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Metrics type: Supporting Metrics • Category: Payment Gateway

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At a glance

The percentage of successful Recharge subscription charges that became chargebacks (customer-initiated disputes through their issuing bank). Chargebacks happen on the underlying processor (Shopify Payments / Stripe), not on Recharge itself, but they surface back to Recharge as chargeback events on the original charge. Subscription chargebacks are dominated by friendly fraud (“I don’t recognise this charge”) and cancel-flow confusion (“I thought I cancelled”). Card networks impose merchant penalties when chargeback rate exceeds 1.0% (Visa CB Monitoring) or 1.5% (Mastercard ECP), making this a regulatory metric, not just a financial one.

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Calculation

Calculated automatically from your Recharge 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

“Daily Greens Co”. 30-day window 03 Apr 26 to 02 May 26.
What the merchant should notice:
  1. 0.126% is healthy. Below 0.5% is excellent for subscription. Above 0.75% triggers our internal alert; sustained above 1% triggers Visa CB Monitoring with associated fees.
  2. Friendly fraud (14 cases) dominates. Customers signed up months ago, forgot, see a USD 79 rebill on their statement, dispute it as “I don’t recognise”. Mitigation: clearer billing-descriptor (DAILY GREENS SUBSCRIPTION not DGSUBS), pre-rebill email reminder, easy-to-find subscription dashboard.
  3. Cancel-flow confusion (6 cases) suggests a UX bug. Customers thought they cancelled but didn’t fully complete the cancel-flow (e.g. they paused but expected cancel). Audit the customer-portal cancel-flow for clarity.
  4. Genuine fraud is small (2 cases). Subscription rebills tend not to attract stolen-card fraud because the original signup card has already been verified weeks/months earlier; stolen cards are rarely used for recurring.
  5. Each chargeback costs ~USD 25, 50 in scheme fees beyond the disputed amount. The 26 cases this period cost roughly USD 650, 1,300 in fees on top of the USD 2,054 disputed. Total impact ~USD 3,000.

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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 Recharge merchant portal: admin.rechargepayments.com. Recharge surfaces chargebacks under Recharge Admin → Charges → Chargebacks. The underlying processor (Stripe Disputes, Shopify Payments Disputes) is the source of truth and has more case-detail (evidence upload, response deadline) than Recharge admin. Why our number may legitimately differ: Cross-connector reconciliation:

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Known limitations / merchant FAQs

“My chargeback rate jumped, what happened?” Most subscription chargeback spikes are friendly fraud waves: a customer cohort that signed up months ago gets a rebill, doesn’t recognise it, disputes through their bank. Mitigation: clearer billing-descriptor, pre-rebill email, easier cancel-flow. “What’s the regulatory threshold?” Visa Chargeback Monitoring kicks in at 1.0% (or 100 chargebacks per month, whichever is lower). Mastercard ECP at 1.5%. Crossing those incurs fines (USD 10,000 per month) and forces a remediation plan. Sustained crossings can lead to MATCH-list flagging, which makes acquiring a merchant account elsewhere very difficult. “Should I fight every chargeback?” No. The win rate on subscription friendly-fraud chargebacks is typically 25, 40%; below the cost of representment for low-value cases. Fight cases >USD 200, ignore cases <USD 50. Recharge integrates with chargeback-defense services (Chargehound, Verifi) for automated representment. “Why is Amex chargeback rate higher?” Amex customers tend to dispute more aggressively than Visa / MC customers (Amex’s customer-protection brand promise). Trade-off: Amex has higher AOV, the math usually still favours accepting Amex. “Q1 spike, why?” Post-holiday “I forgot I subscribed” cohort. Customers signed up for a holiday gift, rebill hits in January / February, they don’t recognise. Q1 chargeback rates run 30, 60% higher than Q3 baseline. “Refund vs chargeback, what’s the math?” A chargeback costs (disputed amount + ~USD 25, 50 scheme fee + representment cost + ~USD 0.10 rate-impact). A refund costs (disputed amount + ~USD 2, 3 non-recoverable original fee). Refund first, dispute second. Quick refund response usually prevents chargeback escalation. “Subscription rebill chargebacks, do I have grounds to fight?” Yes if: clear “subscription” language at signup, recurring billing terms accepted at checkout, rebill notification email sent. Recharge can supply representment evidence packs. Win rate ~30, 50% on well-documented subscription cases.

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Tracked live in Vortex IQ Nerve Centre

Chargeback Rate is one of hundreds of KPI pulses Vortex IQ tracks across Recharge 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.