary: Order Insight and Consumer Clarity can prevent chargebacks stemming from unrecognized purchases.

Wrapping Up

Friendly fraud and true fraud chargebacks rose in 2024 and could climb higher in 2025. Many merchants have tools to fight back but fail to use them. Don’t make the same mistake.

Struggling with high chargeback rates? Chargeback alerts can help. These alerts notify you before disputes occur, allowing you to take action.

As a certified reseller, we’ve helped some clients cut chargeback rates by as much as 91%.

Take the first step — schedule a demo today.

Sources

• [1] Chargeback Outlook. Ethoca. 2024. PDF.
• [2] Chargebacks 2025. Chargeback Help. 2025.
• [3] First-party Fraud. Ethoca. 2024. PDF.
• [4] Holiday Return Statistics. Fit Small Business. 3/12/2024.
• Q4 Digital Trust Index, Dispute Trends. Sift. Q4 2024. Gated Content.
• Chargeback Field Report. Chargebacks911. 2024. Gated Content.