Chargeback ratio: how Visa and Mastercard calculate it, the 2026 thresholds and what to watch every week

Your chargeback ratio is the number of disputes you receive in a month divided by the number of card transactions, and each card network counts it its own way. Visa adds fraud reports to disputes and divides by the same month's card-not-present sales. Mastercard divides this month's chargebacks by last month's sales. Processors and acquirers work to stricter limits of their own.

What is a chargeback ratio?

A chargeback happens when a cardholder asks their bank to reverse a payment and the bank pulls the money back from you. Visa calls it a dispute and Mastercard a chargeback; the words are interchangeable. Your chargeback ratio, or dispute ratio, compares how many of these you receive with how many card payments you take. The card networks use it to decide which merchants to watch, and processors use it to decide which merchants to keep.

Three rules sit under every version of the ratio, and each one surprises sellers:

• Every dispute counts, whatever the reason. For the monitoring programs, a dispute is money leaving your account because of a disputed payment, regardless of why (Stripe's guide to the programs).
• Winning doesn't help the ratio. The programs ignore outcomes. They care about how well you prevent disputes, not how many you win.
• Refunds don't erase anything after the fact. The programs ignore refunds when they count disputes, and refunding an order after the bank has reported it as fraud leaves the report in place.

Each network counts only its own cards, so your Visa ratio and your Mastercard ratio are two separate numbers.

How do you calculate your chargeback ratio?

The basic formula is disputes received in the month ÷ card transactions in the month, worked out for each network. Two details change the answer.

First, a dispute belongs to the month the network receives it, not the month of the order. Cardholders typically have 120 days to dispute a card payment, and longer in some cases (Stripe), so one month of sales keeps adding disputes for about four months.

Second, your processor may show you two different numbers. Stripe's dashboard, for example, shows dispute activity, which counts disputes by the date they arrive, and dispute rate, which counts them by the date of the original payment. The networks' programs use dispute activity. In Stripe's own example, a week with 1,000 payments and 10 disputes, only 3 of them on that week's payments, shows 1% activity and a 0.3% dispute rate (Stripe on measuring disputes). Use activity to see where you stand with the networks. Use the rate by order date to find which week's ads, offer or shipping problem caused the disputes.

A worked example for Visa. In October a supplement store settles 2,500 Visa card-not-present transactions. It receives 12 disputes and 8 fraud reports, and 4 of those reports are on orders that were also disputed. Visa counts 12 + 8 = 20, so the ratio is 20 ÷ 2,500 = 0.80%. The disputes alone would suggest 0.48%. Try your own month below; for Visa, enter disputes plus fraud reports:

Calculator

Dispute ratio calculator

Card disputes (chargebacks) against card transactions in the same month.

Card transactions this monthDisputes this month

Dispute ratio

0.80%

Disputes per 1,000 transactions

8

Card networks and processors each count disputes their own way and set their own limits — your processor’s dashboard is the number that counts for your account.

Reset to the example

How does Visa's VAMP ratio work?

Visa monitors card fraud and disputes through the Visa Acquirer Monitoring Program (VAMP). It took effect on April 1, 2025 and consolidated Visa's earlier fraud and dispute programs, including the Visa Dispute Monitoring Program (VDMP) and the Visa Fraud Monitoring Program (VFMP) (Visa). An article that still quotes VDMP limits is out of date.

Visa's fact sheet gives the formula: VAMP ratio = (fraud reports, TC40 + disputes, TC15) ÷ settled transactions, TC05 (Visa VAMP fact sheet). In plain terms:

• TC40 reports are fraud reports from the cardholder's bank. Processors often call them early fraud warnings. They count even when no dispute follows, and test payments that get through during a card-testing attack can produce them.
• TC15 is the dispute itself. When the same order appears in both reports, it is counted twice (Stripe).
• The bottom of the fraction is card-not-present sales, domestic and cross-border: in practice, all your online orders.
• Both counts come from the same calendar month.
• Two things are left out: disputes resolved through pre-dispute services such as Rapid Dispute Resolution, and fraud reports that qualified for Compelling Evidence 3.0.

A merchant is "excessive" only when the ratio and a minimum count are both reached. In the US, Canada, the EU and Asia Pacific, the ratio dropped from 2.2% to 1.5% on April 1, 2026, with at least 1,500 fraud reports and disputes in the month. Latin America uses 1.5% and 1,500. Central and Eastern Europe, the Middle East and Africa keep 2.2%, with at least 150 reports and disputes worth $75,000 or more. The acquirers, the banks behind your processor, are judged on their whole portfolio at 0.5% ("above standard") and 0.7% ("excessive"). Stripe's documentation also lists a merchant "non-compliant" level of 0.5% with as few as 5 fraud reports and disputes, at which Visa may assess fees.

Here is how the program reached its current shape:

How Visa's dispute monitoring changed

1. Aug 2024Visa announces the evolved VAMPSeveral fraud and dispute programs are to become one acquirer program.
2. Apr 1, 2025VAMP takes effectIt replaces earlier programs, including VDMP and VFMP. A six-month advisory period begins.
3. Sep 30, 2025Advisory period endsEnforcement follows.
4. Apr 1, 2026Merchant threshold drops to 1.5%From 2.2% in the US, Canada, the EU and Asia Pacific, still with at least 1,500 fraud reports and disputes a month.
5. Oct 2026MERP starts in Asia PacificA Visa program aimed at newer merchants. Visa does not publish its thresholds.

What are Mastercard's excessive chargeback thresholds?

Mastercard runs the Excessive Chargeback Program (ECP). Its rate divides the chargebacks raised this month by the payments captured in the previous month. The figures below are Mastercard's rules as summarized in Stripe's documentation:

You enter when both the count and the rate are met, and you leave after three consecutive months below the threshold. Mastercard counts a chargeback even if you refunded the order, the payment had 3D Secure liability shift, or you won the case. A separate Excessive Fraud Merchant program targets online stores with at least 1,000 e-commerce Mastercard payments whose fraud chargebacks pass 0.50% and $50,000 in a month while 3D Secure covers 10% of payments or fewer (50% in regulated countries).

The previous-month rule moves the number whenever your volume moves. Say the store captured 1,400 Mastercard payments in September and 1,750 in October, after scaling its ads, and received 15 chargebacks in October. Mastercard's rate is 15 ÷ 1,400 = 1.07%. Measured against October's own sales, it would look like 0.86%. Run it the other way and you see the trap: when you cut spend after a bad month, the late disputes from the bigger month keep arriving while the sales count shrinks. Visa's ratio jumps in the month of the cut and Mastercard's in the month after. Plan for that peak instead of being surprised by it.

What you must never do is fix the denominator. Presenting transactions to your acquirer that aren't genuine sales between you and a real cardholder is what Mastercard calls laundering, one of the reasons a merchant can be put on the MATCH list (Stripe).

Why do Visa and Mastercard show different chargeback ratios?

Put both networks' rules on the example store and the same October produces four different numbers:

One October, four chargeback ratios

Illustrative store

Visa VAMP ratio12 disputes + 8 fraud reports ÷ 2,500 October sales0.80%

Visa, disputes onlywhat you see if you ignore fraud reports0.48%

Mastercard ECP rate15 October chargebacks ÷ 1,400 September sales1.07%

Mastercard, same-month math15 ÷ 1,750 October sales, which is not what Mastercard uses0.86%

None of them is "the" ratio. Each network enforces its own formula, so track each one the way that network computes it. Don't blend Visa and Mastercard into one store-wide figure either: a blended ratio can hide one network running hot while the other looks calm.

What chargeback ratio is too high?

No single number is safe, because several limits apply to you at once. These are the published ones:

Published limits: a ratio and a count

1.5% + 1,500Visa VAMP "excessive" merchant in the US, Canada, the EU and Asia Pacific since April 1, 2026: ratio and monthly fraud reports plus disputesVisa VAMP fact sheet

0.5% + 5The Visa "non-compliant" level listed by Stripe, where Visa may assess feesStripe

1.5% + 100Mastercard Excessive Chargeback Merchant: rate and monthly chargebacks, per StripeStripe

1% + $5,000MATCH reason code 04 after a termination: one month of Mastercard chargebacks, no minimum countStripe

Read the minimum counts before the percentages. A store with 2,500 Visa sales a month is nowhere near Visa's 1,500-report minimum, and one with 15 chargebacks is far from Mastercard's 100. That doesn't make it safe. Stripe's documentation says the industry standard treats dispute activity above 0.75% as excessive, and that a sudden spike or a steep upward trend can trigger action before that line (Stripe). Acquirers answer to Visa for their whole portfolio at 0.5% and 0.7%, so a merchant running above that range pulls their numbers the wrong way, whatever its own count. And the MATCH rule for excessive chargebacks has no minimum count at all.

A workable rule for planning: keep every network under 0.5%, investigate anything above it within the week, and treat 0.75% as an emergency. These are planning lines, not limits anyone promised you. Your processor's agreement sets the limit that counts for your account.

What happens when your chargeback ratio is too high?

The consequences escalate, roughly in this order:

1. Your processor steps in. Stripe, for example, can work with you on a remediation plan and may require the steps you're taking and a timeline. Dispute and refund rates are also among the factors behind a reserve, which holds back part of your payouts (Stripe on reserves).
2. The network enrolls you in a program. That means monthly fines that grow, as in Mastercard's table above, and Visa assesses fees above its excessive level.
3. Payments can stop. Stripe warns that missing a program's requirements in time can lead the network to refuse further payments to you.
4. Termination and MATCH. When an acquirer closes an account, it must check the merchant against Mastercard's criteria. Monthly Mastercard chargebacks above 1% of sales transactions and totaling $5,000 or more qualify for reason code 04, with no minimum count. In Stripe's example, 125 transactions and 6 chargebacks worth $6,250 in one month, a 4.8% ratio, is enough (Stripe).

The database is now called Mastercard Alert To Control High-risk Merchants (MATCH) Pro, and its listings are deleted after five years (Mastercard). A listing names the principal owners as well as the business, winning the chargebacks later doesn't change it, and Stripe says most processors reject listed businesses and owners. Visa keeps a similar file, VMSS, also for five years. What a listing means for getting and keeping an account is covered in high-risk merchant accounts.

How to monitor your chargeback ratio every week

Monthly numbers arrive too late to act on. A weekly routine catches a problem while it is still one ad set or one shipping delay:

• Pull disputes and fraud warnings by network. For Visa, count both. Stripe users can see Visa's figures and Stripe's daily estimates per statement descriptor in the VAMP dashboard.
• Read the last 30 days, not just the month to date. Early in a month the month-to-date ratio runs high, because disputes from last month's sales keep landing while this month's sales count is still small.
• Group disputes by order week and by reason. A cluster from one week points at an ad, an offer change or a shipping delay. Fraud concentrated in one country points at an attack.
• Mind the reporting lag. For US accounts, Stripe suggests counting payments for a calendar month and disputes from the 5th of that month to the 5th of the next, to match what the networks see.
• Keep one statement descriptor prefix. Visa identifies a monitored account by the fixed part of your descriptor plus the acquiring bank, so one prefix gives you one honest number. The billing descriptor guide shows how to set it.

Tick these off every Monday:

The weekly chargeback-ratio check

• Disputes and fraud warnings pulled for Visa and Mastercard separately
• Visa ratio: disputes plus fraud reports over this month's online sales
• Mastercard ratio: this month's chargebacks over last month's sales
• Last 30 days compared with the same period a month earlier
• Disputes grouped by order week, reason, campaign and country
• Fraud warnings on unshipped orders reviewed before anything ships
• Anything above 0.5% on either network has an owner and a fix date

0 of 7 done

When a number rises, the fix sits upstream of payments: the descriptor buyers don't recognize, the subscription term they missed, the parcel that never arrived. Each cause has its own fix, and a refund given quickly under an honest money-back guarantee costs less than the dispute it replaces.