Shopify Chargeback Cost Calculator
Understand the full financial impact of chargebacks — and whether your store is at risk.
How It Works
Chargebacks are the most expensive type of revenue loss. You don't just lose the sale — you also pay a dispute fee, lose the product, and risk your payment processing account.
Total Chargeback Cost = Lost Revenue + Dispute Fees + Lost Product Cost
Example
A store with $50,000 monthly revenue, 0.5% chargeback rate, $85 avg transaction, $15 dispute fee, $35 product cost:
- Chargebacks: ~3 per month
- Lost Revenue: $255
- Dispute Fees: $45
- Lost Product Cost: $105
- Total Monthly Cost: $405 (0.81% of revenue)
Frequently Asked Questions
What is a chargeback?
A chargeback is when a customer disputes a charge with their bank, forcing a reversal of the payment. Unlike a refund (which you control), a chargeback is initiated by the customer's bank and you have limited ability to prevent it.
How much does a chargeback cost?
A single chargeback costs the disputed amount + a chargeback fee ($15-100) + lost product cost. For a $85 order with a $15 fee and $35 product cost, the total loss is $135 — 159% of the original order value.
What chargeback rate will get my Shopify account flagged?
Shopify and payment processors typically flag accounts when chargeback rates exceed 0.9-1% of total transactions. Above 1%, you risk higher processing fees, account holds, or even termination.
What is friendly fraud?
Friendly fraud occurs when a customer receives the product but falsely claims they didn't, or disputes a legitimate charge. It accounts for 60-80% of all chargebacks and is the most common type merchants face.
How can I prevent chargebacks on Shopify?
Use clear billing descriptors, provide tracking numbers promptly, respond to customer issues fast, use fraud detection tools (Shopify Fraud Protect), keep detailed records, and fight illegitimate chargebacks with evidence.
Can I win a chargeback dispute?
Yes. If you have evidence (tracking showing delivery, customer communication, proof the product matched the description), you can win. The key is responding within the deadline and providing thorough documentation.