For more than a quarter century, business and industry have used risk-based matrices to quantify probability and consequences in decision making. However, this tool has not yet been applied to the heat exchanger design process. Adding a design margin to the calculated size of an exchanger is common practice. This margin represents the added heat exchanger area necessary to provide confidence that the exchanger will operate as required throughout its run cycle. An assumption is made that the additional area will not have a deleterious impact on performance. This report introduces the concept of a risk-based design margin selection process as a quantitative aid in separating the individual components that comprise the uncertainty in heat exchanger design. In addition, it provides a technique to help the designer determine a reasonable,cost-effective margin to apply to the heat exchanger. Two example cases show the application of the procedure.