Plain-language questions
Ask for chargeback rate per month, customer or product in the SQL Explorer with AI. The AI writes the SQL, you see the query and run it yourself; the AI only receives metadata.
KPI · E-commerce
Chargeback rate: formula and example.
Chargeback rate is the number of chargebacks divided by the number of successful card transactions in the same period, as a percentage. A chargeback is a reversal the customer forces through their bank or card issuer, for example over fraud, an undelivered order or a dispute. Chargebacks cost the seller the order amount plus a handling fee, and a high rate can affect your arrangement with the payment provider.
Chargeback rate formula
Number of chargebacks ÷ number of successful card transactions × 100%
Worked example
In September, Acme Groothandel processes 8,000 successful card transactions and receives 12 chargebacks. Chargeback rate is 12 ÷ 8,000 × 100% = 0.15%.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
A rising chargeback rate points to more fraud, more dissatisfaction with deliveries or an unclear descriptor on bank statements. Break it down by reason code, which your payment provider supplies, and compare with your own previous months. Payment providers and card schemes use their own thresholds and calculation methods; ask your provider for theirs rather than relying on a general figure.
Pitfalls with chargeback rate
- Counting chargebacks in the month of the original payment while your provider counts them in the month they arrive, or the other way round.
- Including every payment method in the denominator when chargebacks mostly occur on card payments.
- Not reversing disputes you won in your figures, so the loss looks bigger than it is.
SQL & DAX
Calculating chargeback rate in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
SELECT date_trunc('month', created_at) AS month,
COUNT(*) FILTER (WHERE status <> 'failed') AS transactions,
COUNT(*) FILTER (WHERE status = 'chargeback') AS chargebacks,
ROUND(100.0 * COUNT(*) FILTER (WHERE status = 'chargeback')
/ NULLIF(COUNT(*) FILTER (WHERE status <> 'failed'), 0), 3) AS chargeback_rate_pct
FROM payments
WHERE method = 'card'
GROUP BY 1
ORDER BY 1;Chargeback Rate =
DIVIDE(
CALCULATE(COUNTROWS(Payments), Payments[status] = "chargeback", Payments[method] = "card"),
CALCULATE(COUNTROWS(Payments), Payments[status] <> "failed", Payments[method] = "card")
)In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate chargeback rate?
Divide the number of chargebacks by the number of successful card transactions in the same period and multiply by 100%. With 5 chargebacks on 4,000 transactions, the rate is 0.125%. Check with your payment provider which period and denominator they use.
What is a chargeback?
A chargeback is the reversal of a card payment, requested by the customer through their bank or card issuer. Reasons include fraud, an order that never arrived or did not match the description, and a disputed charge. The seller can contest it with evidence, such as tracking details or correspondence.
How do you prevent chargebacks?
Use a recognisable name on bank statements, deliver quickly with tracking, keep customer service reachable and publish a clear returns policy. Apply your payment provider's fraud checks to risky orders. Customers who get a quick refund are less likely to raise a chargeback.
Further reading
- KPI libraryE-commerce KPIs: formulas and examplesE-commerce KPIs cover visitors, orders, returns and margin per channel. The data comes from your web shop, marketplaces and payment provider, alongside purchasing and stock from your ERP.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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