What is a Chargeback Ratio?
A Chargeback Ratio is a monthly percentage calculation derived from dividing the total revenue reversed by chargebacks into the total revenue processed. So, if you processed $1,000 of volume in one month, but $100 was reversed by chargebacks, your chargeback ratio for that month would be 10%. And this would be unacceptable. Generally, the credit card issuers will provide written warning to a merchant account holder if the chargeback ratio tops 1% in a given month, and if the problem persists for several months the merchant is at risk of losing their account.
