How Much is a Chargeback Fee?Unpacking the Price Tag on Chargebacks
How Much is a Chargeback Fee? Typical Cost Breakdowns for Widely-Used Processors
If you’re looking for a single, universal price for a chargeback fee… you’re not going to find it.
As a general rule of thumb, you can expect chargeback fees to range between $20 to over $100 per dispute. However, the payment processor you use, your risk level, and even your product vertical will influence the chargeback fee you’ll have to pay for each dispute.
In this article, we’ll explore the fee range in more detail, and break down chargeback fees by major payment processors.
Chargeback Fees
Why do processors apply chargeback fees? How much do chargeback fees cost? And crucially, how can you avoid them? In this guide, we take a closer look at how these dispute fees work and what you can do to insulate your business from unnecessary losses.
How Much is a Chargeback Fee?
Chargeback fees usually range from $20 to $100 per dispute. Representment and arbitration fees are additional, as are fines and surcharges levied upon merchants enrolled in dispute monitoring programs.
There’s not a single answer here. Chargeback fees are assessed by acquirers and processors, so they can vary. That said, fees normally range between $20 and $100 per claim. They can go much higher, though, especially if your business is considered “high risk.”
Exact amounts depend on the acquirer, which bases its calculations on a range of factors. This can include your chargeback history, the products or services involved in the transaction, the industry and vertical, etc.
The price tag is not necessarily the same for each chargeback, either. Banks have leeway to impose higher fees at their discretion. So, a merchant with one dispute may be charged a certain rate, but a merchant with 100 chargebacks per month may pay a higher per-chargeback fee.
To illustrate this point, here are a few of the most prominent brands in the payment processing space, along with the nominal chargeback fee they assess (if any):
Chargeback fees are just the tip of the iceberg. Sink them before they sink you.
Each payment entity may have its own fee structure and policies governing chargebacks, making it essential for merchants to understand the terms of their agreements. These fees can range from a fixed amount to a percentage of the transaction value. They may even include additional penalties for merchants with high chargeback rates.
Square is the only major payment processor that doesn’t assess chargeback fees. As they say on their website, “Square doesn’t charge any additional fees for disputes.”
That makes Square a rarity among processors; in general, almost all payment processors assess dispute fees.
