Shopify chargeback rate and account health warnings

One bad week can do it. A batch of orders ships late, a few customers lose patience, three or four of them call their bank, and a month later you get a message about your account health. Nothing about your products changed. The ratio did.

The Shopify chargeback rate is the share of your payments that customers dispute, and it is the number Shopify watches when deciding whether your Australian store is a risk. This guide explains what the rate counts, where to find it, what the warnings and the reserve mean, and how to bring the number down with steps you can start this week.

This guide is for you if:

You received an account health notification, a reserve email or a message about the Network Dispute Resolution Program, and want to know what it means.
You want to check your Shopify chargeback rate before it becomes a problem.
You have a few disputes and want to know how close you are to a line that matters.

Last updated: 9 October 2026. Written by the ChargeFix team. Reviewed against sources on 9 October 2026.

The 30-second answer (TL;DR)

Your Shopify chargeback rate counts the disputes customers open on eligible Shopify Payments transactions, including ones resolved automatically through network programs.
You can see it at Settings, then Payments, then Chargeback monitoring, and in Analytics, Reports, under "Chargeback rate".
A "high" rate can lead to an account health notification, then a payout reserve or enrolment in the Network Dispute Resolution Program (NDRP).
Shopify's NDRP page says a rate of 1.5% or higher over the last 90 days can lead to automatic enrolment, and you exit by staying below 1.00% for 30 consecutive days.
In NDRP the customer gets the full amount, there is no evidence step, and the fee in Australia is A$25 per dispute.
Winning a dispute does not remove it from the rate.
Shopify's monitoring page gives no single numeric threshold for every warning, so treat 1% as your working ceiling and 0.5% as your comfortable zone.

Quick note: The rate is a ratio, so volume matters. Three disputes on 100 orders is 3.0%. Three disputes on 1,000 orders is 0.3%. A small store has less room for error, and one disputed order can move the number more than you expect.

The rate at a glance

Term	What it means	Where it comes from
Chargeback rate	Disputes opened by customers as a share of eligible payments	Shopify chargeback monitoring page
Rolling 90 days	The window used for the NDRP rate	Shopify NDRP page
1.5% or higher	Can lead to automatic NDRP enrolment	Shopify NDRP page
Below 1.00% for 30 days	Exit condition for NDRP	Shopify NDRP page
A$25	Fee per auto-resolved dispute in Australia	Shopify NDRP page
10% reserve	Share of payouts held on enrolment	Shopify NDRP page

What is the Shopify chargeback rate?

The Shopify chargeback rate is a measure of how often customers dispute your payments. According to Shopify's chargeback monitoring page, it counts all disputes customers open on eligible Shopify Payments transactions, including those resolved through network programs.

That wording has three consequences worth stating plainly.

It counts disputes, not losses. If you fight a dispute and win it, it still counts. Shopify's pages are explicit that a won dispute does not remove it from the rate. The rate measures how often customers go to their bank, not how often the bank sides with them.

It only covers Shopify Payments. Third-party processors such as authorize.net are excluded. If part of your sales go through a different gateway, those disputes sit outside the number Shopify shows.

It includes disputes you never saw. Because the rate includes disputes that were resolved automatically through card network programs, some disputes that never reached your response screen still count. The Shopify admin marks those as "Resolved".

A third-party source reports that since 28 January 2026 Shopify's rate includes disputes resolved through the Rapid Dispute Resolution program, and that a report filter lets you see the older figure. We could not confirm that detail on Shopify's own page, so check the report filters in your admin.

How is the Shopify chargeback rate calculated?

Shopify's help pages do not publish a full formula. What they say is that the rate reflects disputes on eligible payments. For the NDRP rate they use a rolling 90 day window.

The simple version most merchants use is:

Chargeback rate = disputes in the period ÷ eligible transactions in the period × 100

One third-party guide describes Shopify working to a 1.00% line over a rolling 90 days. We treat that as a useful rule of thumb, not as a Shopify statement, because Shopify's own page gives no threshold for every warning. Always read the figure in your own admin.

Illustration: the same disputes on three different stores

These are made up numbers to show how volume changes the result.

Store	Orders in 90 days	Disputes	Rate
Small shop	200	3	1.50%
Mid-sized shop	800	3	0.38%
Larger shop	3,000	3	0.10%

Three disputes is a rounding error for the larger store and an urgent problem for the small one. If you run a small store, your goal is not only to win disputes. It is to stop them opening.

Does one dispute change the rate much?

On a small store, yes. In the table above, one extra dispute on the small shop moves it from 1.50% to 2.00%. On the larger store the same extra dispute moves it by about 0.03 percentage points. This is why new and low-volume stores feel account health warnings sooner than established ones.

Shopify excludes merchants below a minimum order volume from the NDRP programme. The page does not publish the number, so we cannot tell you where the cutoff sits.

Where do you find your chargeback rate in Shopify?

There are two places.

Chargeback monitoring. In your admin go to Settings, then Payments, then Chargeback monitoring. This shows your current standing.
Reports. Go to Analytics, then Reports, and open the report called "Chargeback rate".

Check both. The monitoring page tells you whether Shopify considers your rate high. The report lets you see the trend and filter the data.

Make this a monthly habit. A rate you look at once a month changes slowly. A rate you look at only after an email arrives has already done its damage.

What should you track alongside the rate?

The rate alone does not tell you why disputes are happening. Pair it with a few simple counts.

Disputes by reason. If most are "product not received", your issue is delivery. If most are "fraudulent", it is order screening.
Disputes by product. One product may cause most of the trouble.
Disputes by shipping method. Cheaper methods with weak tracking often cause more disputes.
Time from order to dispute. Disputes that arrive after the expected delivery date point to delays.
Refund rate. Shopify lists a rising refund rate as a reserve trigger, so watch it too.

A short table in a spreadsheet, updated weekly, is enough.

What warnings can Shopify send you?

Shopify's pages describe a sequence rather than a fixed ladder. A high rate can trigger an account health notification, and after that a reserve or enrolment in NDRP.

Account health notification

This is the first signal. It tells you Shopify considers your chargeback rate high. It is a prompt to act, not a penalty. If you receive one, look at the rate, the reasons behind the disputes, and what has changed recently.

Payout reserve

A reserve holds part or all of your payouts for a set period. Shopify's reserves page lists the triggers:

extended billing cycles
elevated chargeback activity
a rising refund rate
long-delivery industries, such as pre-orders and custom orders
sudden volume surges

Reserves come in two forms: a fixed amount or a percentage. Shopify's examples are US$1,000 for 120 days, and 10% for 120 days. You can see a reserve in your admin under Finance, then Payouts, where the payout balance is shown against reserved funds.

Shopify reviews a reserve before it expires. You can appeal by replying to the reserve email, though some reserves cannot be appealed. The page gives no country-specific or numeric chargeback threshold for reserves.

Network Dispute Resolution Program enrolment

NDRP is the step that changes how disputes work for you. Shopify's page says an NDRP-inclusive chargeback rate of 1.5% or higher over the last 90 days can lead to automatic enrolment. Merchants below a minimum order volume are excluded.

Once enrolled:

Disputes can be resolved automatically, with the customer receiving the full amount.
There is no evidence step, and the outcome is final.
A fee applies for each auto-resolved dispute. In Australia it is A$25. Shopify lists US$15 and £10 for other regions.
A 10% payout reserve applies. It can be lifted early on exit.
The admin shows these disputes with the status "Resolved", and you can filter by it. The fee appears on the order.
Shopify notifies you on enrolment, and the reserve terms arrive by email.

If the rate stays above 1% after the initial reserve expires, Shopify's page says further reserves or payout holds are possible.

What does NDRP cost an Australian store?

The headline fee is A$25 per auto-resolved dispute. The real cost is higher, because you also lose the sale.

Illustration: a month in NDRP

Suppose you are enrolled and six disputes are auto-resolved in a month. The average order is A$120.

Item	Amount
Six orders refunded to customers, 6 × A$120	A$720
NDRP fees, 6 × A$25	A$150
Total cash out	A$870
Payout reserve on, say, A$5,000 of sales at 10%	A$500 held

The A$500 reserve is held, not lost, and returns when the programme ends or the reserve is released. But it affects cash flow. If your margin on those orders is 30%, the A$720 of lost sales means you also lose the stock, which we cover in the post about whether you lose both the money and the product.

These are assumed figures to show scale. Your numbers will differ.

Why can't you fight an NDRP dispute?

Shopify's page says there is no evidence step and the outcome is final. This is the key difference between NDRP and a normal chargeback. In a normal chargeback you can submit evidence and the issuer decides. In NDRP the dispute is settled by card network rules and the customer gets the full amount.

That is why avoiding enrolment matters more than winning individual disputes. Once you are in, your strongest evidence is no longer useful for those cases.

How do you get out of NDRP?

Shopify's page gives a clear exit rule: your rate must stay below 1.00% for 30 consecutive days while you process on Shopify Payments.

Three practical points follow.

The 30 days must be consecutive. One bad week resets the clock, so do not stop prevention work as soon as the rate drops.

You must keep processing on Shopify Payments. Switching gateway does not count toward exit.

The reserve can be lifted early on exit. The page says this, though it does not say how long it takes. Contact Shopify Support if the reserve is still in place after you exit.

Illustration: how long might exit take?

Say you enrol with a rate of 1.8% over 90 days, with about 600 orders in that window. To get below 1.00% you need disputes at or under 6 for the same volume. If you had 11, five older disputes need to drop out of the rolling window, which happens as they age past 90 days, provided no new ones arrive. That is an illustration of the mechanism only, and Shopify's page does not describe exactly how the 30-day test is measured, so we cannot promise the timeline.

Why do disputes pile up? The usual causes

Most rate problems come from a short list of causes. Shopify's own prevention page points at the same ones.

Delivery problems

Late deliveries, lost parcels and weak tracking produce "product not received" disputes. This is the biggest group for most physical stores. Shopify recommends shipping soon, giving tracking and realistic estimates, notifying customers of delays, and packing well.

Unclear descriptors

If your customer does not recognise the name on their statement, they dispute it. Shopify recommends a recognisable statement descriptor and sending receipts.

Hard-to-find contact details

Customers who cannot reach you go to their bank. Shopify says to make contact details easy to find, reply quickly, and refund accidental double charges.

Fraud

Fraudulent orders become chargebacks later. Shopify recommends reviewing suspicious orders before fulfilling, and shipping only those that pass AVS for US, UK or Canada destinations. That specific AVS advice applies to those regions, not Australia.

Subscriptions

Cancel promptly and confirm it. Make recurring charges clear before the first payment.

Slow or unclear refunds

A customer who is promised a refund and does not see it will often dispute. Keep a clear return policy and refund quickly. A refund made while the dispute is still an inquiry can end it, but an open chargeback cannot be refunded.

Pre-orders and custom orders

Shopify names long-delivery industries as a reserve trigger. If you take pre-orders, state the dates clearly, update customers, and think about when you charge.

A 30-day plan to lower your Shopify chargeback rate

You can lower the rate by cutting the number of disputes, and by growing the number of clean orders. Prevention takes time, so start with the quick wins.

Week 1: find out what is driving it

Open the Chargeback rate report and export the last 90 days.
Group disputes by reason, product and shipping method.
Read each customer's story. Was there a shipping delay, a missing message, or an unclear policy?
Write down the top two causes.

Week 2: fix the cheap things

Change the statement descriptor if customers might not recognise it.
Add a visible contact email and phone number on your checkout and order emails.
Set up shipping confirmation emails with tracking links.
Reply to every customer message within one business day.

Week 3: tighten fulfilment and policies

Add realistic delivery estimates to product and checkout pages. Padding the estimate is better than missing it.
Send a delay notice as soon as you know about a delay.
Make your return and refund policy easy to read and compliant with Australian Consumer Law.
Review high-risk orders before fulfilling them.

Week 4: build the habit

Check Chargeback monitoring and the report every week.
Keep your evidence saved from day one, using the chargeback evidence checklist.
Track due dates so no dispute is missed. Our guide to the Shopify chargeback deadline shows how.
Set a reminder to review the rate on the same day each month.

Should you refund before a customer disputes?

Sometimes, yes. A refund is cheaper than a dispute. A refund costs you the sale, and a dispute costs you the sale, the fee, your time and a point in the rate.

Shopify says a full refund ends an inquiry, while a partial refund does not. An open chargeback cannot be refunded, so the time to refund is before the customer reaches the chargeback stage. Our post on the difference between a chargeback and an inquiry explains why.

Illustration: refund first versus dispute later

A customer says a A$120 parcel has not arrived. You have two paths.

Path	Cash out	Rate impact
Refund now	A$120	None
Ignore, customer disputes, you lose	A$120 + A$25 fee + 45 minutes at A$40 an hour (A$30) = A$175	One dispute added

If the parcel really is lost, the refund is the better outcome by about A$55 and it keeps your rate clean. If you can prove delivery, fighting may be right, and our post on accepting or fighting a dispute shows how to decide.

Do not refund blindly. If the order was delivered and the customer is wrong, a refund rewards the claim. Use judgement and your records.

How does a small store slide into a high Shopify chargeback rate?

It rarely happens in one dramatic event. It usually happens through a chain of small, ordinary problems that line up in the same few weeks.

Illustration: a quiet 90 days that goes wrong

Take a store with 400 orders in 90 days at an average of A$120, 270 of them in the first two months. Over the first two months it has two disputes on 270 orders, a rate of about 0.7%. Then a supplier delay pushes shipping out by nine days on about 60 orders in the third month. Customers are not told. Six of them contact their bank instead of the store, and one more dispute arrives from a fraudulent order that was not screened.

Stage	Disputes	Orders	Rate
Months 1 and 2	2	270	0.74%
After the delay	9	400	2.25%

The store went from comfortable to above the 1.5% line in a few weeks, without any change in product quality. Each of the six delay disputes could have been prevented with one email: "your order is delayed, here is the new date, reply if you would like a refund". That email costs nothing and avoids a A$25 fee, a lost sale and a point in the rate.

These are assumed numbers for illustration, and the same pattern can happen to any store.

What do the best-run stores do differently?

They do not avoid every dispute. They remove the avoidable ones, and they find problems early.

They treat a delay as a communication task. The moment a shipment slips, the customer hears about it from the store, not from the tracking page.
They make refunds easy. A customer who can get a quick, polite refund does not need a bank to do it.
They watch weekly, not monthly, when volume is volatile. Sales promotions and holiday peaks change the mix of orders faster than a monthly check can catch.
They separate fraud from service problems. The fix for fraud is order review. The fix for service problems is better delivery and communication. Mixing them wastes effort.

What should you say to customers to stop a dispute opening?

Most customers who dispute a charge would have preferred a reply from the store. A short, plain message early in the process is the cheapest prevention you have.

A delay notice you can adapt

Hi [name], a quick update on order [number]. Your parcel is running behind and we now expect it to reach you by [date]. We are sorry for the wait. If you would rather cancel and receive a refund, reply to this email and we will process it straight away.

A reply to "where is my order?"

Hi [name], thanks for getting in touch. Your order shipped on [date] with [carrier], tracking [number]. The latest status is [status]. If it has not arrived by [date], reply here and we will either chase the carrier or refund you, whichever you prefer.

A reply to a refund request outside your policy

Hi [name], thanks for explaining. Our policy for this item is [short summary], so we cannot offer a change of mind refund. If the item has a fault, or is not as described, you may have rights under Australian Consumer Law, and we would like to put it right. Please send a photo and a short description.

That last template matters because "no refunds" is not a safe reply. The ACCC says "no refund" signs and terms do not override consumer rights, and relying on them for faulty goods is illegal. A customer who is told "no" for a genuine fault is far more likely to dispute.

How do reserves change your cash flow?

A reserve is a timing problem first and a loss only if you cannot cover it. Still, the timing can hurt.

Illustration: a 10% reserve on a growing store

A store takes A$20,000 a month in sales and is placed under a 10% reserve for 120 days, as in Shopify's example. Each month about A$2,000 is held back from payouts.

Month	Sales	Held in reserve	Cumulative held
1	A$20,000	A$2,000	A$2,000
2	A$20,000	A$2,000	A$4,000
3	A$20,000	A$2,000	A$6,000
4	A$20,000	A$2,000	A$8,000

By the end of the period, A$8,000 is tied up, which could cover a month of stock or ad spend. Shopify's reserves page says funds are reviewed before expiry, and the exact release timing is set in your reserve email. Our table assumes a simple rolling hold, which may not match your terms.

The practical lesson is to build a buffer before you need it, and to treat a first account health notification as a signal to protect cash.

What about Visa and Mastercard monitoring programs?

Card networks run their own monitoring programmes. A third-party source reports that the Visa Acquirer Monitoring Program, known as VAMP, sets an excessive-merchant threshold of 150 basis points, which is 1.5%, in the US, Canada, Europe and Asia Pacific from 1 April 2026. Another source, a SecurityBrief Australia article from 16 October 2025, reports 2.2% and then 1.5% from April 2026, with a US$8 per dispute fee. That article does not say Australia is treated differently.

We could not verify how VAMP applies to an Australian merchant on Shopify Payments, and Shopify's own pages do not describe it. Treat these as background. For your store, the numbers that matter are the ones Shopify shows in your admin, and the 1.5% and 1.00% lines on its NDRP page.

What's different for Australian merchants?

The fee is A$25. Shopify's NDRP page gives A$25 for Australia. Check your admin for the current fee on regular chargebacks.

Payouts and cash flow. A reserve hits cash flow directly. Many small Australian stores run on tight margins, so a 10% hold on payouts for months is a real constraint. Plan for it before it happens.

Consumer law interacts with prevention. Refunds and returns affect your rate. The ACCC says a failed consumer guarantee means you must offer a repair, replacement or refund, and that "no refund" signs do not override consumer rights. If a customer has a genuine faulty product claim, refunding them promptly is both the legal answer and the best way to keep disputes from opening.

Banks and escalation. NAB's merchant page states a A$25 fee refunded on a win, and a merchant response window to the bank of 30 days for Visa and eftpos and 45 for Mastercard. That is a bank process and is different from the Shopify evidence deadline, so do not mix them up. See the deadline guide for the Shopify clock.

Couriers. Local delivery issues drive many Australian disputes, especially around holidays and remote areas. Realistic delivery estimates protect your rate.

Common mistakes with account health

Ignoring the first notification

The first notice is the cheapest one to act on. By the time a reserve arrives, options are narrower.

Believing wins fix the rate

A won dispute still counts. Winning protects the money, not the rate.

Fighting every dispute, ignoring the cause

Evidence work is reactive. If the same reason keeps appearing, fix the cause.

Changing gateways to escape the number

Shopify's rate covers Shopify Payments. Moving sales elsewhere may hide the number but does not fix the customer experience. It also affects NDRP exit, which requires processing on Shopify Payments.

Padding the order count

Splitting orders or adding low-value orders to dilute the rate may breach Shopify's terms. We cannot advise on that, and it does not address the cause. Do not do it.

Stopping prevention after the rate drops

NDRP exit needs 30 consecutive days below 1.00%. A relapse resets the count.

A monthly account health checklist

Use this on the first Monday of each month.

Open Chargeback monitoring and note the status
Open the Chargeback rate report and record the 90 day rate
Count disputes by reason
Check Finance, then Payouts, for any reserve
Review refund rate against last month
Check open disputes and due dates
Look at orders delivered more than 10 days after dispatch
Read the last five customer complaints
Confirm your statement descriptor is recognisable
Save any new policy version with its date

What we could not verify

Because accuracy matters more than confidence, here is what Shopify's pages did not tell us.

The exact threshold for an account health notification. The monitoring page says "high" without a number.
How the rate is calculated in full. No formula is published.
What happens when the rate falls. The monitoring page does not say how quickly warnings clear.
The NDRP minimum order volume. It is mentioned but not stated.
How VAMP applies to Australian merchants on Shopify Payments.
Shopify's own fee table for regular chargebacks in Australia. Check your admin.

If any of these affect a decision, ask Shopify Support and keep their reply.

Frequently asked questions

What is a good chargeback rate on Shopify?

Shopify does not publish a single good number on its monitoring page. As a working rule, aim to stay well under 1%, because Shopify's NDRP exit line is below 1.00% and enrolment can follow a rate of 1.5% or higher over 90 days. Lower is safer, especially on small volumes.

Where do I see my Shopify chargeback rate?

Open Settings, then Payments, then Chargeback monitoring for your standing. For the numbers, go to Analytics, then Reports, and open the Chargeback rate report. Check both, because the monitoring page shows status and the report shows the trend you can filter and export.

Does winning a dispute lower my chargeback rate?

No. Shopify's pages say a won dispute still counts toward the rate, because the rate measures how often customers open disputes, not who wins them. Winning protects the money and may return the fee, but only fewer disputes will bring the rate down.

What is NDRP on Shopify?

The Network Dispute Resolution Program resolves some disputes automatically under card network rules. The customer receives the full amount, there is no evidence step, and the outcome is final. Shopify says a rate of 1.5% or higher over 90 days can lead to enrolment. In Australia the fee is A$25 per dispute.

How do I get out of NDRP?

Shopify's page says your chargeback rate must stay below 1.00% for 30 consecutive days while processing on Shopify Payments. The initial 10% reserve can be lifted early on exit. If the rate stays above 1% after the reserve expires, further reserves or holds are possible, so keep prevention going.

Why did Shopify put a reserve on my payouts?

Shopify lists several triggers: extended billing cycles, elevated chargeback activity, a rising refund rate, long-delivery industries such as pre-orders, and sudden volume surges. Reserve terms arrive by email. You can see held funds under Finance, then Payouts, and appeal by replying to the reserve email, though some cannot be appealed.

Do disputes on other payment gateways count?

Shopify's monitoring page says third-party processors such as authorize.net are excluded from the rate. The rate covers eligible Shopify Payments transactions. Disputes on other gateways are handled by those providers, and their rules and fees may differ, so check each one directly.

Can I stop disputes from counting if I refund?

A full refund during an inquiry ends it, but an open chargeback cannot be refunded. Shopify's pages do not say a refunded inquiry is removed from the rate, and we could not verify that. Refunding early still saves the fee and time, and it improves the customer's experience.

What is the fastest way to lower my rate?

Find the main reason for your disputes, then fix that first. For most stores it is delivery: add tracking, give realistic estimates, tell customers about delays, and reply quickly. Then use a recognisable descriptor and make contact details easy to find. The effect shows up as older disputes age out of the window.

Start free trial with ChargeFix

ChargeFix helps Australian Shopify merchants answer disputes on time with a ready response built from their own order, delivery and message records. You review and file it, or let Auto mode handle them. If your Shopify chargeback rate is climbing and you want fewer disputes slipping through, you can try it on a free trial first.

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Sources

Chargeback monitoring, Shopify Help Center
Network dispute resolution programs, Shopify Help Center
Reserves, Shopify Help Center
Preventing chargebacks, Shopify Help Center
Overview of the chargeback and inquiry process, Shopify Help Center
Repair, replace, refund, cancel, ACCC
Chargebacks: prevention and dispute guide for merchants, NAB
SecurityBrief Australia, article on Visa VAMP changes, 16 October 2025 (link not verified)