21+ Chargeback Statistics You Need To Know in 2024

As an e-commerce storefront owner, I’ve dealt with my fair share of chargebacks and have been curious about how often they happen. That inspired me to research various statistics and share them with you.

I’ll first share general statistics, then numbers for success/win rates, friendly fraud, chargeback costs, and rates.

Let’s see how big of a dent in sales chargebacks can make.

Key Takeaways

• Over 70% of customers find chargebacks more convenient than seeking refunds.
• Global chargebacks exceeded 238 million in 2023, with the US accounting for 105 million.
• Subscription models have the highest chargeback risk, accounting for 36.6% of disputes.
• Merchants have a low overall success rate in winning chargebacks (around 30%).
• Friendly fraud (not actually fraud) makes up 75% of all chargeback cases.
• Every $1 in fraud costs merchants $3.13 per chargeback (in 2023)
• Fraudulent purchases are the most common reason behind chargebacks (34%).
• Sellers pay $191 for each chargeback based on transactions worth $90.
• Most chargebacks occur on transactions between $25 and $75.
• Fraudulent transactions make up 34% of all chargebacks.

1. Chargeback Statistics (General)

The following sections will cover general chargeback statistics, nothing special.

Let’s dive in.

1. Chargebacks Are More Convenient Than Refunds (To Cardholders)

More than 81% of customers find filing chargebacks more convenient than initiating a refund with the merchant. 72% of those customers don’t even see a difference between the 2.

A chargeback shifts the burden from the customer to the financial institution, forcing an investigation. Chargebacks also offer protection for more extended periods than most merchant refund policies. And the customer can start this process without needing merchant cooperation.

Aren’t refunds and chargebacks the same?

No.

Merchants initiate refunds. Typically, resulting in a faster return of funds for the customer. The cardholder's bank (issuing bank) initiates chargebacks upon the merchant and involves a lengthy investigation process—a few weeks or longer—often with fees for the business.

If you’re a merchant reading this, you should make refunds more appealing to avoid chargebacks. Here’s what you can try:

• Maintain a clear, easy-to-find refund policy.
• Offer hassle-free return procedures.
• Process refund requests quickly and efficiently.
• Communicate with customers throughout the refund process.

Summary: Customers sometimes prefer chargebacks due to their convenience and extended protection.

2. Number of Chargebacks in 2023

According to Ethoca, more than 238 million chargebacks happened in 2023 [1]. 105 million of those chargebacks occurred in the United States. The same source predicts we’ll see 337 million global chargebacks annually by 2026.

With more transactions happening online, the potential for fraud and transaction errors increases. "Card-not-present" purchases lack in-person verification. Increasing the risk of disputes.

Shopping online also makes it easier for customers to make impulse purchases. And they'll likely regret the said purchase later. This can lead to disputes, even when transactions are legitimate (friendly fraud).

The United States may see more chargebacks than other countries because their consumer protection laws offer strong chargeback rights. The Fair Credit Billing Act (FCBA) is a great example. It limits customer liability for fraud. The large size of the US market MAY also lead to a higher volume of disputes overall.

Summary: The boom in online shopping has contributed to rising chargeback rates. Consumer protection laws and market size play a role in the higher volume of chargebacks within the United States.

3. 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.

2. Chargeback Success Rate Statistics

The following sections will cover various statistics regarding win rates in chargebacks.

Many folks will use chargeback success rates and win rates interchangeably, which is what we’re doing in this article. However, some businesses might use “success rates” in different key performance indicators (KPI), such as net recovery rates.

You might have searched for chargeback success rates by country, but I couldn’t find any publicly available information stating such statistics. Sorry.

Keep reading to learn more.

1. Merchant Win Rate Percentage

Midigator suggests that 77% of merchants win, on average, 30% of chargebacks across all industries [2]. This rate boosts to 43.82% when it comes to friendly fraud chargebacks. But sinks to 9.27% regarding true fraud chargebacks.

Chargeback win rates depend on a few factors:

• Evidence quality is essential.
• Merchants with clear transaction records and proof of delivery have stronger cases. 
• Clear company policies and communication with customers

The chargeback reason also plays a role.

Friendly fraud often involves customer confusion or legitimate errors. Merchants can win these cases with evidence that shows the transaction was authorized. They might provide purchase details or customer communication.

True fraud involves stolen cards and unauthorized purchases. These cases are harder for merchants to win. As fraudsters may have elaborate schemes to conceal their identity and actions.

Let’s use account takeover as an example.

It involves gaining access to a legitimate customer's account on a merchant's website. This takeover usually happens through phishing emails, password cracking, or data breaches.

The fraudster, now in control of the customer's account, can update the shipping address and make seemingly authorized purchases. Their actions also mimic typical customer behavior. Making it more difficult for the merchant to detect the fraud and win the subsequent chargeback dispute.

When the actual account holder notices the fraudulent charge, they file a chargeback. However, the merchant faces a difficult situation. The purchase originated from a legitimate account with an established order history and a familiar purchase pattern.

This makes it difficult to prove that the transaction was fraudulent definitively.

Summary: Chargeback success depends on evidence, communication, and the nature of the dispute, with friendly fraud generally being easier for merchants to win than true fraud.

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 fraudster attention and are less likely to be challenged by customers.

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 [3]:

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.

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.

5. Most Cardholders Ignore the Chargeback Rules

More than 52% of cardholders admit that they file chargebacks without attempting to contact the merchant.

This isn’t a “success rate” statistic, but it will improve your odds of winning a chargeback—if you’re a business. If a customer doesn’t follow the rules and unknowingly admits it to the issuing bank, the financial institution will more likely favor the business.

Because if the customer can’t follow the rules regarding chargebacks and wastes the bank employees’ time, why would the bank trust the customer?

However, as a business, you want to prevent chargebacks. Thus, you need to ask yourself “why” customers aren’t attempting to contact merchants. If it’s a nightmare for the customer to reach support staff or chatbots automate all inquiries, this will discourage customers from reaching out.

They’ll likely assume it’s easier to contact their bank.

Also, not having a smooth refund process will discourage customers from reaching out to merchants.

3. Friendly Fraud Chargeback Statistics

Friendly fraud happens when a customer lies about a legitimate purchase, claiming it's unauthorized. This results in a chargeback and financial loss for the merchant, though the customer received the product or service.

It weakens trust in the online payment system and can increase business costs, potentially leading to higher prices for everyone.

Let’s look closer at how much chaos friendly fraud can cause.

1. Percentage of Chargebacks From Friendly Fraud

Friendly fraud chargebacks make up for 75% of all chargebacks issued (that’s what Visa says) [4]. They also cost businesses $25 billion in losses a year.

Yes, friendly fraud is a type of fraudulent chargeback. You’ll learn why I specified this in a couple of sections.

2. Fraudsters Who Win Friendly Fraud Chargebacks Will Strike Again

90% of those who successfully disputed a transaction will likely dispute another. At least according to people who responded to the survey [5].

Another source suggests that 45% of consumers who win a chargeback will do it again within 90 days.

After winning a chargeback, fraudsters could perceive the process as easy and low-risk. They might feel emboldened to try it again, especially for impulsive purchases. This lack of consequences reinforces the behavior.

3. Most Common Reason for Chargebacks

Unknown transactions and fraudulent purchases make up 34% of all chargebacks. Products never arriving to the customer lead to 26%. Receiving the wrong product in general leads to 15%. Then there’s the item not meeting expectations (6%) or not fitting the description (5%).

Billing the customer twice makes up for 3% of all total chargebacks.

In fraudulent purchases, fraudsters use stolen credit card details for goods, not an authorized purchase. The genuine cardholder disputes the charge, resulting in a chargeback for the merchant. This process bypasses the need for a return or customer-initiated dispute.

Hence, it’s easier for the fraudster to commit online shoplifting.

Summary: Fraudsters deliberately target merchants, triggering chargebacks from the genuine cardholder and explaining the high numbers.

4. Statistics on Costs of Chargebacks for Merchants

The following sections will dive into the impacts of chargebacks on a merchant’s bottom line.

Here we go.

1. How Much Chargebacks Cost Merchants

Every $1 of fraud costs many US retailers $3.36 (since 2020). That means whenever fraud happens, merchants lose triple the amount. This number rose from the $3.13 it was per dollar of fraud in 2019.

A 2018 study also 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 [6].

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. 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. Most Effective Chargeback Prevention Services

Using chargeback prevention services like Verifi CDRN and Ethoca Alerts resulted in a 19% reduction in chargebacks for merchants. Using Consumer Clarity and Order insight Resulted in a 27% reduction.

40% of merchants chose these tools [7]. 63% of those sellers chose multiple services to increase their chances of preventing chargebacks. From there, 55.07% of those merchants chose Ethoca & Verify Alerts, while 2.36% of them only chose RDR+.

4. 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.

5. Chargebacks Cost More Than Double the Product’s Value

In 2023, merchants paid an average of $191 based on transactions worth $90.

On top of losing the money for the labor, advertising, processing, and marketing for the sold product, they also must pay chargeback fees. These fees range from $25 to $100. And if the merchant decides to arbitrate (challenge) a bank’s decision on a chargeback, that results in fees in the hundreds or thousands.

5. Chargeback Rate Statistics

We’ll check out the average chargeback rates across various countries and industries throughout the following sections.

A chargeback rate is the percentage of a merchant's transactions that cause a customer's bank to reverse the payment.

High chargeback rates signal to payment processors like Visa that a business might be fraudulent or have poor customer service. This can lead to expulsion because processors don't want to be associated with high-risk businesses.

Keep reading to learn more.

1. Average Chargeback Ratio

The average chargeback ratio across all industries is 0.60%. Another study suggests this number is 0.56%. However, one out of four businesses that responded to Chargeback 911’s survey reported exceeding a 1% chargeback rate.

They don’t specify the number of businesses they surveyed.

Many payment processors (e.g., Visa) will place businesses into monitoring programs that increase the price of chargebacks if they exceed their thresholds. For instance, with Visa, it’s 0.9% or 100 monthly chargebacks.

If businesses fail to improve their chargeback rate, these payment processors won’t allow the seller to use them.

2. 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.

3. Chargeback Rates by Industry

The education and training industry has the highest chargeback rate at 1.02%. Following it is travel and hospitality at 0.89%. Restaurants have the lowest percentage at 0.12%.

I wonder why.

Let’s see what percentages other industries have:

• Travel: 0.89%–1.10%
• Training and education: 0.30%–1.02%
• Health and wellness: 0.86%
• Gaming: 0.83%
• Telecommunications: 0.80%
• SaaS and software: 0.66%
• Entertainment and media: 0.56%
• Financial services: 0.55%
• Retail: 0.52%–0.90%
• Healthcare: 0.40%
• Utilities: 0.20%
• Restaurants: 0.12%

Disruptions like flight delays and hotel overbookings can lead to frustrated customers seeking refunds. This industry is attractive to fraudsters due to high-value transactions. Travel services are often intangible, making it harder to prove services were provided.

Conclusion

Chargebacks are a growing concern for businesses, fueled by online shopping trends. Merchants must focus on clear refund policies and excellent customer communication. Investing in fraud prevention is crucial to combat rising chargeback losses.

Check out our Stripe and Shopify statistics if you need information on specific payment processors. Otherwise, if you’re a business that wants to reduce your chargeback rate, see how our tool can help.