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Not the fee — the profit. See how many clean sales it takes to earn one chargeback back.
A chargeback reverses the sale but not the costs. The goods are gone, the processing fee is usually not returned, and a dispute fee is added on top — so the loss is always larger than the sale.
Physical goods 30–50%, SaaS 75–85%
Paydude charges $12
Assumes you lose the dispute and do not recover the goods. Most processors do not refund the original processing fee either way.
It takes 1.3 successful sales to make back the profit lost to a single chargeback.
The full sale amount is pulled back from your account, usually before the dispute is even decided.
For physical products that is inventory you will not see again. For software it is support time and infrastructure already spent.
Most processors keep the original percentage and fixed fee on a disputed transaction, so you pay to accept a payment you did not keep.
Typically $15 to $25 per case, applied whether you win or lose. Paydude charges $12.
Telling a founder a chargeback cost them $62 is abstract. Telling them it takes 2.4 clean sales to earn that profit back is not — it is the same figure in the unit the business actually plans in.
| Gross margin | Profit per sale | Sales to recover |
|---|---|---|
| 30% | $13.55 | 4.0 |
| 50% | $23.55 | 2.4 |
| 70% | $33.55 | 1.7 |
| 85% | $41.05 | 1.4 |
The lower your margin, the more brutal a dispute is. At 30% margin a single chargeback erases the profit from four successful sales.
GOOD QUESTIONS
Usually not. Most processors return the sale amount if you win but keep the original processing fee, and the dispute fee itself is almost never refunded. Winning limits the damage rather than eliminating it.
Under 0.5% of transactions is healthy for most businesses. Card networks place merchants into monitoring programmes at around 0.9%, which brings extra fees, reserves and in serious cases account termination — so the rate matters more than the individual losses.
Almost always. A refund costs you the sale and usually the processing fee, but it carries no dispute fee and does not count toward your chargeback ratio. Making cancellation easy is cheaper than defending disputes.
Because recovery happens out of profit, not revenue. At an 85% margin a $50 sale contributes about $41 of profit, so one chargeback is roughly 1.4 sales. At 30% it contributes about $14, so the same chargeback costs four sales.