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The most important chargeback statistics and benchmarks for 2024

Post by dessie · July 17, 2024 · 6 min read
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The most important chargeback statistics and benchmarks for 2024

Chargebacks have become an increasingly significant challenge for ecommerce merchants in recent years. As online sales continue to grow, so does the risk of chargebacks, which can lead to substantial financial losses and damage to a merchant’s reputation. In 2024, it is crucial for ecommerce businesses to stay informed about the latest chargeback statistics to effectively manage and mitigate this issue.

Written with Claude 3.
Reviewed, revised and approved by Signifyd humans.

Chargeback growth and rates

Chargeback rates have been rising since 2016, with the average rate highly dependent on which merchant or what industry.

42% By 2026, the global volume of chargebacks will increase 42% from 2023 levels.
0.47% The average US chargeback rate for ecommerce merchants is 0.47% of transactions. Signifyd currently sees average US chargeback rates of 0.27% and UK rates of 0.23% for our customers.
0.52% The average UK chargeback rate for ecommerce merchants is .52% of transactions.
97% Of all chargebacks, 97% originated in the United States or Canada.

icon Global volume of chargebacks

42%
By 2026, the global volume of chargebacks will increase 42% from 2023 levels.

icon Average US chargeback rate

.47%
The average US chargeback rate for ecommerce merchants is 0.47% of transactions. Signifyd currently sees average US chargeback rates of 0.27% and UK rates of 0.23% for our customers.

iconAverage UK chargeback rate

.52%
The average UK chargeback rate for ecommerce merchants is .52% of transactions

icon Chargeback regions

97%
Of all chargebacks, 97% originated in the United States or Canada.

 

Financial impact of chargebacks

Chargebacks can have a substantial financial impact on merchants, with billions of dollars lost annually. The true cost of chargebacks extends beyond the initial transaction amount in fallout costs such as fees and other costs resulting from the chargebacks.

icon Cost of chargebacks

$40B
Chargebacks cost merchants an estimated $40 billion per year.

icon Estimated cost per $100

$207
Every $100 in chargebacks costs merchants $207.

icon Reduction in chargebacks

69.6%
Potential reduction in chargeback rates using a chargeback protection vendor.
$40B Chargebacks cost merchants an estimated $40 billion per year.
$207/100 Every $100 in chargebacks costs merchants $207 in total.
69.6% Potential reduction in chargeback rates using a chargeback protection vendor.

 

Rates of different kinds of chargebacks

Chargebacks can occur for various reasons. The most common ones include chargeback fraud (also known as friendly fraud), criminal fraud and merchant errors. Friendly fraud, in particular, accounts for a significant portion of all chargebacks and can be difficult to prevent.

icon Stolen credit card

30%
Stolen credit card fraud accounts for about 30% of chargebacks.

icon Chargebacks sources

60%-80%
Friendly fraud accounts for 60-80% of all chargebacks.

icon Merchant errors

20%-40%
Merchant errors lead to chargebacks in 20-40% of cases.

icon Credit card fraud

34%
Credit card fraud (unknown or fraudulent purchase) is responsible for 34% of chargebacks.

icon Convenience in chargebacks

81%
Of consumers, 81% admit to filing a chargeback out of convenience.

icon Repeating friendly fraud

40%
Of consumers who commit friendly fraud, 40% will do it again within 60 days.
30% Stolen credit card fraud accounts for about 30% of chargebacks.
60-80% Friendly fraud accounts for 60-80% of all chargebacks.
20-40% Merchant errors lead to chargebacks in 20-40% of cases.
34% Credit card fraud (unknown or fraudulent purchase) is responsible for 34% of chargebacks.
81% Of consumers, 81% admit to filing a chargeback out of convenience.
40% Of consumers who commit friendly fraud, 40% will do it again within 60 days.

Chargeback rates by industry

Chargeback rates can vary significantly by industry, with some sectors experiencing much higher rates than others. Higher-risk industries, such as travel and hospitality, have seen a notable increase in chargebacks in recent years. Across industries, Signifyd sees an average chargeback rate of 0.26%. Here are the average chargeback rates for various industries in our network*:
* Source: Signifyd data

icon Collectibles

0.71%
Chargebacks in this sector are at 0.71%, one of the highest rates among all categories.

0.71%

icon General merchandise

0.34%
With a 0.34% chargeback rate, this category includes a wide range of everyday products.

0.34%

icon Electronics

0.31%
Chargebacks here stand at 0.31%, reflecting issues often related to high-value items.

0.31%

icon Luxury goods

0.30%
At 0.30%, chargebacks in this sector are notable given the high cost of items.

0.30%

icon Home goods & decor

0.27%
This category sees a chargeback rate of 0.27%, affecting items for home improvement and decoration.

0.27%

icon Auto, parts & tires

0.22%
Chargebacks for auto parts and tires are at 0.22%, showing a moderate level of disputes.

0.22%

icon Beauty & cosmetics:

0.22%
Also at 0.22%, this rate indicates common issues with products in this sector.

0.22%

icon Fashion, apparel & luggage

0.18%
The chargeback rate here is 0.18%, involving various clothing and travel items.

0.18%

icon Consumer medical supplies & supplements

0.16%
At 0.16%, this rate reflects disputes in the health and wellness sector.

0.16%

icon Leisure & outdoor

0.15%
Chargebacks for recreational items are at 0.15%.

0.15%

icon Grocery & household goods

0.13%
This sector sees a lower rate of 0.13%, involving everyday consumables and household items.

0.13%

icon Business supplies

0.12%
Business-related supplies have a 0.12% chargeback rate, indicating fewer disputes.

0.12%

icon Alcohol, tobacco & cannabis

0.10%
The lowest rate at 0.10% suggests minimal chargebacks in these regulated industries.

0.10%

iconTravel and hospitality

30%
the travel and hospitality industry has been seeing a 30% year-over-year increase in chargebacks.

0.30%

Chargeback prevention and disputes

Merchants can and should take various steps to prevent chargebacks and successfully dispute invalid claims. Implementing fraud detection tools and actively fighting invalid chargebacks can significantly reduce the impact of chargebacks on a business.

icon Chargeback win rate

32%
The chargeback win rate average was 32% in 2021. Signifyd’s average chargeback win rate is 38% in 2024, year to date.

icon VDMP maximum chargeback ratio

0.9%
Visa Dispute Monitoring Program (VDMP) maximum chargeback ratio

icon Visa chargeback time limit

120
Visa merchants have 120 days to dispute a chargeback.

False declines

False declines, which occur when legitimate transactions are incorrectly flagged as fraudulent, can also have a significant impact on merchants’ revenue.

icon False declines financial impact

157B
U.S. firms are projected to lose $157 billion due to false declines in 2023.

icon False declines customer impact

27%
When purchases are declined, 27% of customers never return to the merchant who declined them.

Run your own numbers

As ecommerce continues to grow, chargeback management will remain a critical aspect of running a successful online business in 2024. By staying informed about the latest chargeback statistics, implementing effective prevention strategies, and actively disputing invalid chargebacks, merchants can minimize the financial impact of chargebacks and protect their bottom line. Proactive chargeback management is essential for ecommerce success in the ever-evolving digital landscape.

Did you know that Signifyd can help you understand how your chargeback rates compare to other merchants like you? Reach out for a custom briefing.

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