What Merchants Need to Know About Mastercard Dispute Fees
Chargebacks aren’t just a hassle for merchants. Banks also get hit with processing fees and other charges resulting from the dispute process. In many cases, they pass those fees on to you, the merchant.
Banks operating in the Mastercard ecosystem impose a chargeback fee for every chargeback filed. However, as a card network, Mastercard's fee scales operate a little differently from other financial institutions.
In this article, we’ll examine the Mastercard chargeback fee schedule. We’ll explain why Mastercard assesses these fees, and how you can protect yourself.
Recommended reading
- Mastercard Dispute Resolution: What You Need to Know
- Mastercom | What Is it? What is Mastercom Collaboration?
- Mastercard Chargeback Time Limits: The 2025 Guide
- Mastercard Chargeback Rules: Guidelines & Procedures
- How Mastercard First-Party Will Fight Video Game Disputes
- The Merchant's Guide to Mastercard Debit Card Chargebacks
In most cases, these fees are non-refundable and must be paid, even if the merchant proves the dispute was invalid through representment. This is because chargeback fees are intended to cover the administrative costs incurred due to the chargeback.
Learn more about chargeback fees
How Much Are Mastercard Chargeback Fees?
There is no single “Mastercard chargeback fee.” Exact fees vary depending on the acquiring bank, the location of the transaction, and the stage at which a chargeback is resolved.
Mastercard allows acquirers to assess per-chargeback fees to cover their costs for administering the chargeback. Every time you receive a chargeback, you are assessed a $20 to $100 chargeback fee by your acquiring bank. This fee helps acquirers cover the administrative costs of handling chargebacks. This is why chargeback fees are often nonrefundable, even if you subsequently represent the transaction and win the dispute.
Mastercard is able to set its own rules surrounding disputes. When a Mastercard cardholder files a chargeback, your acquirer will levy a chargeback fee, plus any Mastercard-specific fees. These include “progressive handling fees” for specific chargeback reason codes, for example.
You might also face additional surcharges if you’re enrolled in the two-tiered Mastercard Excessive Chargeback Program (ECP). This is a dispute monitoring program for high-risk merchants whose chargeback rates exceed the card network’s acceptable thresholds. If you are involuntarily placed in Mastercard’s ECP, you will be forced to pay program-specific fees on top of regular chargeback fees assessed by your acquirer and Mastercard.
Suffice to say: it’s a good idea to keep your chargeback rate in check.
Why Does Mastercard Assess Chargeback Fees?
Chargeback fees feel punitive, but their real purpose is to help acquirers cover the administrative costs of handling disputes.
Frankly, Mastercard lets banks assess these fees to cover the cost of administering the chargeback. Although the terms might seem harsh, Mastercard chargeback fees are not intended to be punitive. The fees are meant to cover any costs that result from handling and processing all those incoming chargebacks.
Each chargeback means the bank has to handle documents, forward them to the merchant, and ensure all documents are routed to the correct party. They must also spend time and energy recovering funds lost to the dispute. All this work takes time and resources.
Remember: banks and card networks deal with thousands of chargebacks daily. Those fees can really add up, so they are passed on to the merchants with whom the liability legally rests. Mastercard’s chargeback fees are intended to cover the cost of doing this added work.
What About Mastercard Chargeback Arbitration Fees?
An assortment of fees could be attached to each case, depending on the circumstances and the merchant’s status. Mastercard chargeback fees can add up quickly as a result.
If a merchant chooses to fight back, they could face even more fees and penalties should things go poorly. The fees below are associated with the Mastercard chargeback arbitration process:
| FEE TITLE | FEE DOLLAR AMOUNT |
| Filing Fees | USD 150.00 |
| Withdrawal/Accept fees | USD 150.00 |
| Administrative Fees (responsible party) | USD 250.00 |
| Technical Violation Fees | USD 100.00 |
| Appeals Fees | USD 500.00 |
**Figures are subject to change; check the most recent version of the Mastercard guide for details.
The above fees will only be applicable if the chargeback advances to arbitration. Like the Mastercard Dispute Administration Fee, other fees will apply to chargebacks filed in response to intra- and inter-European transactions.
Whatever the case, even ten chargebacks a month are enough to impact a merchant’s bottom line. While Mastercard assesses these fees to issuers and acquirers, the cost is invariably passed on to you.
Are Mastercard Chargeback Fees Refundable?
No. Even if you win a chargeback, the fee is not refundable.
Some banks offer a form of chargeback protection to merchants willing to opt into their various platforms. Others might even provide “chargeback insurance,” as they call it. However, these protections are not ubiquitous in their coverage. If a merchant is enrolled in chargeback protection, chargeback costs will still be accrued by the issuing bank, for which the merchant’s acquiring bank will assume responsibility. This way, the fee is still paid, and enrollment fees cover the merchant’s portion.
However, word to the wise: not every chargeback is eligible for chargeback protection.
Mastercard chargeback fees will still apply regardless of perceived liability or the outcome of any dispute. This means that the fee could still stand, even if the chargeback is proven invalid (i.e. a case of friendly fraud).
Have Other Questions?
Mastercard chargeback rules are complex, but you don’t have to become a financial scholar to translate their data.
Chargebacks911® is here to help.
Chargebacks911 offers more than a decade of leadership in the chargebacks and payments industry. We are uniquely placed to help you fight back against chargebacks and win. Contact us today for a free demo.
FAQs
What is the chargeback rate for Mastercard?
Merchants who accept Mastercard should maintain a chargeback rate below 1.5%. Merchants who exceed this threshold risk involuntary placement in the card network’s dispute monitoring program.
Is there a fee for chargebacks?
Yes. Chargeback fees range from $20 to $100 per filed transaction. Additional surcharges may be imposed upon merchants who receive an excessive number of chargebacks.
Who bears the cost of a chargeback?
Merchants bear the cost of chargebacks in the form of lost revenue, lost merchandise, and chargeback fees.
How do I avoid chargeback fees?
As a merchant, you can avoid chargeback fees by deploying fraud detection tools at checkout, prioritizing best-in-class customer service, minimizing billing and fulfillment errors, clarifying your return and exchange policy, and proactively issuing refunds to disgruntled customers to prevent disputes from being filed.
What is the 540 days chargeback rule for Mastercard?
Cardholders shall have no more than 540 days to file a Mastercard chargeback in situations where the cardholder encounters damaged, defective, missing, or non-delivery of goods.
