What is Chargeback-to-transaction ratio?

Also: CB ratio

Monthly ratio of disputes to sales, calculated per MID; the primary metric governing entry to VAMP, ECP, and other monitoring programmes.

The chargeback-to-transaction ratio represents the number of chargebacks received by a merchant relative to their total transaction volume within a specific calendar month, usually calculated at the Merchant ID (MID) level.

Card schemes such as Visa and Mastercard define specific thresholds for this ratio, which, if exceeded, can trigger enrolment in their respective monitoring programmes, such as Visa's Visa Acquirer Monitoring Program (VAMP) or Mastercard's Excessive Chargeback Program (ECP).

These programmes are typically concerned with the number of *initial dispute messages* (e. g. , Visa's "First Presentment" or Mastercard's "First chargeback") received by the acquirer, irrespective of subsequent representment outcomes.

Operationally, this ratio is critical for merchants as it directly influences their financial health and their ability to process card payments.

Acquirers often provide merchants with reports detailing their monthly chargeback ratios, sometimes broken down by reason code, although the scheme monitoring programmes themselves typically focus on the aggregate ratio.

A common mistake merchants make is to focus solely on the monetary value of chargebacks rather than the raw count, as scheme monitoring programmes are primarily driven by the number of chargebacks,

meaning a high volume of low-value disputes can be just as detrimental as a few high-value ones.