GITNUX MARKETDATA REPORT 2024

Chargeback Statistics: Market Report & Data

Highlights: The Most Important Chargeback Statistics

  • E-commerce industries saw an increase of 25% in chargebacks in 2020.
  • The average dollar amount per fraudulent transaction is $155, a 34% increase in 2020 compared to 2019.
  • 86% of all chargebacks are probable cases of friendly fraud.
  • It is expected that businesses will lose $25 billion to friendly fraud by the end of 2024.
  • Businesses typically lose $3.94 for every $1 stolen by fraudsters through chargebacks.
  • Roughly 58% of cardholders would first file a chargeback without contacting the merchant.
  • Every dollar disputed in the first half of 2020, merchants lost $3.36 to related costs.
  • Chargebacks for services were 25% higher in 2020 than in 2019.
  • The United States is the world leader in chargebacks, with 39% of all global post-transaction fraud.
  • There is an average of 615 chargebacks per month in the United Kingdom.
  • Online retailers in general experience a chargeback rate of about 0.6%.
  • Digital goods experienced the highest chargeback rates, ranking at 2.5%.
  • The average number of chargebacks per customer in the U.S. is 0.28.
  • Fraudulent chargeback rates in 2020 were more than double what they were in 2017.
  • Every 1.5 hours, a chargeback occurs in the online gaming industry.
  • Subscription businesses experienced a 22% hike in chargebacks in April 2020 amid the COVID-19 pandemic.
  • Chargeback representment win rates range from 12% to 60% across industries.
  • Approximately 45% of consumers who file a fraudulent chargeback will do so again within 90 days.

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The financial industry acknowledges chargebacks as an unavoidable cost of doing business. However, a deeper understanding of chargeback statistics can illuminate trends, manifest causes, and aid businesses in developing better strategies to mitigate this issue. In this blog post, we will delve into some astonishing numbers surrounding chargeback metrics across various sectors and regions. Our aim is to empower business owners, finance professionals, and consumers alike with key insights backed by hard data, thereby fostering a safer and more transparent transaction ecosystem.

The Latest Chargeback Statistics Unveiled

E-commerce industries saw an increase of 25% in chargebacks in 2020.

Unveiling a remarkable shift in the e-commerce landscape, the statistics highlighting a 25% uptick in chargebacks during 2020 turbocharges our understanding of evolving consumer behavior and its implications on an industry dwarfed by both opportunities and challenges. This surge hints at the increased instances of customer disputes, amplifying the urgency for adaptive fraud prevention measures while also spotlighting the pressing need for robust customer service mechanisms. By weaving this narrative within a blog post about Chargeback Statistics, we are empowering e-commerce players with actionable insights to brave the tides and navigate the future of this intensifying digital realm.

The average dollar amount per fraudulent transaction is $155, a 34% increase in 2020 compared to 2019.

The sharp rise, by 34%, in the average dollar amount per fraudulent transaction in 2020 ($155) as compared to 2019, paints a telling picture in the milieu of Chargeback Statistics. In a blog post that dissects these numbers, it highlights an evolving status quo in the landscape of financial fraud where not only are the number of fraudulent cases snowballing, but their monetary value is climbing up too. Such patterns potentially present grim outlooks to the affected merchants as they grapple with more substantial losses, making it a critical stat to factor into their preventative strategies.

86% of all chargebacks are probable cases of friendly fraud.

Unpacking the surprising revelation that a whopping 86% of all chargebacks might just be instances of friendly fraud offers a fresh perspective on the real challenge e-commerce businesses face. Rather than external threats, it throws a spotlight on the internal audience – trusted customers manipulating the chargeback process to their advantage. Businesses are not just battling faceless cybercriminals but are unexpectedly engaged in a delicate tug-of-war with their own clientele. This counterintuitive trend certainly compels businesses to rethink their strategies, fortify their systems, tighten their policies, and revamp their customer service approach. It underlines the need for continuous monitoring, quick but verified transactions, and fostering a climate of mutual trust in online transactions.

It is expected that businesses will lose $25 billion to friendly fraud by the end of 2024.

In the vibrant yet unrelenting jungle of e-commerce, insights such as ‘businesses are projected to lose $25 billion to friendly fraud by 2024’ play a crucial navigational role. Painted against the backdrop of a blog post about Chargeback Statistics, this figure elevates our understanding of the menacing specter of friendly fraud and its insidious impact on the financial health of businesses. Like a guiding star, it underscores the need for fortified defenses, stronger risk management strategies, and points to a colossal revenue drain, thus shedding light on the growth-stalling obstacles businesses need to surmount to successfully navigate this evolving landscape.

Businesses typically lose $3.94 for every $1 stolen by fraudsters through chargebacks.

Imagine walking past a dollar on a sidewalk, only to realize that picking it up costs you almost four times its worth. This is exactly the predicament faced by businesses grappling with fraudulent chargebacks. As highlighted in the statistic, a chargeback fraud does not simply mean losing the stolen dollar but also shelling out an additional $3.94. This unconventional cost—an amalgamation of chargeback fees, lost goods, and wasted management time – amplifies the heft of the financial loss borne by businesses. In a blog post on chargeback statistics, this statistic is paramount. It underscores the acute necessity for robust fraud prevention tools and strategies to safeguard not just profits, but also the very sustainability of businesses.

Roughly 58% of cardholders would first file a chargeback without contacting the merchant.

Unveiling a significant trend concerning consumer habits, the finding that approximately 58% of cardholders would initiate a chargeback without first reaching out to the merchant presents a key focus in discussions on chargeback statistics. This figure underscores the pressing need for more efficient communication channels and dispute resolution procedures for merchants, drawing attention to an often overlooked sphere where they can enhance customer satisfaction. By addressing this aspect, merchants not only have an opportunity to mitigate financial losses associated with chargebacks, but also nurture improved relationships with their consumers for future business interactions.

Every dollar disputed in the first half of 2020, merchants lost $3.36 to related costs.

Unveiling a substantial pressure on merchants, this statistic underscores an alarming reality. For every dollar disputed in the first half of 2020, merchants had to part with $3.36 related to costs. This not only highlights the financial burden that chargebacks ensue but also calls for immediate attention to mitigating strategies. Losing over three-fold the disputed amount unveils an ominous ripple effect that could potentially strain business operations, shake investor confidence, and tarnish brand reputation. In the comprehensive exploration of chargeback statistics, this figure stands as a stern reminder of the unremitting need to craft sound, preventative measures that could save both money and reputation.

Chargebacks for services were 25% higher in 2020 than in 2019.

Highlighting a dramatic rise of 25% in chargebacks for services from 2019 to 2020 underscores an evolving financial landscape impacted by new factors, likely including the COVID-19 pandemic. In the realm of chargeback statistics, the sudden spike signals an important trend for businesses to scrutinize. It suggests a need for more vigilant financial management, better customer service, and possible alterations in sales policies. It also provides those reading the blog with valuable insight, and encourages deeper understanding and analysis of the underlying reasons and potential solutions.

The United States is the world leader in chargebacks, with 39% of all global post-transaction fraud.

As we journey through the intricacies of chargeback statistics, the fact that the United States takes the cake with a whopping 39% of all global post-transaction fraud is remarkable. This piece of data brings to light the magnitude of the chargeback issue on American soil, serving as a stark reminder of the urgency to implement robust fraud detection systems. Navigating this inescapable terrain of chargebacks, this statistic provides invaluable insights to stakeholders, influencing tactical planning and strategies for businesses across the globe. With the States leading the pack, addressing this problem becomes a top priority in order to reshape commerce dynamics and set benchmarks for a secure trading environment.

There is an average of 615 chargebacks per month in the United Kingdom.

Underpinning the narrative of the growing challenge of chargebacks for businesses, especially in online transactions, the statistic of 615 average chargebacks per month in the United Kingdom serves as a critical barometer. It not only highlights the frequency of instances where customers dispute a transaction, thereby potentially affecting a company’s reputation and bottom line adversely, but it also underscores the urgency for businesses to strengthen their payment processing systems, improve customer service, and enhance fraud detection measures. Hence, this number is a significant signal for businesses, financial institutions, policy-makers, and customers alike to pay closer attention to this issue.

Online retailers in general experience a chargeback rate of about 0.6%.

In the buzzing digital marketplace, the seemingly insignificant figure of 0.6% chargeback rate for online retailers is nothing short of a Pandora’s Box. This tiny percentage, when extrapolated to the massive volumes of transactions, balloons into a significant monetary loss impacting profitability. In a blog post dissecting chargeback statistics, this vital metric serves as a heart of understanding the financial tribulations faced in the ecommerce landscape. It underscores the reality of fraud risks, the necessity for comprehensive fraud-detection infrastructure, and continuous review of payment procedures. In essence, this 0.6% isn’t just a statistic, it’s a clarion call for online retailers to fortify their risk management strategies.

Digital goods experienced the highest chargeback rates, ranking at 2.5%.

Illuminating a key trend within the realm of Chargeback Statistics, we find how digital goods have outpaced other sectors, posting an eyebrow-raising chargeback rate of 2.5%. This revelation solidifies the unique challenges associated with the digital goods industry, where high volumes and instant accessibility can often lead to a surge in fraudulent activities or disputes. Therefore, businesses operating within this sphere need to invest more in protection measures, potentially altering the current industry landscape, and reshaping strategies on mitigating financial loss. A fact so pivotal, it undeniably enriches our understanding of the dynamic nature of chargeback scenarios.

The average number of chargebacks per customer in the U.S. is 0.28.

Imagine you’re navigating the dynamic waters of the American consumer experience. A statistic like ‘The average number of chargebacks per U.S. customer is 0.28’ becomes a heavenly lighthouse. It offers key insights into the pervasiveness of chargebacks, hinting at a potential problem within the retail or service realm that warrants further scrutiny. This pivotal number identifies the need for businesses to reassess their service quality, disputes management, transaction processes, and even customer relationship strategy. Ultimately, it’s a guiding star leading towards improved customer satisfaction, minimized financial losses, and robust growth in the commercial landscape.

Fraudulent chargeback rates in 2020 were more than double what they were in 2017.

Highlighting a sharp increase in fraudulent chargeback rates from 2017 to 2020 serves as a wake-up call for e-commerce businesses. The statistic underscores the evolving nature and severity of chargeback fraudsters’ threats, providing invaluable insight for a blog post exploring chargeback statistics. This potent illustration of the reality serves as a driving force for decision-makers to invest in advanced fraud detection tools and concretize chargeback mitigation strategies. Essentially, by acknowledging this growing security crisis, retail and service providers can more effectively protect their financial resources against fraud, thus fostering their business sustainability.

Every 1.5 hours, a chargeback occurs in the online gaming industry.

Drawing attention to one, often overlooked, facet of the online gaming industry – chargebacks – is critical in highlighting industry trends and challenges. The statistic that a chargeback occurs every 1.5 hours underscores the magnitude of financial threat facing this booming sector. Not merely a nuisance, these chargebacks represent an ongoing leak in the revenue pipeline, substantiating the long-term financial implications for gaming companies. Therefore, understanding this figure is paramount not just for game developers and digital entrepreneurs, but for anyone interested in the economic health and sustainability of the online gaming industry.

Subscription businesses experienced a 22% hike in chargebacks in April 2020 amid the COVID-19 pandemic.

Underlining a compelling trend in the arena of global trade, subscription businesses witnessed a sharp 22% surge in chargebacks during April 2020; a time when the shadow of COVID-19 loomed large. This development punctuates a heightened risk and challenge for such businesses, impacting their bottom-lines significantly. Explicating chargeback dynamics within the subscription service ecosystem, this statistic serves as a potent testament to the vulnerability of revenue and cash flow in such companies in response to global crises, thereby making it a crucial data point to consider in a blog post relating to chargeback statistics.

Chargeback representment win rates range from 12% to 60% across industries.

Diving into the world of chargeback statistics, the panorama offers a gripping revelation – industries worldwide grapple with chargeback representment win rates fluctuating between a low of 12% to an impressive high of 60%. This notable sprout of data is critical terrain for businesses as it unveils their potential to reclaim lost revenue through disputed transactions. It also exposes the stark reality of differing success rates across various sectors, reflecting the uneven battleground that businesses must navigate in the chargeback representment arena. Hence, this statistic is a vital pulse, guiding strategies to maximize win rates, reducing the financial drain, and illuminating the industry-specific hurdles faced in the journey of chargeback dispute resolution.

Approximately 45% of consumers who file a fraudulent chargeback will do so again within 90 days.

Illuminating a striking detail within the realm of chargeback statistics, the figure that nearly half of consumers who initiate a fraudulent chargeback will repeat this action within a trimester provides key insight for business owners. This intriguing statistic underscores the habitual nature of fraudulent chargebacks, revealing a significant realm of risk that businesses must account for. With this data, businesses can refine their risk management strategies, increase their focus on consumer behavior analysis and invest in fraud prevention measures, so they’re not caught off guard by repeated actions. So, this titbit isn’t just a number, it’s a valuable roadmap for strategic planning and resource allocation to combat potential recurring losses.

Conclusion

The study of chargeback statistics provides profound insights into the financial patterns, consumer behavior, and merchant practices. While a high chargeback rate paints a daunting picture for businesses due to financial losses and damaged relationships with banks, it signals the urgent need for enhanced security measures, comprehensive dispute management systems, and improved customer service. As chargebacks continue to represent a significant concern in the fast-paced eCommerce environment, these statistics ultimately serve as a robust tool in developing strategies that promote satisfactory, secure, and seamless transactions for both businesses and consumers alike.

References

0. – https://www.www.cybersource.com

1. – https://www.chargeback.com

2. – https://www.www.pymnts.com

3. – https://www.www.worldpay.com

4. – https://www.www.lexisnexisrisk.co.uk

5. – https://www.chargebacks911.com

6. – https://www.www.practicalecommerce.com

FAQs

What is a chargeback in the context of banking and finance?

A chargeback is a return of funds to a consumer, mainly used in credit card companies when a customer disputes a transaction. The merchant's bank is obliged to return the money to the customer's credit card issuer, who then credits the customer's account.

What can cause a chargeback?

Chargebacks can occur due to various reasons, including fraudulent transactions, disputes over the product or service quality, processing errors, expired authorization, and non-fulfillment of copy requests.

Who handles the chargeback process, and how long does it usually take?

The chargeback process is typically handled by the card issuer, the acquiring bank, and the merchant. The process can take from 6 weeks up to 6 months, depending on the reason for the dispute and the complexity of the case.

How does a chargeback affect a merchant?

A chargeback can have negative financial effects on a merchant, as they lose the sales revenue, the product or service sold, plus any shipping costs. Also, they incur operational costs associated with managing the chargeback process, and potentially penalty charges. If a merchant has excessive chargebacks, they may face higher transaction fees or lose their ability to accept certain credit cards.

Can a chargeback be disputed by a merchant?

Yes, a merchant can dispute a chargeback if they believe the transaction was valid or if they can provide evidence that resolves the reason for the chargeback. The process involves compiling information relating to the transaction and submitting it to the acquiring bank, who will then review the dispute and make a decision.

How we write our statistic reports:

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly.

See our Editorial Process.

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