| Scenario | Transactions | Avg Value | Attempt % | Success % | Recovery % |
|---|---|---|---|---|---|
| Low-risk month | 25,000 | $35 | 0.6 | 18 | 15 |
| Typical baseline | 50,000 | $45 | 1.2 | 25 | 12 |
| Promotional spike | 80,000 | $52 | 1.8 | 30 | 10 |
| Elevated attack wave | 60,000 | $60 | 2.4 | 35 | 8 |
- Processed Volume = Transactions × Average Value
- Fraud Attempts = Transactions × Attempt Rate
- Successful Cases = Fraud Attempts × Success Rate
- Gross Fraud Amount = Successful Cases × Average Value
- Recoveries = Gross Fraud Amount × Recovery Rate
- Net Fraud Amount = Gross Fraud Amount − Recoveries
- Chargeback Fees = (Successful Cases × Chargeback Rate) × Chargeback Fee
- Investigation Cost = Successful Cases × Investigation Cost per Case
- Manual Review Cost = (Transactions × Review Rate) × Cost per Review
- Friction Loss (proxy) = Reviewed × False Positives × Avg Value × Friction Loss Rate
- Total Estimated Loss = Net Fraud + Fees + Operations + Friction
- Loss (bps) = (Total Loss ÷ Volume) × 10,000
Rates are percentage inputs and are converted to ratios in calculations.
- Choose your period label and currency display.
- Enter your transaction volume and average value.
- Set attempt and success rates from recent fraud reporting.
- Add recovery rate based on refunds, seizures, or collections.
- Include fees and operational costs for a fuller estimate.
- Review the scenario table to stress-test assumptions.
- Download CSV or PDF to share with stakeholders.
For budgeting, run the calculator across multiple periods and compare.
FAQs
1) What does this estimator calculate?
It estimates expected fraud-related losses for a chosen period, combining net fraud amount, chargeback fees, investigation effort, review cost, and a simple friction proxy.
2) How do I pick attempt and success rates?
Use your measured rates from recent periods, segmented by channel if possible. If you lack data, start conservative, then run Low/Base/High scenarios to bound the outcome.
3) What is the difference between attempt and success rate?
Attempt rate is how often fraud is tried. Success rate is how often attempts get through controls and become confirmed losses.
4) Why include chargeback fees separately?
Even when the fraud amount is refunded, you may still pay network or processing fees per chargeback. Separating them helps explain cost drivers to finance teams.
5) What does recovery rate represent?
It represents money recovered after losses occur, such as clawbacks, reimbursements, or successful collections. Higher recovery reduces net fraud amount but not always fees or operations.
6) Is friction loss a real accounting value?
No. It is a proxy to highlight business impact when legitimate transactions are blocked. Replace it with your own measured abandonment or goodwill costs if available.
7) Can I model a new control or rule change?
Yes. Adjust success rate, review rate, or false positive rate to reflect the change. Compare Base vs. High/Low to estimate how sensitive losses are to that control.
8) How should I interpret basis points?
Basis points express loss as a share of processed volume. For example, 50 bps equals 0.50% of volume, making it easier to compare across periods and business sizes.