TL;DR
- A good chargeback rate is below 0.5% of transactions.
- Visa fines merchants at a 1.5% VAMP ratio, at 8 USD for every disputed or fraudulent transaction, once a merchant passes 1,500 events in a month.
- Acquiring banks are measured at 0.5% above standard and 0.7% excessive, which is why an acquirer acts before Visa does.
- Mastercard's Excessive Chargeback Merchant program starts at a 1.5% rate with 100 chargebacks in a month, and fines reach 25,000 USD a month by month seven.
- Stripe's Dashboard reports two different chargeback rates for the same week, and Visa calculates a third.
Who this helps: a subscription business checking whether its chargeback rate is normal, and finding that the number changes depending on where it is read.
Ask three people at a payments company what your chargeback rate is and you can get three answers, all honest. The number moves depending on which date you count from, which disputes you include, and whose denominator you use. Here is every threshold that governs you, and which number each one is measuring.
What is a good chargeback rate?
A good chargeback rate is below 0.5% of transactions. Visa does not fine a merchant until a 1.5% VAMP ratio, but acquiring banks are themselves measured at 0.5% above standard and 0.7% excessive, and an acquirer can close a merchant account long before Visa assesses a fee.
Acquiring banks manage their own VAMP ratio by acting on the merchants inside it. Those actions are account reviews, rolling reserves held against future disputes, and account closure. A merchant sitting at 0.9% is well inside Visa's 1.5% merchant threshold and well outside the 0.5% figure its acquirer is judged on.
What chargeback rate is too high?
A chargeback rate above 0.75% is treated as excessive across the payments industry, and a rate above 1.5% places a merchant in Visa's VAMP excessive tier and Mastercard's Excessive Chargeback Merchant program. Stripe documents 0.75% as the level the processing industry recognizes as excessive.
The direction of a chargeback rate matters as much as its level. Stripe states that "a sudden spike or steep upward trend can trigger placement in a monitoring program" before a merchant reaches any published threshold, so a rate climbing from 0.3% to 0.7% across three months is treated more seriously than a rate flat at 0.7%.
What is the difference between dispute rate and dispute activity?
Dispute activity counts disputes by the date the dispute arrived, divided by successful payments in that same period. Dispute rate counts disputes by the date of the payment being disputed, divided by successful payments.
Stripe's published example uses 1,000 payments taken in one week and 10 disputes received in that same week, of which only 3 relate to payments from that week. Those figures produce dispute activity of 1.0% and a dispute rate of 0.3%. Both numbers are correct, and they describe the same week at the same business.
Stripe reports 1.0% and 0.3% for the same week at the same business. Dispute activity counts all ten disputes; dispute rate counts only the three that belong to that week's payments.
Stripe reports dispute activity in the Analytics section of its Dashboard and dispute rate on the Radar page. A merchant reading one number in one place and a different number in the other is not looking at an error.
10 disputes arrived this week
Which chargeback rate do Visa and Mastercard use?
Visa and Mastercard monitoring programs use the dispute activity calculation, which counts disputes by the date they arrive rather than the date of the original payment. Stripe states directly that the card networks' monitoring programs use that calculation.
The two networks differ in the denominator. Visa divides disputes by payments captured in the same calendar month. Mastercard divides chargebacks raised this month by payments captured in the previous month, so a business growing 20% month over month reports a higher Mastercard rate than Visa rate on identical dispute counts.
What is Visa's VAMP threshold in 2026?
Visa's VAMP merchant excessive threshold is a 1.5% ratio alongside 1,500 disputes and fraud reports in a month, for merchants outside the CEMEA region. Visa assesses 8 USD for every disputed or fraudulent transaction once a merchant is in the excessive tier.
The VAMP ratio is not a dispute rate. Visa's VAMP count adds fraud reports, sourced from Visa's TC40 reporting, to disputes, sourced from TC15 reporting, and divides the total by all captured payments. A single transaction that generates both a fraud report and a dispute is counted twice in the VAMP numerator.
Visa excludes two categories from the VAMP count. Disputes resolved through pre-dispute products such as Rapid Dispute Resolution are excluded, and fraud reports that qualified underCompelling Evidence 3.0 are excluded.
What is Mastercard's chargeback threshold?
Mastercard's Excessive Chargeback Merchant program starts at a 1.5% chargeback rate alongside 100 to 299 chargebacks in a month. The High Excessive Chargeback Merchant tier starts at a 3% rate alongside 300 or more chargebacks in a month.
Mastercard fines begin in month two of either program. An Excessive Chargeback Merchant pays 1,000 USD a month from month two and 25,000 USD a month by month seven. A High Excessive Chargeback Merchant pays 1,000 USD a month from month two and 50,000 USD a month by month seven.
Mastercard removes a merchant from the program once chargebacks stay below the threshold for 3 consecutive months. A merchant in the High Excessive tier whose rate falls below 3% but stays above 1.5% moves down to the Excessive tier rather than exiting.
Every chargeback threshold, compared
Six thresholds govern a card-accepting merchant. Each row below names the threshold in full, so a row read on its own still states who sets it, what volume triggers it and what it costs.
| Threshold | Rate | Minimum volume | Penalty |
|---|---|---|---|
| Visa VAMP acquirer above-standard threshold | 0.5% | No minimum | The acquiring bank is flagged. Acquirers respond by reviewing, holding reserves against, or closing the merchants contributing to the ratio. |
| Visa VAMP acquirer excessive threshold | 0.7% | No minimum | The acquiring bank is flagged at the higher tier, and acts on contributing merchants faster. |
| Visa VAMP merchant excessive threshold | 1.5% | 1,500 disputes and fraud reports in a month | Visa assesses 8 USD for every disputed or fraudulent transaction. |
| Mastercard Excessive Chargeback Merchant (ECM) | 1.5% to 2.99% | 100 to 299 chargebacks in a month | 1,000 USD a month from month two, rising to 25,000 USD a month by month seven. |
| Mastercard High Excessive Chargeback Merchant (HECM) | 3% or above | 300 or more chargebacks in a month | 1,000 USD a month from month two, rising to 50,000 USD a month by month seven. |
| Payments industry convention, set by processors rather than a card network | 0.75% | No minimum | No fine attaches to this figure. Stripe documents it as the level the processing industry treats as excessive. |
What is the average chargeback rate by industry?
No reliable published average chargeback rate by industry exists. The figures circulating as the all-industry average in 2026 include 0.26%, 0.57% and 0.65%, a spread of more than two times on the same supposed statistic.
Published chargeback rates by industry disagree for three specific reasons. A rate built on dispute date is not comparable with a rate built on charge date. A Visa-style same-month denominator is not comparable with a Mastercard-style prior-month denominator. And a chargeback vendor's published average describes the merchants that approached that vendor, which are the merchants with a chargeback problem.
How do you calculate your chargeback rate?
Divide the number of disputes received in a calendar month by the number of payments captured in that same month, then multiply by 100. For Visa's VAMP ratio, add fraud reports to the disputes in the numerator before dividing.
Stripe merchants can export disputes by created date and payments by capture date from the Payments tab. Stripe adds one adjustment for US accounts: count payments for the calendar month, but count disputes from the 5th of that month to the 5th of the next, which accounts for the delay between Stripe receiving a dispute and reporting it to the card network.
Merchants on Adyen, Braintree, Shopify Payments and other processors use the same two exports and the same formula. Where a processor does not surface fraud reports, a merchant can calculate dispute activity but not the VAMP ratio, and the resulting number is a floor rather than the figure Visa holds.
Any chargeback rate covering the last 120 days is provisional. Cardholders have 120 days from the transaction date to dispute most charges, so dispute rate figures for recent dates continue to rise after they are first calculated.
How many transactions do you need before a chargeback rate is meaningful?
A segment needs enough transactions that one chargeback does not move its rate by more than the difference worth acting on. At 400 transactions a single chargeback is worth 0.25%, and at 4,000 transactions the same chargeback is worth 0.025%.
A 0.25% swing is half the distance between a 0.5% acquirer threshold and a 0.75% industry line, which means a 400-transaction segment cannot distinguish a healthy segment from an excessive one. A segment of 40 transactions with one chargeback reads as 2.5% and reads as 0% with no chargeback, and nothing about the segment changed except one customer's decision.
Comparing chargeback counts rather than chargeback rates produces the opposite error. A campaign generating 50 of a merchant's 100 monthly disputes on 5,000 of its 7,000 sales runs at 1.0%, while a campaign generating 30 disputes on 600 sales runs at 5.0%. Cutting the first campaign removes 71% of the sales and raises the overall rate.
Below a few hundred payments, one chargeback moves the number
Does winning a dispute lower your chargeback rate?
Winning a dispute does not lower a chargeback rate. Card network monitoring programs count every dispute regardless of its outcome.
Stripe gives the reason directly: if monitoring programs considered outcomes, they would have to wait months for every dispute to resolve before calculating a rate, and the programs are more interested in how successfully a merchant prevents disputes than in whether the merchant wins them. Winning a dispute returns the disputed amount and leaves the ratio unchanged, which is why thedecision to fight, refund or keep turns on the money rather than the record.
Why does my chargeback rate not match what Visa reports?
A merchant's own chargeback rate differs from Visa's reported figure for three documented reasons. Disputes the processor absorbed never appear in the merchant's dashboard or API, Visa scores each statement descriptor as a separate account, and any figure covering the last 120 days is still provisional.
Stripe states that some disputes where a merchant has no liability "don't appear in your Dashboard or API responses because Stripe handles them on your behalf", while "monitoring programmes still include them in their calculations". Examples Stripe gives are disputes on already-refunded payments, duplicate disputes, and disputes the card network created in error.
Visa identifies a merchant account by the static component of its statement descriptor combined with its acquiring bank. A business running three statement descriptors is three separate accounts to Visa, each carrying its own ratio, so a blended company-wide figure can sit under every threshold while one descriptor sits above them.
How do you lower a high chargeback rate?
Two mechanisms lower a chargeback rate, and they work on different timescales. Prevention reduces the number of disputes customers file, over one to two billing cycles. Pre-dispute resolution removes disputes from the ratio before they are counted, within days.
Prevention for a subscription business means a statement descriptor customers recognize, a cancellation flow that completes without contacting support, and a renewal reminder sent before the charge. Stripe's own guidance recommends a reminder 7 days before a yearly renewal and 2 to 3 days before a monthly renewal.
Pre-dispute resolution works through the card networks. A Visa dispute resolved throughRapid Dispute Resolution carries a status that excludes it from the VAMP count entirely, which is why two merchants with identical raw dispute counts can report materially different ratios.
FAQ
What is a good chargeback rate?
A good chargeback rate is below 0.5% of transactions. Visa does not fine a merchant until a 1.5% VAMP ratio, but acquiring banks are themselves measured at 0.5% above standard and 0.7% excessive, and an acquirer can close a merchant account long before Visa assesses a fee.
What chargeback rate is too high?
A chargeback rate above 0.75% is treated as excessive across the payments industry, and a rate above 1.5% puts a merchant into Visa's VAMP excessive tier and Mastercard's Excessive Chargeback Merchant program. Stripe also warns that a sudden spike or steep upward trend can trigger placement in a monitoring program before a merchant reaches any threshold.
What is the difference between dispute rate and dispute activity?
Dispute activity counts disputes by the date the dispute arrived, divided by successful payments in that same period. Dispute rate counts disputes by the date of the payment being disputed. In Stripe's published example, 1,000 payments and 10 disputes in one week produce dispute activity of 1.0% and a dispute rate of 0.3%, because only 3 of the 10 disputes relate to that week's payments.
Which chargeback rate do Visa and Mastercard use?
Visa and Mastercard monitoring programs use the dispute activity calculation, which counts disputes by the date they arrive rather than by the date of the original payment. Visa divides by payments from the same calendar month, while Mastercard divides by payments from the previous calendar month.
What is Visa's VAMP threshold in 2026?
Visa's VAMP merchant excessive threshold is a 1.5% ratio alongside 1,500 disputes and fraud reports in a month, outside the CEMEA region where the figures are 2.2% and 150. Visa assesses 8 USD for every disputed or fraudulent transaction above the threshold.
What is Mastercard's chargeback threshold?
Mastercard's Excessive Chargeback Merchant program starts at a 1.5% chargeback rate alongside 100 to 299 chargebacks in a month, and the High Excessive tier starts at 3% alongside 300 or more chargebacks. Mastercard removes a merchant from the program after chargebacks stay below the threshold for 3 consecutive months.
What is the average chargeback rate by industry?
No reliable published average exists. The figures circulating as the all-industry average in 2026 include 0.26%, 0.57% and 0.65%, a spread of more than two times, because the sources mix dispute-date and charge-date denominators and draw on self-selected samples of merchants who approached a chargeback vendor.
How do you calculate your chargeback rate?
Divide the number of disputes received in a calendar month by the number of payments captured in that same month, then multiply by 100. For Visa's VAMP ratio, add fraud reports to the disputes in the numerator and note that a transaction appearing as both a dispute and a fraud report counts twice.
How many transactions do you need before a chargeback rate is meaningful?
A segment needs enough volume that one chargeback does not move the rate by more than the difference you would act on. At 400 transactions a single chargeback is worth 0.25%, which is half the distance between a healthy rate and an excessive one, while at 4,000 transactions the same chargeback is worth 0.025%.
Does winning a dispute lower your chargeback rate?
Winning a dispute does not lower a chargeback rate. Card network monitoring programs count every dispute regardless of outcome, because waiting for outcomes would delay the calculation by months, so winning returns the disputed money and leaves the ratio unchanged.
Facts checked against Stripe's measuring disputes, dispute and fraud card monitoring programs, and query disputes and fraud data documentation, and against Visa's published VAMP thresholds. Last reviewed 23 September 2026.
