A customer disputes a $100 charge. You lose the $100 — that's the part everyone knows. What most merchants never add up is everything around it: the dispute fee (charged win or lose), the representment labour if you fight it, and the ratio math that can put your whole merchant account under monitoring. One dispute is an annoyance; a pattern is a business risk.
The dispute fee itself: $20 CAD and when it applies
In Canada, the chargeback fee is $20 CAD per dispute — debited from your operating account in addition to the disputed amount. The issuing bank debits it and pays it to the card network, and it applies to every dispute, regardless of outcome. Win the representment and you recover the sale; the $20 is gone either way. (Some processors soften this: Helcim charges $15 and refunds it if you win.) Across the industry, the fee typically runs $15–$25 per dispute.
What a chargeback really costs: the six-line bill
One lost $100 dispute, all-in:
| Line | Cost |
|---|---|
| The sale itself | $100.00 |
| Dispute fee (Canada) | $20.00 |
| Representment labour (~30 min at ~$25/hr owner time) | ~$12.50 |
| Retrieval / representment service fees | $0–$50 |
| Total | ~$132.50+ |
Assembling evidence for a single representment takes 20–45 minutes of somebody's attention — policy documents, tracking numbers, fulfilment data — and that labour is sunk whether you win or lose. One avoided dispute a month saves roughly $240 a year in fees alone, before counting the recovered sales.
Representment: the fight-back, and what it really costs
Representment is the formal response: you submit receipts, shipping proofs, delivery confirmations, and logs to your acquirer, which sends them to the issuer for final judgment. If the issuer isn't satisfied, it can escalate to pre-arbitration — at additional cost — and then to arbitration, where the loser pays filing and review fees. There is no safe bet in a dispute, but representment is worth filing when you have clean evidence (signed delivery, matching AVS/CVV, a clear refund policy the customer saw). Without evidence, you're paying $20 plus your time to lose twice.
The 2026 VAMP threshold change
Visa retired its old dispute and fraud monitoring programs and replaced them with the Visa Acquirer Monitoring Program (VAMP). From April 1, 2026, the threshold dropped to 1.5% — fraud reports plus disputes divided by settled card-not-present transactions — in the US, Canada, the EU, and Asia-Pacific. Monitoring starts at 1,500 combined events a month, and enrolled merchants are assessed $8 per event. One transaction can count twice, once as a fraud report and once as a dispute. Mastercard runs its own tiers: the Excessive Chargeback Merchant program starts at 100 chargebacks a month and a 1.5% ratio, with fines escalating to $100,000+ past eighteen months. The era of quietly running at 2% is over.
Prevention checklist
- Make your billing descriptor recognizable. In your processor dashboard (usually Settings → Business profile → Statement descriptor), set the descriptor to your trading name, not a legal entity or processor default. "Unrecognized charge" is the #1 dispute trigger.
- Send receipts and tracking automatically. Every card-not-present order should generate an emailed receipt plus a shipping notification with tracking. No tracking number, no representment evidence.
- Collect AVS and CVV on every online order. In your gateway or checkout settings, require both. They are your first line of fraud screening and strengthen any representment you file later.
- Publish a clear refund policy at checkout. Put it on the checkout page and in the confirmation email — a policy the customer never saw is useless in representment.
- Refund quickly instead of disputing. If the customer has a legitimate complaint, refund within 24 hours. A refund costs you the processing fee; a chargeback costs you the sale, the $20 fee, and your time.
- Watch your dispute ratio monthly. Divide disputes by card-not-present transactions. If you're approaching 1% — well under the 1.5% VAMP threshold — treat it as a fire drill, not a statistic.
- Respond to retrieval requests within 10 days. A retrieval request is the issuer asking for the receipt before it becomes a chargeback. Answer fast with complete documentation and many disputes die here.
What success looks like: your monthly dispute ratio stays under 0.5%, every online order has a receipt plus tracking on file, and no customer ever sees an unrecognizable name on their statement. Review the ratio on the same day each month — the same discipline as reconciling the bank account.
FAQ
Do I get the chargeback fee back if I win?
Usually not — the $20 CAD fee applies regardless of outcome and is not automatically returned. Some processors (e.g., Helcim at $15) refund it on a win, so ask yours.
What's the difference between a retrieval request and a chargeback?
A retrieval request is the issuer asking for documentation about a transaction — respond within about 10 days and it may never become a chargeback. A chargeback is the actual reversal of funds.
Can too many chargebacks close my merchant account?
Yes. Visa's VAMP program monitors merchants at a 1.5% dispute-plus-fraud ratio (from April 2026), and Mastercard's excessive-chargeback tiers carry fines up to $100,000+. Processors make money on chargeback fees, so don't assume yours will warn you before the networks act.