Avia Chen
Co-Founder, Marketing & Product
Table of contents

Whether you're an eCommerce merchant striving to stay ahead, an enthusiast captivated by online transactions, or simply curious about the mysteries of chargebacks, we invite you to dive into some of the data we collected in 2023..

What will we discuss?

Chargeback Segmentation: We break down true fraud vs. friendly fraud.

  • Win Rate Analysis: Analyze the win rates per industry.
  • Transaction Amounts: Understand win rates based primarily on transaction volume.
  • Monthly Insights: Discover trends for the months.
  • Resolution Velocity Data: Insights into resolving chargebacks.
  • Reason Codes Deep-Dive: A detailed exploration of chargeback reasons.

The insights we’re about to uncover aren't based on guesswork; they're rooted in real data. We've meticulously gathered and analyzed this data using raw data sourced from thousands of Chargeflow's customers. This approach ensures that the insights you'll receive are not only precise but also incredibly valuable.

The eCommerce Landscape we saw in 2023

According to Mastercard, global chargeback transaction volumes are expected to reach a staggering 337 million by 2026, marking a 42% increase from current levels. Furthermore, projections suggest that chargebacks will cost the payments industry over $1 billion in 2023 alone. These mounting challenges require strategic responses.

Deciphering Chargebacks: True Fraud Vs. Friendly Fraud

True fraud involves unauthorized transactions, often originating from identity or credit card theft. On the flip side, friendly fraud occurs when consumers dispute charges without a valid reason, often due to misunderstandings or unintentional misuse of the chargeback process.

Key Insights:

The prevalence of friendly fraud accounts for a substantial 79.03% of all chargebacks. This staggering figure underscores the fact that the majority of chargebacks are related to customer-initiated disputes. As such, merchants must prioritize strategies aimed at countering friendly fraud.

Turning to win rates, merchants achieve 43.82% for friendly fraud cases, but 56.18% still leads to revenue losses. This underscores the need to improve win rates when dealing with erroneous claims. In contrast, only 9.27% of true fraud cases end in wins, indicating effective financial recourse for affected customers. However, with nearly one-tenth of total true fraud cases suggesting unique scenarios for representment, prevention remains key before transactions occur, rather than shifting fraud losses onto consumers.

Navigating Win Rates by Sector

Every sector of e-commerce has its unique challenges. We explore industry-specific win rates, effective fraud prevention, and chargeback management, providing tailored strategies:

Consumer Electronics (16.59% Win Rate): When it comes to high-value, mobile items, the consumer electronics industry needs enhanced security measures, and robust customer verification processes are required to minimize chargebacks.

Travel (30.47% Win Rate): In the travel industry, focusing on customer-friendly policies and offering flexible booking options is essential to reduce chargebacks in this complex sector.

Apparel (35.81% Win Rate): Addressing sizing and quality issues is key for apparel businesses. Enhance win rates by improving accurate product descriptions and streamlining the return process.

Health (29.17% Win Rate): Product-related disputes are common in the health sector. Prioritize communication options and post-sale support to manage these issues effectively.


  • Analyze industry-specific data.
  • Learn from top performers.
  • Develop tailored strategies.
  • Benchmark your performance.
  • Prioritize prevention through communication and education.

Win Rate By Transaction Value

As we continue, it's essential to consider the impact of transaction value on win rates. We've noticed a clear pattern: higher transaction values tend to correlate with lower win rates. For instance, transactions up to $49.99 exhibit relatively high win rates, with 46.85% for $0 to $29.99 and 45.42% for $30 to $49.99. However, as transaction values increase, win rates gradually decrease, reaching 44.74% for the $50 to $99.99 category and further dropping to 37.75% for the $100 to $299.99 category. The most significant drop occurs in transactions over $300, with a win rate of just 27.64%. 

This trend highlights the importance of tailored dispute strategies based on transaction value, particularly for higher-value transactions.

Navigating Dispute Seasons

We’ve uncovered fluctuations in dispute counts, revealing intriguing patterns. During July, August, and December, we see a surge in disputes. These peak periods align with heightened transaction volumes during festive shopping seasons. However,, February and March usher in a quieter time for disputes, reflecting a post-holiday lull in consumer spending. These insights guide savvy merchants to anticipate these seasonal trends, utilizing holiday refund policies with more flexibility and strategically allocating resources during peak periods, bolstering inventory, and optimizing supply chain routes. 

Resolution Velocity Data: The Need for Speed

Delving deeper into the resolution process, we find that disputes take approximately 46 days to resolve. Some complex cases even test the patience of merchants, extending up to 100 days. We've observed key resolution time outcomes, and here’s what we found. Won chargebacks typically require around 50 days to resolve, emphasizing the need for meticulous investigation. In contrast, lost chargebacks and inquiries, usually stem from less intricate issues. These insights encourage merchants to consider industry-specific resolution timelines, where sectors like Travel may encounter longer resolution times due to their intricate service offerings, while industries like Apparel have shorter dispute resolution timelines, likely because they deal with tangible products.

Cracking the Code: Reason Code Analysis

This brings us to reason code usage across various industries. Here, we also uncover unique challenges that each sector faces:

In the world of Apparel, we witness significant chargeback hurdles, with ‘Not Received’, ‘Not as Described’, and ‘Fraud’ being the prominent culprits. Many customers may experience buyer’s remorse with clothing items, which may account for the high number of “Not as Described” chargebacks. What’s striking is that 38% of fashion retailers have grappled with the rise of friendly fraud.

Transitioning to the Beauty and Fitness sector, we find that ‘Fraud’ takes center stage, constituting 30.06% of chargebacks, closely followed by ‘Not as Described’ at 22.68%. These challenges stem from the online sale of diverse beauty and fitness products, occasionally resulting in disputes over product quality or description. 

Furthermore, the sector faces fraud-related chargebacks, particularly when unauthorized transactions occur. Fraudsters often target the industry for specific types of products or services, adding to the complexity of chargeback management. These insights emphasize the necessity for tailored strategies to combat both fraud-related and product description issues in the Beauty & Fitness sector.

In the Computers and Toys & Hobbies sectors, 'Not as Described' chargebacks dominate, representing 50.50% and 43.11%, respectively. These industries, dealing with electronics and hobby-related products, are particularly vulnerable to chargebacks when there are discrepancies between customer expectations and received items. This situation is exacerbated by the presence of high-value transactions, as customers may resort to chargebacks to recover potential losses and express their dissatisfaction.

Meanwhile, the Food & Beverage industry grapples with a distinct challenge, where ‘Fraud’ makes up a staggering 78.91% of chargebacks. This is driven by the perishable nature of goods and the increased prevalence of Account Takeovers (ATO) in recent years, with a 71% rise in 2022 and a staggering 485$ year-over-year increase in ATOs in 2023. 

In various sectors, including apparel and food & beverage, robust fraud prevention and clear product descriptions are crucial for reducing chargebacks. Prioritizing refunds over chargebacks is cost-effective and enhances customer satisfaction while providing post-sale support and clear communication channels is vital for managing chargeback risks effectively.

Navigating Chargeback Schemes & Rates

When it comes to customer payment preferences, Visa reigns supreme. With 61.49% of customers favoring it, this dominance often leads to more chargebacks for merchants. On the flip side, Mastercard users (29.06% of customers) tend to result in smoother transactions with fewer disputes. 

The rise of Buy Now, Pay Later (BNPL) services introduces new players, with PayPal leading at 56.39% preference among customers, closely followed by Klarna at 43.61%. These choices reflect varying customer needs and expectations. 

For eCommerce, Visa’s popularity means more customers but also a higher likelihood of chargebacks. American Express and Discover, favored by fewer customers, typically result in fewer chargebacks. 

It’s crucial to navigate Visa’s unique position in the credit card processing field and its stringent rules, enforced through its Dispute Monitoring Program. Merchants should adapt their dispute-resolution strategies accordingly. 

Merchants can mitigate chargeback risks by integrating various BNPL providers like Adyen and Afterpay to cater to diverse customer preferences. 

In summary, understanding payment method dynamics and BNPL services can help merchants optimize transactions, manage chargeback effectively, and identify growth opportunities. 

Summed Up

Chargeflow’s 2024 State of Chargeback Reports equips you with a wealth of insights and essential strategies for eCommerce merchants. As the chargeback landscape continues to grow and evolve, businesses must keep up to date as well as adapt their strategies accordingly. Implementing data-driven, industry-specific, and customer-centric approaches ensures eCommerce merchants are better protected against chargebacks and helps ensure the health and prosperity of your online retail operations. 

Are you ready to take control of your chargeback process and protect your eCommerce business? Chargeflow has your back, explore our chargeback management tools and services today to safeguard your revenue and improve your customer experience. If you don’t already have an account with Chargeflow feel free to try us out

Interested in diving deeper into the Chargeflow 2024 State of Chargebacks Report and gaining even more insights? You can catch the full report as well as in-depth analysis here, and start tackling chargeback challenges effectively.

Download the full report now


Average Dispute Amount
Average Dispute Amount
# Disputes Per Month
# Disputes Per Month
Time Spent Per Dispute
Time Spent Per Dispute
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