Chargeback Rate Limits

Chargeback rate limits are the maximum dispute levels card networks and acquirers allow before extra reviews and fees begin. The main measure is your chargeback ratio, which compares the number of chargebacks to the number of sales for a defined period, usually per merchant ID. Networks also watch your total monthly dispute count.

How limits are measured

Most networks use two signals. First is the ratio of chargebacks to sales. Second is the absolute count of chargebacks in a month. Visa often compares chargebacks in the current month to sales from a recent prior month. Mastercard commonly compares chargebacks and sales in the same month. Exact methods change, so confirm with your acquirer and the latest network guides.

What counts toward the ratio

A network chargeback counts when it is created by the issuer under network rules. Refunds you issue before a chargeback do not count. Alerts and pre dispute resolutions that you accept and refund usually do not count, but the rules differ by program and acquirer. Second chargebacks and arbitration steps relate to the same original case and do not create extra new cases for the ratio.

How to calculate your rate

Pick the period your network uses. Count all network chargebacks for that period. Count the sales that the network pairs with those chargebacks. Divide chargebacks by sales and convert to a percent.

Example. If you have 120 chargebacks and 9,500 sales in the paired period, your ratio is 120 divided by 9,500, which is 1.26 percent.

Key factors that affect the number

• The month the network uses for sales in the denominator

• Whether certain dispute types are excluded

• Whether the count is per merchant ID or rolled up by region