Chargeback insurance vs a chargeback app for Shopify: costs, coverage and the break-even sum

A salesperson offers you chargeback insurance: for 1% of your revenue, someone else will pay for every fraudulent chargeback. No evidence to gather, no deadlines, no losing sleep over a $400 order that a stranger disputed from another country. It sounds like the end of the problem. Then you remember a friend who uses a chargeback app for $19 a month and fights the disputes herself, and you wonder whether you are about to pay ten times as much for the same thing.

They are not the same thing, and the difference decides which one saves you money. What people call chargeback insurance is usually a fraud or chargeback guarantee: a vendor screens your orders, declines the risky ones and agrees to pay for qualifying chargebacks on the ones it approves. A chargeback app does something else. It helps you answer the disputes that arrive, and it never pays the loss for you. This guide sets the two side by side with real published prices, a break-even formula and three worked stores, so you can see which one fits your fraud, your order size and your mix of disputes.

This guide is for you if:

• You sell on Shopify and you are weighing a fraud guarantee against a chargeback response tool.
• Most of your losses are fraud and you wonder whether a guarantee is worth the fee.
• You want a plain sum, not a sales pitch from either side.

Last updated: 30 October 2026. Written by the ChargeFix team. Reviewed against sources on 30 October 2026.

A note on bias before we start: we make ChargeFix, which is a chargeback response tool, so we sit on one side of this comparison. We do not sell guarantees and we say below where a guarantee is the better buy. Guarantee prices are mostly unpublished, so the figures here come from the one published rate card we found, NoFraud's, as reported by Redo, plus Shopify's own terms for Shopify Protect. Redo is a vendor of chargeback products. Prices change, and a guarantee contract matters more than any page, so read the real terms.

The 30-second answer (TL;DR)

• A fraud guarantee screens orders, declines some and reimburses qualifying chargebacks on the ones it approves. A chargeback app helps you fight disputes and does not pay your losses.
• NoFraud, now Wyllo, publishes the only rate card we found: a $500 guarantee for a $250 monthly minimum and 1% of revenue, a $1,000 guarantee for $350 and 1.25%, and a $2,000 guarantee for $450 and 1.50%, for merchants under $50,000 a month.
• A guarantee pays for itself only when covered losses exceed its fee plus the sales it wrongly declines. For a $100 order and a $250 fee, that takes about 3.6 fraud chargebacks a month if you win 40% of the ones you fight.
• A guarantee reimburses chargebacks but does not stop them being filed, so they still count toward your ratios, per Redo.
• Shopify Protect is free for eligible US orders but covers only unrecognised and fraudulent disputes. Use it before you pay for anything else.
• Most small stores with mixed disputes do better with a flat-fee app. High-ticket, fraud-heavy stores often do better with a guarantee.

Quick note: Neither product guarantees you a good result. A guarantee is a contract, and what it covers is whatever the contract says. A chargeback app improves your odds but the bank decides. Read the covered reason codes before you pay for anything.

At a glance

	Fraud or chargeback guarantee	Chargeback response app
What it does	Screens orders and pays for covered chargebacks	Builds and files your evidence
Who pays the loss	The vendor, if the order was approved and covered	You, unless you win
Typical price	Percentage of revenue or order value, with minimums	Flat monthly plan or a share of wins
Side effect	Declines some orders	None on your orders
Dispute ratio	Chargebacks still filed, still counted	Disputes still filed, still counted
Best for	Fraud-heavy, high-value stores	Mixed disputes, Shopify Payments stores

What does chargeback insurance actually mean?

The phrase is used for several different products, and mixing them up is how people overpay.

A fraud or chargeback guarantee. Vendors such as Signifyd, Riskified, Forter and NoFraud, now Wyllo, score each order. If the order is approved and later becomes a covered chargeback, the vendor reimburses you. This is what most sales pages mean by chargeback insurance.

Shopify Protect. Shopify's own cover for eligible US orders. It is free and built in, but only for two reason categories and only when conditions are met.

A response or recovery app. It does not insure anything. It helps you submit evidence, and you keep the result of the fight.

Alerts. Pre-dispute warnings that let you refund before a chargeback is filed. They prevent a dispute at the cost of the order.

Guarantee vendors describe their products as guarantees or protection. The legal wrapper is a contract with the vendor, and the wording of that contract decides what is covered. That is why reading the covered reason codes matters more than the label on the product.

How does a fraud guarantee work, step by step?

1. You connect the vendor to your store. It receives order data in real time.
2. It scores each order before you ship. The vendor approves, declines or sometimes asks for more information.
3. You ship only approved orders. Declined orders are lost sales. That is the hidden cost.
4. If an approved order becomes a covered chargeback, the vendor reimburses you. Often it also takes over the dispute, and it pays you whether or not it wins.
5. You pay a fee. It is usually a percentage of approved order value or revenue, sometimes with a monthly minimum.

Two features follow from this design. First, the vendor profits when it approves good orders and declines bad ones, so it has an incentive to be careful. When it is too careful, you lose real sales. Second, because the vendor pays for covered chargebacks, the contract has to say exactly which ones qualify, and every contract has exclusions.

What does a guarantee cost?

Most guarantee vendors do not publish prices. Redo's July 2026 comparison found no published rates for Signifyd, Riskified, Forter or the Kount and Midigator pair. Signifyd charges a percentage of the order total when an order is approved, with the rate varying by product, vertical, volume and ticket size. The only published rate card was NoFraud's, now Wyllo's, on its Shopify listing.

Guarantee amount	Monthly minimum	Percentage of revenue
$500	$250	1.00%
$1,000	$350	1.25%
$2,000	$450	1.50%

These apply to merchants under $50,000 a month in revenue, according to Redo's reading of the listing. Screening only, without the guarantee, is free for up to 100 orders a month after a 14-day trial.

We read the fee as the greater of the minimum and the percentage. The listing could also be read as the minimum plus the percentage, which would cost more, so ask. On our reading:

Monthly revenue	$500 tier	$1,000 tier	$2,000 tier
$10,000	$250	$350	$450
$25,000	$250	$350	$450
$40,000	$400	$500	$600

Check one line: at $40,000, 1% is $400, which exceeds the $250 minimum, so the $500 tier costs $400. At $25,000, 1% is $250, equal to the minimum. Under the other reading, at $25,000 the $500 tier would cost $250 plus $250, which is $500.

The percentage ties the fee to your revenue, not to your fraud. A store with $40,000 in sales and almost no fraud pays $400 a month for cover it rarely uses. That is the structure of insurance, and it is why the break-even sum below matters.

What does a guarantee not do?

Four limits are worth knowing before you sign.

It does not stop chargebacks being filed. Redo points out that a guarantee reimburses losses but chargebacks still arrive, so they still count toward ratios such as Visa's VAMP. If your concern is a monitoring threshold, a guarantee is not the tool for it.

It covers named reason codes only. Redo's reading of Signifyd's coverage lists credit not processed, item not received, subscription cancelled and unrecognised transactions, with item not received subject to separate eligibility rules and applying only to orders approved for guarantee. Descriptor confusion, delivery complaints and forgotten subscriptions remain your problem. Redo's advice is to get the covered reason codes in the contract, because the pages do not list them in full.

It declines some orders. Every declined good order is lost margin. A vendor that is careful with fraud may be harsh on legitimate customers who use a new card, a gift address or an international address.

The fee base is unclear. Signifyd charges on the order total at approval, and Wyllo's is described as revenue. Get the base in writing, because a percentage of revenue and a percentage of approved order value are different numbers.

What does a chargeback app do, and not do?

A response app helps you answer disputes that arrive. It reads the order, builds evidence from your records, drafts a letter and, in some tools, files it. It works on any dispute reason, because it works from your evidence, and it does not decline orders.

What it does not do: pay your losses, stop disputes being filed, screen orders or promise a result. The bank decides, and the decision is final. With ChargeFix, for example, a dispute counts as one filing the first time its evidence is saved or filed, and Shopify Payments is the only processor supported.

Prices run from free tiers to $99 a month for flat plans, or a share of wins from 15% to 25% for percentage tools. For a full comparison, see our best chargeback apps for Shopify guide.

What does each one cover?

Dispute type	Guarantee	Shopify Protect	Chargeback app	Alerts
Fraudulent	Yes, if the order was approved	Yes, if eligible	You fight it	Refund before filing
Unrecognised	Yes, per Redo on Signifyd	Yes, if eligible	You fight it	Refund before filing
Item not received	Separate eligibility rules, per Redo	No	You fight it	Refund before filing
Credit not processed	Listed by Signifyd, per Redo	No	You fight it	Refund before filing
Subscription cancelled	Listed by Signifyd, per Redo	No	You fight it	Refund before filing
Not as described or defective	Usually not, read the contract	No	You fight it	Refund before filing

The pattern is clear. Guarantees and Protect work on fraud. A response app works on everything, but only gives you a chance, not a payout. Alerts work on anything but cost you the order.

When does a guarantee pay for itself?

The sum compares the fee with the losses it removes. For a store that would otherwise fight its fraud chargebacks, the loss a guarantee removes per chargeback is the expected loss of fighting: (1 minus your win chance) times (order value plus the $15 fee).

So the guarantee breaks even when:

fraud chargebacks a month x (1 minus win chance) x (order value + $15) = guarantee fee

Solve for the number of chargebacks a month. Using a 40% win chance:

Guarantee fee	$50 order	$100 order	$300 order	$1,000 order
$250	6.4 a month	3.6 a month	1.3 a month	0.4 a month
$450	11.5 a month	6.5 a month	2.4 a month	0.7 a month

Check one cell: at $100, the expected loss per chargeback is 0.6 times $115, which is $69. A $250 fee divided by $69 is 3.6. Below about 3.6 fraud chargebacks a month on $100 orders, the guarantee costs more than the losses it removes.

This is the break-even before counting declined sales. Every good order the vendor declines raises the number you need. It also ignores the time you save by not fighting, which is real. A guarantee that removes 30 minutes of work per chargeback at $30 an hour is worth $15 more per chargeback.

The shape of the table is the main lesson. The more expensive your orders, the sooner a guarantee pays. On $1,000 orders, a single fraud chargeback every other month justifies the fee. On $50 orders, you need six or more a month.

Does your time change the break-even?

It does, and it is a fair thing to count. A guarantee removes the work of fighting as well as the expected loss, so each covered chargeback is worth the loss plus the time.

Take a $100 order, a 40% win chance and 30 minutes of work per dispute valued at $30 an hour, which is $15. The expected loss is 0.6 times $115, which is $69. Add the $15 of time and each covered chargeback is worth $84. A $250 fee then breaks even at 250 divided by 84, which is 3.0 chargebacks a month, down from 3.6.

If a response app cuts the time per dispute from 30 minutes to 8, the time you save with a guarantee shrinks to $4 a dispute, and the break-even moves back toward 3.4. So the better your response process, the weaker the case for paying someone else to remove the work. Count your own time honestly, and do not count it at all if you would not otherwise have spent it on something worth money.

How do you test a guarantee before you commit?

A guarantee is the one purchase in this series that changes who gets to ship your orders, so test it before it decides anything.

1. Run screening in shadow mode for 30 days if the vendor allows it. NoFraud, for example, lists free screening for up to 100 orders a month after a 14-day trial. Keep shipping as normal and record what the vendor would have declined.
2. Review every order it would have declined. Mark each as good or bad using your own records, including repeat customers and orders that were delivered without a dispute.
3. Count the false declines. Multiply the good orders by your margin to get the monthly cost of declines.
4. Pull your last twelve months of fraud chargebacks. Count how many were on orders the vendor would have approved. Those are the only ones it would have paid for.
5. Compare. Savings are the covered losses it would have removed. Costs are the fee plus the false declines. If savings do not beat costs with room to spare, walk away.
6. Ask for the contract and read the covered reason codes. Do this before you integrate, not after.

If the vendor will not let you test, treat that as a signal. A confident product lets you check its work.

What does the hidden cost of declines look like?

A guarantee vendor must decline some orders, and some of those would have been good. We cannot tell you what share, because it varies by vendor, store and product mix. The sum is simple, though.

Hidden cost = good orders declined x margin per order.

For an illustration only, suppose a store has 250 orders a month at $100, and a vendor declines 3% of them, which is 7.5 orders. If 4 of those were good, the store loses 4 sales. At a 40% margin that is 4 times $40, which is $160 a month. Add that to the guarantee fee and the break-even moves up.

Fee	Good orders declined a month	Margin lost	Total cost
$250	0	$0	$250
$250	2	$80	$330
$250	4	$160	$410
$250	8	$320	$570

The honest way to test this is a trial. NoFraud's screening runs free for up to 100 orders a month after a 14-day trial. Run it alongside your normal process, list the orders it would have declined and check which ones were good. If you cannot test, ask the vendor for its approval rate for stores like yours, and treat the answer as marketing until your own data confirms it.

Illustration: a high-ticket, fraud-heavy store

Lena sells electronics at a $300 average order, about 100 orders and $30,000 a month. She sees 4 fraud chargebacks a month.

Item	Per month
Exposure on 4 chargebacks	4 x ($300 + $15) = $1,260
Expected loss fighting at a 40% win chance	0.6 x $1,260 = $756
With a $19 app	$756 + $19 = $775
Guarantee, $500 tier at 1% of revenue	$300 (1% of $30,000 exceeds the $250 minimum)
Estimated cost of 2 good orders declined at a $120 margin	$240
Guarantee total	$540

The guarantee costs $540 against $775, which is $235 a month less, or $2,820 a year. Break-even at her $300 fee is about 1.6 fraud chargebacks a month on $300 orders, and Lena has 4. For her, the guarantee wins, and a response app is a useful second line for the disputes the guarantee does not cover.

The result is sensitive to the declines. If the vendor declined 6 good orders a month, the hidden cost would be $720 and the guarantee would lose. Lena should trial the screening first.

Illustration: a low-ticket store with mixed disputes

Omar sells accessories at $45 an order, about 267 orders and $12,000 a month. He sees 4 disputes: 1 fraud, 2 item not received and 1 not as described.

Item	Per month
Exposure on 4 disputes	4 x ($45 + $15) = $240
Do nothing: expected loss at a 0% win chance	$240
Fight with a $19 app at a 40% win chance	0.6 x $240 + $19 = $163
Guarantee at the $250 minimum	$250, covering at most the 1 fraud case, worth $60

The guarantee costs $250 to remove at most $60 of exposure and does nothing for three of the four disputes. The app costs $163 all in and saves about $77 a month against doing nothing. For Omar the choice is obvious. He should use a flat-fee app, or Shopify's free form, and ignore the guarantee.

Illustration: using Shopify Protect first

Carla sells skincare at $120 an order. 40% of her orders come through Shop Pay. She sees 5 fraud chargebacks a month.

Shopify Protect, per Shopify's terms, requires US business and bank account, Shopify Payments, activation before a chargeback notice, a Shop Pay card-not-present order, shipment with a supported tracking number within 7 days and an in-transit scan within 10 days. It covers only Unrecognized and Fraudulent disputes, pays the chargeback amount and waives the chargeback fee.

If 2 of Carla's 5 fraud chargebacks are on eligible orders, Protect reimburses 2 times $120, which is $240, and waives the fees. The other 3 carry an exposure of 3 times $135, which is $405. At a 40% win chance, the expected loss is 0.6 times $405, which is $243.

A $250 guarantee on top would remove an expected $243 of loss, which is about what it costs. Carla should not buy it. She should activate Protect, ship with tracking inside the windows, and use a response app for the rest. Shopify's terms also say that if a contested chargeback is later won, Shopify may debit the funds back, so keep an eye on that. For the details of what Protect covers, see our Shopify Protect versus a chargeback app and what Shopify Protect does not cover guides.

Can you use both?

Yes, and the combination makes sense in one situation: a store with both high-value fraud and a spread of other dispute types.

• The guarantee handles the fraud on approved orders and takes the sales risk.
• A response app handles item not received, credit not processed, subscription disputes and anything the guarantee excludes.
• Shopify Protect catches what it can for free in the background.

The cost is additive, so only do it when each part earns its place by your own break-even. A store that fits this profile is usually well above $30,000 a month. Smaller stores can rarely justify two paid layers.

How do you read a guarantee contract?

Before you sign, find the answer to each of these in the actual contract, not the sales page.

• Which reason codes are covered, listed by code or by name?
• What is the fee base: revenue, approved order value or something else?
• Is the fee the greater of a minimum and a percentage, or the sum of both?
• What happens to the fee on declined orders?
• Does the vendor pay the order value only, or the order plus the $15 dispute fee and any other costs?
• What is the maximum payout per order and per month, and what happens above it?
• Which payment methods and countries are covered?
• How are disputes handled if the vendor fights them, and who sees the evidence?
• How do you cancel, and does coverage continue for chargebacks on orders approved before you left?
• What do you owe if a chargeback is reversed in your favour after the vendor has paid?

A vendor that cannot answer these in plain words, in writing, is not offering you cover. It is offering you hope.

Who should choose which?

Your situation	Likely better fit	Why
High order value, fraud is most of your losses	Guarantee, after a screening trial	Break-even is low
Low order value, mixed dispute types	Flat-fee response app	The guarantee covers too little
Shopify Payments, US, Shop Pay buyers	Activate Protect first	Free
Near a ratio threshold	Alerts, prevention or fewer disputes	Neither product lowers the count after filing
Low volume, few disputes	Shopify's free form or a free plan	Nothing here pays
Fraud and mixed disputes, above $30,000 a month	Both, if each passes its own break-even	The jobs differ

Common mistakes when choosing between them

• Buying cover that does not fit your disputes. Check your last twelve months of dispute reasons before you pay.
• Ignoring declines. A guarantee that blocks good customers has a cost the invoice does not show.
• Assuming the ratio improves. Reimbursed chargebacks are still chargebacks.
• Skipping the fee base. Revenue and approved order value are not the same.
• Not activating Protect. It is free, and Shopify's terms require activation before a chargeback notice.
• Trusting a page over a contract. The covered reason codes live in the contract.
• Using a response app as if it were insurance. It improves your odds. It does not pay your loss.

What we checked, and what you should check

We read Redo's July 2026 comparison of fraud platform pricing, which reports NoFraud's rate card from its Shopify listing and Signifyd's pricing model, Shopify's Shopify Protect terms and help pages, and the pricing pages and listings of the response apps named in this series on 30 October 2026. Redo is a vendor of chargeback products and we mark its statements as its own.

What we could not confirm: whether NoFraud's fee is the greater of or the sum of its minimum and percentage, the full list of covered reason codes for any vendor and current rates for Signifyd, Riskified and Forter, none of which publish them. Ask for written quotes. Use our chargeback cost calculator and should I fight a chargeback calculator to test your own numbers.

Frequently asked questions

Is chargeback insurance worth it for a Shopify store?

It is worth it when your losses are mostly fraud on high-value orders. A fee of $250 breaks even at about 3.6 fraud chargebacks a month on $100 orders and 1.3 on $300 orders, before counting declined sales. For low-value orders and mixed dispute types, it usually costs more than it covers.

What is the difference between chargeback insurance and a chargeback app?

A guarantee screens orders and reimburses covered chargebacks on approved orders, so the vendor pays the loss. A chargeback app helps you fight disputes that arrive and never pays the loss. The first transfers fraud risk for a fee, and the second improves your chances of winning disputes.

How much does a chargeback guarantee cost?

Most vendors do not publish prices. The one published rate card we found, NoFraud's, lists a $500 guarantee at a $250 monthly minimum and 1%, a $1,000 guarantee at $350 and 1.25%, and a $2,000 guarantee at $450 and 1.5%, for merchants under $50,000 a month. Signifyd charges a percentage of approved orders.

Does chargeback insurance lower my chargeback rate?

No. A guarantee reimburses covered chargebacks but they are still filed, so they still count toward ratios such as Visa's VAMP, per Redo. Lowering the count takes fewer disputes, through clear descriptors, accurate delivery promises and fast refunds, or alerts that stop disputes before they are filed.

Does Shopify Protect replace chargeback insurance?

Only partly. Shopify Protect is free for eligible US orders but covers only unrecognised and fraudulent disputes, and it requires activation, Shop Pay and fast shipping with tracking. Anything outside those conditions, and every other dispute reason, is uncovered. Use it first, then look at what remains.

Can I use a guarantee and a chargeback app together?

Yes, if each part passes its own break-even. A guarantee covers fraud on approved orders, and a response app handles item not received, credit not processed and other reasons the guarantee excludes. Small stores rarely need both, and the combined fees can exceed the losses covered.

Will a guarantee decline my good customers?

Some, almost certainly. Vendors decline orders they judge risky, and some of those are legitimate. Ask for the approval rate for stores like yours, and test the screening on your own orders before paying. Each good order declined costs your margin on the sale and sits on top of the fee.

What should I check in a guarantee contract?

The list of covered reason codes, the fee base, whether the fee is a minimum or a sum, payout limits, how declines are treated, cancellation terms and whether coverage continues for orders approved before you leave. The contract matters more than the sales page, so ask for it in writing.

Which is better for a small store?

Usually a flat-fee response app or Shopify's free form, plus Shopify Protect if you qualify. A guarantee's minimum fee is hard to justify with few disputes and low order values. Run the break-even with your own order size and fraud count before paying for any cover.

Start free trial with ChargeFix

If most of your disputes are a mix of reasons and you take payments through Shopify Payments, a flat-fee response tool usually costs less than cover that only works on fraud. ChargeFix starts free, never takes a cut of what you win and does not decline any of your orders. It checks your evidence item by item, tells you honestly whether a case is worth fighting and drafts a letter from your real records. Nothing goes to the bank until you say so, and paid plans include a 14-day free trial.

Start free trial

Sources

• Redo: Signifyd pricing and what the other fraud guarantee platforms charge
• Shopify: Shopify Protect terms
• Shopify Help Center: overview of the chargeback and inquiry process
• Shopify Help Center: fraud and dispute monitoring programs
• Chargeflow pricing
• Chargeback.io: how alerts are charged