New data from Chargebacks911 shows that so-called “friendly fraud,” where shoppers dispute legitimate transactions, is on the rise and is becoming increasingly costly for merchants.
In its 2026 Chargeback Field Report, the group’s research showed that more than 83 percent of enterprise merchants are reporting an increase in friendly fraud over the past three years. Authors of the report said the findings show that the phenomenon “is no longer being treated as an isolated loss or occasional cost of doing business.”
“Nearly three-quarters of merchants, or 74.4 percent, now describe it as a moderate or significant concern,” the report stated, adding that among respondents who reported a change in first-party fraud over the past three years, 73.7 percent said the problem had increased.
“Friendly fraud has moved from being a back-office inconvenience to a material business risk,” said Monica Eaton, founder and chief executive officer of Chargebacks911. “It is influencing pricing, customer policies, staffing decisions and the economics of digital commerce. The problem is growing faster than many merchants’ ability to identify, measure and manage it.”
Regarding the overall state of chargebacks, the report found that more than 61 percent of respondents say chargebacks have increased over the past three years, while 38 percent of those polled said the costs associated with chargebacks have influenced the prices of their goods or services, which is up from 32.5 percent in last year’s survey.
The cost associated with chargebacks includes lost merchandise and lost transaction revenue, as well as chargeback fees. Other costs include fraud-prevention expenses and the labor required to investigate and respond to customer disputes.
Eaton said chargebacks “rarely cost merchants only the value of the original transaction. Once all factors are considered, the financial impact can multiply quickly and honest customers ultimately absorb part of that burden through higher prices or stricter policies.”
“Refund abuse adds even more pressure by exploiting the customer-friendly processes merchants put in place to prevent disputes,” Eaton added. The report from that abusive requests for refunds account for 27.1 percent of all returns, while 62 percent describe refund abuse “as a moderate or significant concern.”
This year, the Chargeback Field Report expanded its analysis to include AI adoption, buy now, pay later (BNPL) transactions, internal fraud and the effects of Visa’s Acquirer Monitoring Program (VAMP).
The survey showed that 26.7 percent of respondents currently use AI-based fraud prevention tools, while 37 percent said they plan to adopt them. “Combined, nearly two-thirds of respondents are either using or preparing to use AI in their fraud-prevention strategies,” the report noted.
Simultaneously, retailers and brands said they are navigating significant changes to card network monitoring requirements. One in five respondents said changes associated with VAMP have directly affected their business, “while nearly one-third do not know whether they have been affected. Only 26.8 percent say they actively monitor TC40 fraud records to help track their VAMP ratio.”
And with BNPL, 19.1 percent of those polled said they accept these types of payments, while 40 percent reported that BNPL can increase chargeback exposure.
