Chargeback & Fraud Cost Calculator
See what disputes cost you each month and whether your chargeback rate puts your account at risk.
How the Chargeback & Fraud Cost Calculator Works
A chargeback is more than a refund. The customer's bank pulls the money back, you pay a dispute fee, and if you lose the case you lose the sale as well as the product you shipped. Beyond the direct cost, a high chargeback rate can lead to extra monitoring, fines, higher fees, or even a closed merchant account.
Enter your monthly orders, average order value, net profit margin, chargeback rate, the dispute fee your processor charges, and the share of disputes you lose. The tool estimates the number of chargebacks, the disputes you lose, the fees and revenue you give up, and the total monthly loss. It also shows how many extra orders you must win just to recover that loss, and it rates your chargeback rate against common risk thresholds.
Key Formulas Behind This Tool
- Monthly Chargebacks: Monthly Orders x Chargeback Rate %
- Disputes Lost: Monthly Chargebacks x Disputes Lost %
- Dispute Fees: Monthly Chargebacks x Dispute Fee
- Revenue Lost: Disputes Lost x Average Order Value
- Total Monthly Loss: Dispute Fees + Revenue Lost
- Orders Needed to Recover: Total Monthly Loss / (Average Order Value x Net Profit Margin %), rounded up
- Risk Status: Under 0.65% is safe, 0.65% to 0.90% is a warning, above 0.90% is high risk
Frequently Asked Questions (FAQ)
What is a chargeback rate?
It is the number of chargebacks in a period divided by the number of orders (or transactions) in that period. A store with 5 chargebacks on 1,000 orders has a 0.50% chargeback rate.
How does this calculator count the cost of a chargeback?
Every dispute costs you the processor dispute fee, whether you win or lose. If you lose the dispute, you also lose the full order value, because the sale is reversed while the product has already shipped and cannot be recovered.
What do the risk levels mean?
This tool uses common rules of thumb: under 0.65% is safe, 0.65% to 0.90% is a warning, and above 0.90% is high risk. Card networks and processors run their own monitoring programs with their own ratios, counts, and fines, and those rules change, so confirm your exact limits with your payment processor.
What is the default dispute fee?
The field starts at $15 per chargeback, a figure many processors charge. Your processor may charge more or less, so enter the amount shown in your payment account.
How can I reduce chargebacks?
Use a clear billing descriptor so customers recognize charges, send tracking and delivery confirmation, respond quickly to customer messages and refund requests, use fraud screening and address checks, and keep strong evidence ready to contest disputes.