Shopify Ops Glossary
Chargeback
A forced payment reversal initiated by a customer through their bank.
Definition
A chargeback occurs when a customer disputes a charge with their bank rather than requesting a refund from the merchant. The bank reverses the payment, charges the merchant a fee, and initiates a dispute process.
Why It Matters for Shopify Brands
Chargebacks cost merchants 2–4x the original transaction value when you factor in the disputed amount, chargeback fee, and labor to respond. High chargeback rates (above 0.9%) risk payment processor termination.
Benchmarks
Target chargeback rate: under 0.3%. Warning zone: 0.3–0.9%. High risk: above 0.9%.
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