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Metrics type: Supporting Metrics • Category: Payment Gateway

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At a glance

The percentage of Authorize.Net transactions that resulted in a chargeback. Buyer-initiated reversal through the issuing bank. The most expensive type of payment loss: scheme fees plus the funds plus the time-cost of dispute response.

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Calculation

Calculated automatically from your Authorize.net data. See the At a glance summary above for what the metric tracks and the worked example below for a typical reading.

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Worked example

“Heartland Hardware Co.”, 30 days ending 02 May 26. Chargeback reasons (top 6 in this window): What the merchant should notice:
  1. Blended 0.20% is healthy. Below 0.5% threshold. B2B portal at 0.00% is structural (procurement-managed, no consumer-dispute pathway).
  2. ARB at 0.54% is the alert. Subscription chargebacks usually mean the customer cancelled but kept getting billed; the customer dispute the unrecognised charge. Operational fix: aggressive ARB-cancellation UX, clear billing-descriptor (the line on the bank statement).
  3. Reason 4837 (no authorisation) at 2 is normal. This is the “friendly fraud” pattern: customer denies a real purchase. Defend with signed proof-of-delivery, AVS match, IP and device fingerprint.
  4. Win rate matters. Authorize.Net with strong Cardinal Cardinal Commerce 3DS data and AVS match has a 35 to 50% win rate on disputes. Heartland should always defend; cost is low (USD 25 to 50 in time) vs USD 4,200 in lost funds.
  5. Visa CE 3.0 / Mastercard Compelling Evidence 3.0 allow merchants to push back on “card-not-recognised” reason 4837 with proof of prior similar transactions. Authorize.Net supports this via the dispute-management interface.

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Sibling cards merchants should reference together

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Reconciling against the vendor’s own dashboard

Where to look in the Authorize.Net Dashboard: account.authorize.net → Reports → Chargebacks, with date filter. The acquirer’s monthly statement also shows chargeback count and fees. Why our number may differ: Cross-connector reconciliation:

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Known limitations / merchant FAQs

What’s a healthy chargeback rate? Below 0.5% in count and below 0.9% in dollar terms (Visa Acquirer Monitoring Program threshold). Above 0.9% triggers acquirer review and potential merchant-account termination. Visa CMP / Mastercard MCM, what are these? Visa Acquirer Monitoring Program: merchants exceeding 100 chargebacks/month AND 0.9% rate enter monitoring. Mastercard Excessive Chargeback Merchant program: similar thresholds. Both impose monthly fines (USD 25,000 to USD 100,000+) and require remediation plans. Friendly fraud, what is it? Customer makes a real purchase, then disputes the charge to recover money while keeping the goods. Common reasons cited: “I don’t recognise this charge”, “didn’t receive it” (when they did). Defend with signed-delivery proof, AVS match, device fingerprint, prior-purchase history. Visa CE 3.0 / Mastercard CE 3.0, how to use? Compelling Evidence 3.0 allows merchants to defend “card-not-recognised” disputes by showing prior similar transactions from the same customer (same IP, same shipping address, same device). Authorize.Net’s dispute-management interface supports CE 3.0 evidence submission. Win rate with CE 3.0 evidence: 60 to 80%. ACH returns, do they count as chargebacks? No. NACHA returns are tracked separately. Different defence pathway (you can’t “defend” a NACHA return; you can only re-debit if customer authorises). 3DS-passed liability shift, real? Yes for Visa and Mastercard cards (with 3DS 2.x). When the customer authenticates via 3DS challenge, liability for fraud-disputes shifts to the issuer. Heartland should ensure 3DS is firing on high-value web transactions. Subscription (ARB) chargebacks, why higher rate? Customers forget about subscriptions and dispute the charge as unrecognised. Mitigations: clear cancel UX, billing-descriptor that customers recognise, monthly email reminder before charge. Visa ownership of Authorize.Net, dispute handling? No mechanical change. Visa-card disputes go through the same Visa dispute network. The Authorize.Net dispute-management UI is the merchant’s interface; nothing changed structurally with Visa parent ownership. Cost of a chargeback? Direct: USD 15 to USD 50 acquirer fee per case + the disputed amount (held until resolution). Indirect: 1 to 4 hours of merchant time to respond. Total: roughly USD 100 to USD 200 per chargeback for a USD 100 disputed amount, before the lost goods.

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Tracked live in Vortex IQ Nerve Centre

Chargeback Rate is one of hundreds of KPI pulses Vortex IQ tracks across Authorize.net and 70+ other ecommerce connectors. Nerve Centre runs the detection layer; Vortex Mind investigates the cause when something moves; Ask Viq lets you interrogate any number in plain English. Start for free or book a demo to see this metric running on your own data.