Chargeback Statistics

A 3d rendering that has a credit card and a chargeback icon

A 3d rendering that has a credit card and a chargeback icon

Credit: Adaptiv Payments

Headshot of Payments Writer Paul Smith
Paul SmithLinkedIn

Director of Sales at Adaptiv Payments | More

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Reviewed and fact-checked by Shelby Waters

Chargebacks happen when a customer's bank or card issuer reverses a transaction due to customer disputes. A chargeback can result in consequences for the merchant, even when the merchant wins the dispute.

Global chargeback volume is expected to rise by 24% from 2025 to 2028, making chargeback prevention solutions a key concern for any merchant.

What Is the Average Chargeback Rate?

The average chargeback rate is the percentage of transactions that result in a chargeback. In general, a rate above 1% may result in your merchant account being flagged, though many industries have much higher chargeback stats. The average chargeback rate across all industries is around 0.6%.

What Is the Average Chargeback Ratio?

The chargeback-to-transaction ratio is the number of transactions out of 1,000 that result in a chargeback. Across all industries, the rate is 6 chargebacks per 1,000 transactions.

  • Alcohol: 2 per 1,000
  • Sports Betting, Gambling, and Casinos: 35 per 1,000
  • Gaming: 20 per 1,000
  • Fantasy Football: 35 per 1,000
  • Training/Coaching and Consulting: 10 per 1,000
  • Automotive: 8 per 1,000
  • Online Dating: 20 per 1,000
  • Event Ticketing: 9 per 1,000
  • Digital Services (SaaS, Tech Service, SEO, SEM): 7 per 1,000
  • Fintech: 6 per 1,000
  • High-Volume and Wholesaling: 5 per 1,000
  • Ecommerce: 5 per 1,000
  • Credit Repair: 10 per 1,000
  • Debt Collection: 10 per 1,000
  • Medical Billing and Telehealth: 25 per 1,000
  • Timeshares: over 10 per 1,000
  • Subscriptions: 5 per 1,000
  • Firearms: over 10 per 1,000
  • Pawn Shops: over 6 per 1,000
  • Precious Metals: 15 per 1,000
  • Gym: 9 per 1,000
  • Beauty: 27 per 1,000
  • MLMs: 5 per 1,000
  • International Sales: 20 per 1,000
  • Logistics: 5 per 1,000
  • Supplements and Nutraceuticals: 17 per 1,000
  • Pharmacy: 10 per 1,000
  • Travel: 5 per 1,000
  • CBD: 25 per 1,000
  • Vape/E-Cig, Kratom, Smoke Shops, Tobacco: over 10 per 1,000

What Is the Average Chargeback Value?

This statistic refers to how much revenue merchants lose from customers filing chargebacks.

Merchant transactions with higher average value also have the highest average chargeback value, making it crucial to reduce chargeback rates in high-AOV industries. The average chargeback value in the United States is $110.

When customers initiate chargebacks, the merchant will also have to pay chargeback fees, significantly increasing operational costs. This means that a single chargeback dispute could cost triple the amount of lost revenue.

Chargeback Reason Code Statistics

Financial institutions, payment processing companies, and credit card companies use reason codes to explain why the chargeback was initiated. A study split industries into 14 categories and found that Fraud - Card Not Present (CNP) was the most common reason code in 8 of the industries.

These are the relevant industry groups and the most common reason codes for each.

Adult Industry

  • Fraud - CNP: 67%
  • Transaction Not Recognized: 9%
  • Cancelled Recurring Billing: 5%
  • Other: 20%

Consultation and Training Services

  • Fraud - CNP: 35%
  • Transaction Not Recognized: 27%
  • Cancelled Recurring Billing: 10%
  • Other: 27%

Credit Repair Services

  • Fraud - CNP: 43%
  • Transaction Not Recognized: 23%
  • Cancelled Recurring Billing: 13%
  • Other: 21%

Entertainment

  • Fraud - CNP: 60%
  • Transaction Not Recognized: 21%
  • Cancelled Recurring Billing: 12%
  • Other: 8%

Health & Beauty

  • Fraud - CNP: 32%
  • Transaction Not Recognized: 17%
  • Cancelled Recurring Billing: 13%
  • Other: 38%

IT Services

  • Fraud - CNP: 35%
  • Transaction Not Recognized: 27%
  • Cancelled Recurring Billing: 10%
  • Other: 27%

Marketing

  • Fraud - CNP: 60%
  • Transaction Not Recognized: 21%
  • Cancelled Recurring Billing: 12%
  • Other: 8%

Retailers

  • Fraud - CNP: 32%
  • Transaction Not Recognized: 17%
  • Cancelled Recurring Billing: 13%
  • Other: 38%

Travel & Rental

  • Fraud - CNP: 35%
  • Transaction Not Recognized: 27%
  • Cancelled Recurring Billing: 10%
  • Other: 27%

Chargeback Fraud Statistics

Chargeback fraud occurs when a legitimate transaction is reversed. Merchants state that, on average, 45% of chargeback requests are fraudulent. Many of these are friendly fraud chargebacks, such as due to unauthorized purchases by family, late subscription cancellations, or insufficient funds.

While Mastercard states that 80% of chargebacks are third-party ecommerce fraud, Ethoca reports that 70% of all chargeback fraud is first-party fraud, meaning it is initiated by the consumer. In other words, criminal fraud is the primary reason for chargebacks, but fraud is mostly first-party.

Research on chargeback fraud across all sectors presented the following data.

  • 17% of customers will stop using cards after payment disputes, potentially resulting in lower revenue.
  • 72% of cardholders stated that convenience is a reason to dispute charges.
  • 60% of first-party fraud perpetrators stated financial hardship as the reason.

Chargeback Risk Statistics

Card issuers like Visa and Mastercard have been actively fighting payment fraud, leading to a 59.6% drop in chargeback risk since 2017. The risks associated with chargebacks include the following.

  • Chargeback-related costs are high, with merchants losing up to $4.61 per dispute.
  • Chargebacks occur in 73.6% of all disputes.
  • US businesses account for 10% of all global chargebacks.
  • 52% of customers dispute directly with their card issuers rather than trying to resolve the issue with the merchant.
  • Self-serve dispute portals increase total chargebacks by 20 to 40%, showing that chargeback patterns are heavily influenced by infrastructure.
  • Businesses lose up to 1.8% of their revenue to fraud.
  • Processing errors, like unclear invoices, contribute to chargebacks. 50% of customers investigated a transaction in the last 12 months.

Chargeback Management Statistics

Up to 60% of merchants do not attempt to recover lost revenue in at least two out of five cases. 55% of these state that fighting chargebacks is too time-consuming, leading to high fraud losses.

According to a recent survey, merchants are using the following management techniques:

  • 77% of merchants use the card issuer's compelling evidence rule to successfully dispute claims.
  • 80% of merchants have submitted compelling evidence to attempt to mitigate chargebacks.

However, 60% of merchants still handle chargebacks manually, despite automated chargeback processes that could reduce their rates.

Chargeback Alert Statistics

A chargeback alert enables rapid dispute resolution by warning merchants when customers request refunds. It's estimated that about 40% of merchants use these tools. Other statistics about this vital fraud prevention metric include:

  • Using both Verifi and Ethoca can reduce chargebacks and fraud by up to 80%.
  • Alerts cover 70% to 80% of all disputes.
  • Total costs per dispute can be up to $450 in the travel industry and $315 for ecommerce, but an alert costs between $20 and $30.
  • Automated alert systems and AI can reduce review times by up to 70%.

Chargeback Prevention Statistics

The Merchant Risk Council surveyed professionals across industries such as SaaS, retail, digital goods, entertainment, and professional services to understand how these companies monitor customers at each step of the sales process, a critical element in reducing chargebacks.

Of the merchants surveyed, they cited these as the most valuable ways to prevent chargebacks:

  • Flagging accounts and monitoring high-risk transactions: 88%
  • Notifying customers of shipping data and clarifying policies: 85%
  • Verifying identity, such as an address verification service: 84%
  • Filing formal disputes and fighting complaints: 80%
  • Enhancing requirements for identity verification: 76%

Chargeback Data on Win Rates

Chargeback win rates refer to how often merchants win when they dispute fraudulent chargebacks, such as friendly fraud. With chargebacks, merchants win the dispute approximately 41% of the time, but win rates vary significantly by industry.

  • Alcohol: 45%
  • Sports Betting, Gambling, and Casinos: 44%
  • Gaming: 30%
  • Fantasy Football: Below 30%
  • Training/Coaching and Consulting: 20-30%
  • Automotive: 37%
  • Online Dating: 78.4%
  • Event Ticketing: 32%
  • Digital Services (SaaS, Tech Service, SEO, SEM): 50-60%
  • Fintech: 43.7%
  • High-Volume and Wholesaling: 30-50%
  • Ecommerce: 20-30%
  • Credit Repair and Debt Collection: Below 30-40%
  • Medical Billing: 22%
  • Telehealth: 72.9%
  • Timeshares: Below 30%
  • Subscriptions: 49.1%
  • Firearms: 20-30%
  • Pawn Shops: 56%
  • Precious Metals: 20-40%
  • Gym: 21-20%
  • Beauty: 70%
  • MLMs: 20-30%
  • International Sales: 36.5%
  • Logistics: 30-42%
  • Supplements and Nutraceuticals: 30-33%
  • Pharmacy: 70%
  • Travel: 30.5%
  • CBD: Below 30-45%
  • Vape/E-Cig, Kratom, Smoke Shops, Tobacco: Below 30-40%

How Adaptiv Payments Can Help You Manage Chargebacks

Adaptiv Payments offers chargeback prevention solutions tailored to your industry and business model. Calculate accurate chargeback statistics, improve customer satisfaction, and access dispute management right from your portal for easy transaction management. Contact us today to get a customized quote and learn more about our services.

About the Author

Headshot of Payments Writer Paul Smith

Paul Smith

LinkedIn

Director of Sales at Adaptiv Payments

Paul Smith is a payments expert with over a decade of experience underwriting, procuring, and advancing the payments industry. Having been on-the-ground in the past getting high-risk merchants approved, he has invaluable payment industry knowledge.

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