“How much?” is perhaps the most-asked question of all time. Unfortunately, in the payments industry at least, it’s also the most difficult to answer. That’s especially true when it comes to how much do chargebacks cost for merchants. So many variables come into play, including the type of business it is, which banks and card schemes are involved, and the number of chargebacks the merchant processes; and then there’s the ancillary costs of time and effort spent dealing with chargebacks. Perhaps the most accurate answer possible to “how much are chargebacks” is “they’re expensive.”

Costs per chargeback vary a great deal. They depend on what the card associations allow their issuers to charge your acquiring bank, and what your acquirer turns around and charges you as a result. This typically ranges from $20/chargeback for lower-risk merchants to upwards of $50+ for high-risk. And that cost is by no means set in stone.

Invariably, the cost is heavily impacted by your chargeback-to-sales ratio. Both VISA and MasterCard use this ratio to assess their fees.


VISA has an elaborate fee structure to charge merchants with chargeback problems big and small. Fees start in that $20-$50+ range per chargeback. Then, let’s say your ratio hits .75%, and you were paying $35 per chargeback. Your business goes into the Visa Chargeback Monitoring Program (VCMP). Right away, this costs you time and effort because you are then required to present a plan of action to VISA on how to remediate it.

If your ratio does not decrease as planned, your non-compliance assessment goes from $35 per chargeback to $50. After three months of that and no improvement, non-compliance goes up to $100/chargeback and you get hit with a $25k review fee on top. Continued non-compliance puts you in serious danger of losing your VISA processing, which will more than likely cost you everything.


MasterCard’s fee structure is similar to VISA’s, but more mathy. MasterCard authorizes its issuers to charge $25 USD per chargeback, under its Progressive Handling Fees. They also have a chargeback monitoring program for “frequent flyers”; their threshold to enable the program is 1% chargebacks-to-sales. Once in monitored, merchants are also charged a violation assessment on top of the chargeback fees.

So let’s say a merchant has 50 chargebacks and their ratio is 1.5%. The merchant owes the issuer $1250 (50 chargebacks at $25 each). The issuer reimbursement is multiplied by the chargeback ratio ($1250 x 1.5) which puts the violation assessment at $1875.


If you’re asking yourself “How much do chargebacks cost my business,” you’re on the right track. However, as the saying goes, if you’re asking how much, you can’t afford it. Asking that question to ChargebackHelp, on the other hand, is more than affordable, it’s free. ChargebackHelp provides a free chargeback assessment, specific to your business. Our assessment includes a clear and concise action plan on how to mitigate the cost of chargebacks. Again, it’s free with no strings attached. You can request an assessment here.

The last thing you want to do is figure out your chargeback costs by tallying the fees and penalties from line items on your bank statements. A better plan is to assess your chargeback risk proactively, with ChargebackHelp.