2019 Chargeback Field Report


The 2019 Chargeback Situational Field Report, brought to you by Card Not Present® and Chargebacks911®, is a comprehensive report offering a cross-view of the state of chargebacks and chargeback management in card-not-present payments. Researchers surveyed merchants in a wide range of verticals to identify relevant facts and figures concerning chargebacks, disputes, and fraud, plus the tools, services, and solutions employed for fraud detection and chargeback management.

We promoted the survey in conjunction with Card Not Present to diversify the pool of participants across various industries, scales, and chargeback risk levels. The results generated represent a cross-section composed of more than 200 online, multichannel, and mobile commerce merchants. Fewer than 10 percent of survey participants are current Chargebacks911 customers.

In all, more than 71 percent of participants reported they are currently disputing chargebacks. If bias in these results exists, it’s through the disproportionate inclusion of merchants who are proactive in their efforts to address disputes. Regardless, the results indicate that merchants continue to struggle with managing chargebacks, as the majority feel they lose most of their cases. Merchants also agree that friendly fraud is the primary source of disputes, yet comparatively few report using any chargeback reduction tools.

We also included a section focusing on the new tools and regulations introduced into the payments space within the last few months. Earlier changes such as VCR appear to have a limited effect on merchant chargeback rates, while newer tools like VMPI are still not on merchants’ radars in a significant manner.

Please note that not every participant answered every question, and that for both clarity and ease of use, we've made the decision to round all percentages to a whole number. The combination of these two factors may cause some totals to be more or less than exactly 100%.

Key Takeaways

The majority of respondents dispute at least some chargebacks, with most reporting they only dispute a portion of their total chargebacks.

Many merchants do not track second chargebacks, which makes calculating effective win rates inaccurate.

The majority of respondents manage chargebacks in-house; most are not utilizing any third-party chargeback management solution.

Merchants using a third-party solution reported winning a higher percentage of disputes than those relying solely on in-house teams, compared to overall chargeback volume.

Identifying friendly fraud and managing the dispute process were reported as the biggest challenges facing merchants.

Most respondents were aware of the Visa Claims Resolution policy changes, but few reported a decline in chargebacks resulting from the rules. This may be, in part, because very few merchants report using VMPI to prevent chargebacks.

A minority of respondents were aware of Mastercard’s Dispute Resolution Initiative and very few of those reported observing any meaningful impact from the changes.

On average, respondents estimated that third-party, criminal fraud was responsible for a minority of their chargebacks, while friendly fraud was, by a small measure, the greater culprit.

More than half of all respondents report an increase in the instances of friendly fraud over the past three years, while a small minority reported a decline during the same period. Those reporting an increase cited somewhat alarming average stats.

Merchants using chargeback alerts reported a modest average reduction in chargebacks. 

About the Participants

General Demographics

The respondents who participated in the Chargeback Field Report survey reflect businesses of all sizes within the card-not-present (CNP) payments space.

A little more than one-third of represented organizations have 50 or fewer employees, and around 20 percent have 1000 employees or more.

Company size by number of employees

250-1000 Employees
1000+ Employees
20-249 Employees
<20 Employees

Nineteen percent of respondents reported at least $100 million annually in online revenue, with 24 percent earning at least $50 million annually.

Organizations participating in the survey reported average order values that ranged from $50 or less (22 percent) to $500 or more (17 percent) with the majority falling between those extremes.

Nearly a third of the organizations surveyed support recurring billing or subscription services. These billing models are more likely to be used by merchants selling digital goods and services. Twenty-two percent of respondents exclusively sold software or other digital goods, compared to 27 percent that dealt only with services and 21 percent which sold physical goods only. Another 22 percent dealt with more than one of the product categories.

We also asked merchants about the methods of payment they accepted, in addition to credit and debit cards. Nearly half are now accepting bank transfers as payments, and about as many are set up to accept payments via eWallets, such as PayPal or Apple Pay.

It’s important for merchants to remember that while eWallet transactions involving credit cards still have the same network chargeback protections as other card purchases, transactions based on an eWallet cash balance may be handled differently. Customers are still generally protected, but any coverage is provided by the parent company (PayPal, for example), not the card schemes...meaning the amount of protection and how it is implemented can vary greatly.

Another newer payment method is cryptocurrency such as Bitcoin. Only a few companies seem to be offering this, which most likely reflects a lack of demand: for better or worse, cryptocurrency has not gained widespread acceptance among consumers, and therefore merchants have been slow to adapt it. Since cryptocurrency involves a straight-up exchange (the same a cash), chargebacks are not possible.

Besides credit cards, which of the following payment methods do you accept?

eWallets (PayPal, Apple Pay)
Bank Transfers
Cryptocurrency (Bitcoin)

Chargeback Types and Sources

While almost all of the survey respondents reported receiving chargebacks, just how many they received varied greatly. Roughly 22 percent reported receiving over 150 chargebacks per month.

How many estimated chargebacks does your organization receive monthly?

Less than 10
10 to 150
More Than 150

Nearly half the respondents said they received fewer than 10 chargebacks per month, but that low number can be deceiving: chargeback threat is also affected by the average ticket value of each chargeback. For a merchant whose average ticket value is, for example, $1000, one chargeback a month might be more devastating than 25 chargebacks for a merchant with an average transaction of $10 or less.

Sixteen percent of respondents set an average transaction value at over $500 per; another 11 percent claimed an average of $20 or less. The remainder fell more or less equally between the high and low ends, with 27 percent citing an average transaction value between $20-$100, and 36 percent reporting their average value between $100-$500.

What is the average ticket value of your chargebacks?

Less than $20
$20 - $99
$100 - $500
More than $500

The type of goods sold also has an obvious impact on chargebacks, as well: nearly 90 percent of respondents dealt with software, services, and/or digital goods—even if not exclusively (many participants sell in multiple categories).

In which product categories do you receive chargebacks?

Physical Goods
Physical Goods
Software & Digital
Software & Digital
Ticket Sales
Ticket Sales

Of respondents reporting under $1 million in revenue, less than 10 percent dealt in physical goods, and even a smaller number sold physical goods exclusively.

It’s also interesting to note that of the respondents who reported NOT disputing chargebacks, 75 percent dealt only with software, services, or other digital goods. This is likely because the losses are not as steep when no physical good is lost.

Chargeback Management

Unfortunately—but not surprisingly—the chargeback rates we uncovered are at a dangerously high level for over one-third of respondents. Of the respondents who knew their chargeback rates—and nearly 13 percent did not know—one in six report a chargeback rate of 1 percent or higher.

Thirty-eight percent of respondents cited a chargeback rate of .1 percent or lower; another 35 percent said their rate was between .1 and one percent. Over 14 percent reported a chargeback rate of over one percent, which could potentially limit their ability to accept credit cards at all.

What is your current chargeback rate?

Less than .1%
chargeback rate
.1% - 1%
chargeback rate
More than 1%
chargeback rate
Don't know
chargeback rate

Most respondents—over 65 percent—reported receiving 75 or fewer chargebacks in a given month, but nearly 15 percent admitted to over 250 chargebacks a month. Of those citing a rate of over .1 percent, 80 percent reported at least one high-risk factor, typically the use of a subscription business model.

Risk factors

Certain elements are commonly known to increase chargeback risk, and over half of respondents report one or more of these liabilities. Approximately one-third were actually in a high-risk industry, while the rest simply employed high-risk factors such as subscription billing or free trial offers.

Which of the following chargeback risk elements affect your organization?

High-risk industry
Subscription billing
Affiliate marketing
Free trial offers

Chargebacks and Disputes:
An Overview

Credit card chargebacks were originally invented as a consumer protection against criminal fraud and unresolvable merchant issues, ensuring that customers won’t be held accountable for transactions they didn’t authorize or items they didn’t receive.

More recently, however, chargebacks have become a growing concern for merchants. Cardholders have discovered how to abuse the system by filing fraudulent chargebacks—a process known as “friendly fraud.” Friendly fraud disputes can happen for multiple reasons, from convenience on the part of the cardholder to deliberate “cyber-shoplifting,” where the cardholder is attempting to get something for free. Either way, many merchants are now finding that friendly fraud accounts for a growing percentage of their chargeback volume.

Each time a cardholder files a chargeback, the merchant has two options: accept the chargeback or fight it. Merchants who choose to fight the chargebacks enter into the process of representment (sometimes called a chargeback reversal). Chargeback representment is the organization’s chance to plead its case, prove the chargeback wasn’t warranted, and retrieve funds.

Chargeback Management Challenges

In our survey, we asked respondents to identify their three biggest challenges with respect to chargeback management. The two most cited challenges were identifying friendly fraud and disputing chargebacks); combined, those two factors made up nearly half of the top responses.

The third most cited challenge was reducing overall chargeback rates, followed closely by the need to balance chargeback risk against false positives. Cost and lack of resources/experience were also mentioned, both items specifically reflecting challenges in the area of representment.

What is your biggest challenge with respect to chargeback management?

Identifying friendly fraud
Disputing changebacks
Reducing overall chageback rates
Balancing chargeback risk against false positives


We asked participants to estimate what percentage of their chargebacks were caused by criminal fraud and what percentage came from friendly fraud. Of those who responded to the question, a third (33 percent) identified criminal fraud as the biggest source of chargebacks, while nearly half (46 percent) of organizations say most of their chargebacks come from friendly fraud.

Estimated percentage of your chargebacks coming from criminal/friendly fraud?

Criminal Fraud
Friendly Fraud

This is in stark contrast to national averages which show that a mere fraction of chargebacks are caused by criminal fraud.

Other factors seem to come into play here, as well: when broken down by company revenue, for example, 90 percent of merchants citing friendly fraud as the cause of all their chargebacks reported annual revenue of $10 million or less.

We can also look at these numbers based on types of goods sold. Roughly one in four respondents said criminal fraud was responsible for less than two percent of overall chargebacks. All of them dealt in digital goods; none sold physical merchandise.

We also asked merchants specific questions to determine the general awareness and prevalence of friendly fraud. Of those who responded, only around 17 percent said their instances of friendly fraud had decreased over the last three years. Over 50 percent felt that it had increased, despite an influx of new regulations concerning the chargeback system (for more details, see page 18).

Has friendly fraud increased or decreased over the last 3 years?


Of those reporting an increase, only about 16 percent said the increase was less than 10 percent. Over 45%, however, felt friendly fraud had increased by 30% or more.

How much of an increase have you seen?

Less than 10%
10% - 29%
30% - 40%

Chargebacks: Fighting Back

An overwhelming majority (71 percent) of merchants we surveyed are currently disputing chargebacks. As we mentioned earlier, however, the demographic of the respondents is by default skewed toward merchants who are aware of and concerned about chargebacks already; the statistics likely do not represent the market in general.

Organizations that regularly dispute chargebacks

Dispute chargebacks
Don't Dispute

Those who did dispute chargebacks were asked what percentage of chargebacks they engaged with. Fewer than half the organizations submitted representments to fight 85% or more of their chargebacks. This could be the result of many factors, including order value, chargeback reason code, and what relevant dispute information a merchant possesses.

Survey respondents that do not dispute or represent chargebacks were asked why they did not. The most common responses included a lack of sufficient resources and belief they couldn’t win any of their representments even if they tried.

Even among those companies that actively engage in representment, only a portion of chargebacks are actually disputed. Half are ignoring as many as 42 percent of their chargebacks, and nearly 20 percent aren’t bothering to fight any at all.

Approximately what percentage of chargebacks do you dispute?

1% - 24%
25% - 54%
55% - 84%
85% - 100%

Perhaps more telling, nearly half of those who do dispute chargebacks are losing up to 60 percent of their cases. Less than a quarter claim to win 85 percent or more of the chargebacks they dispute...not of total chargebacks they receive.

Approximately what percent of disputed chargebacks do you win?

Don't know/don't track
Less than 10%
10% - 39%
40% - 69%
70% - 84%
85% - 100%

That number gets worse when it comes to pre-arbitration: nearly a quarter of those who regularly engage in representment do not know whether those cases move on to become second chargebacks...meaning the number of cases won is most likely significantly lower.

Of the participants who indicated they regularly disputed chargebacks, the majority (81 percent) did so using a dedicated internal fraud team. The others outsourced to a third party, although some reported using both an outside vendor and in-house resources.

Merchant managing disputes in-house vs. outsourcing to a third party.


Respondents who reported using a third-party solution cited an overall win rate approximately 20% higher than those who disputed chargebacks using an in-house resource.

20% higher win rate reported by organizations using a third-party chargeback management solution.

A surprising 80 percent reported using none of the chargeback reduction solutions available on the market. This not only includes commercial products, but even network programs such as Visa Merchant Purchase Inquiry (VMPI) integration, which a mere two percent of merchants are currently taking advantage of.

Which of the following chargeback reduction solutions do you use?

None / dont know
Chargeback Alerts

Of the organizations that are using a prevention solution of some type, most were utilizing an alerts program. This is where participating issuers alert the merchant each time a transaction dispute is filed, if the basis of the claim is credit card fraud. Doing so allows the merchant to refund the cardholder rather than get hit with a chargeback.

On average, respondents who had impemented a chargeback alerts program reported a 19% reduction in chargebacks

The impact of
New Regulations

Over the last two years, the card schemes have made multiple significant changes to the way chargebacks are filed and disputed—some with more fanfare than others. The most dramatic change came in the form of Visa Claims Resolution (VCR), a major overhaul of the chargeback system. Mastercard followed suit with its Mastercard Dispute Resolution Initiative (MDRI), which reportedly had a similar purpose but was a less dramatic change.

As it stands, Visa’s program appears to have a somewhat wider awareness than Mastercard’s. This is likely to change going forward, since the initiative is not fully implemented yet.

Awareness of scheme changes to the dispute process


Despite the awareness of VCR, merchants seem much less aware of the Visa Merchant Purchase Inquiry (VMPI) program, which was launched within the same time period: One third of respondents admitted to needing more information on the subject.


Overall, when asked how they felt the program had affected chargebacks and chargeback management, over 82 percent believed VCR had had little to no impact. Only 6 percent felt VCR had made a “significant” impact.

Well over ¾ of respondents believed VCR had little to no impact on chargeback management.

Still, 19 percent of these merchants did see a decline in their number of Visa chargebacks once the changes were in effect. Twenty-five percent didn’t know if there had been a decline, but more than half (55 percent) said the program had not reduced chargeback numbers.

Organizations noting a decline in Visa chargebacks post-VCR

I don't know

Among those who did experience a decline, the average reduction was around 12 percent. The overwhelming majority, however—over three-quarters of the respondents—appeared to be ambivalent about whether the program actually made the chargeback process better or worse.


Awareness of MDRI among respondents trailed that of VCR, with only 42 percent participants saying they knew of it.

More than half of respondents reported they were not aware of MDRI

Its perceived impact was also considerably lower than Visa’s program, with only 10 percent believing MDRI had any impact at all.

Even so, nearly a quarter of respondents cited a reduction in Mastercard chargebacks since the initiative was launched, with the average decline in the area of 13 percent. Forty-five percent said they saw no decline since the launch of MDRI.

As with VCR, most merchants didn’t feel much of an impact, with only about nine percent saying MDRI had made any notable difference one way or the other.


The Visa Merchant Purchase Inquiry (VMPI) program works in conjunction with VCR to give issuers more resources with which to respond to cardholder inquiries. The goal is to filter out simple, answerable inquiries before they escalate to a chargeback.

The number of survey respondents who had already integrated with VMPI was too small to make a reasonable statistic in terms of the program’s effectiveness. What seems more relevant is that less than 10 percent of all respondents had any plans to enroll in VMPI in the future.

So far only 2% of merchants are currently enrolled in VMPI

Despite the obvious upside, merchants do not seem to be taking advantage of the Visa program. Perhaps even more relevant, less than 10 percent of all respondents had any plans to enroll in VMPI in the future. Clearly, the importance and long-term benefits of this revolutionary yet relatively user-friendly program are not yet fully understood by a wide audience.

This low adoption rate could prove challenging to Visa in the future, but it will ultimately weigh heaviest on the merchants who aren't taking full advantage of VMPI. Visa suggests implementing the program through an authorized facilitator such as Chargebacks911 in order to enjoy the maximum benefit.


If the results of our survey are any indications, merchants are by and large aware of the chargeback problem; they’re less aware of any type of solution. A variety of tools exist for helping prevent chargebacks and challenge disputes, but to a large degree those tools are being ignored. This leads directly to wasted efforts and high chargeback rates, which in turn create a sense of futility about the entire subject.

But merchants don’t have to be victims. At Chargebacks911, we can assist you with automated chargeback responses to prevent unnecessary response fees, mitigate your overall risk of receiving chargebacks, and help you fight all instances of chargeback fraud. As authorized, certified Visa/VMPI facilitators, we can help you enjoy the benefits of easy, instant integration with the Visa Merchant Purchase Inquiry plugin and the Visa Resolve Online platform.

Chargebacks911 even offers comprehensive, end-to-end chargeback management ... and that means you have more time to concentrate on your business.

If you have questions concerning prevention, representment, VMPI, or any other chargeback management issues, contact us today.

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