Chargeback True Cost Calculator

How to use it

Enter your transaction volume, average order value and margin, then what proportion of orders get disputed and how often you win. The calculator adds up every consequence of a dispute — not just the reversed sale — and reports what the problem actually costs each month.

Where the number comes from

• Chargebacks per month is your transaction count times the dispute rate.
• Disputes you lose are that figure times one minus your win rate.
• A lost dispute reverses the full order value and, for physical goods, loses the stock too — that second loss is the order value times one minus gross margin.
• The processor fee applies to every dispute regardless of outcome, which is why winning does not make a chargeback free.
• Staff time is charged on every dispute, since evidence has to be gathered before you know whether you will win.
• Cost per chargeback is the total divided by the number of disputes, then expressed as a multiple of your average order.

What goes wrong

The part most calculators leave out.

• This does not price the consequences that dwarf the direct cost. Crossing a card network monitoring threshold brings monthly fines, mandated remediation, and in bad cases the loss of your merchant account entirely.
• Digital goods have no stock to lose, so set gross margin to 100% and the goods line drops out. Leaving it at a physical-goods figure overstates the cost.
• Win rates are usually quoted optimistically. Many businesses count only the disputes they chose to fight, ignoring those written off without a response — which is a very different denominator.
• Staff cost per dispute is almost always understated. Gathering delivery evidence, card data and correspondence for one case is rarely fifteen minutes of work.
• Fraud losses and friendly fraud behave differently over time. A rising rate driven by genuine fraud needs different action from one driven by customers not recognising your billing descriptor.

Questions

What chargeback rate is too high?

Card network monitoring programmes generally begin around 0.9% of transactions, though the exact trigger and the counting method differ between schemes and change over time. Most processors will raise concerns well before that, and the practical ceiling is whatever your acquirer will tolerate.

Why does a dispute I win still cost money?

The processor fee is charged when the dispute is raised, not when it is resolved, so winning does not refund it. You also spend the staff time regardless. Winning saves the sale and the stock — it does not make the event free.

Should I fight every chargeback?

It depends on the cost of responding against the value at stake and your realistic win rate for that dispute reason. Some reason codes are close to unwinnable, and spending staff time on them is worse than writing them off. That triage is a business decision this calculator can inform but not make.

Does anything I type get sent anywhere?

No. The whole calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.