News Image

Make it easier for customers to reach out to your business by providing contact information that is easily visible to your customers. Provide personal and exceptional customer service.

The U.S. has the dubious distinction of comprising 42% of eCommerce fraud worldwide.(1) In 2022, the loss to consumers due to fraud ticked up to $8.8 billion, an increase of 44% from 2021.(2) And for online retailers in 2022, their loss amounted to $17.22 billion, with predictions of $20.6 billion in losses for 2023.(2) When customers feel a merchant has wronged them, there are several avenues toward restitution. They could request an exchange or a refund directly from the retailer if an item is damaged or doesn’t deliver as promised, cancel a subscription for a service, or reach out directly to their bank to get their money back. The latter is known as a chargeback, and when done out of convenience, mistake, or without first attempting to resolve the disputed charge directly with the retailer, this type of chargeback is commonly coined “friendly fraud” or “first-party fraud.” Monica Eaton is the Founder of Chargebacks911, which has done the research. The bad news for eCommerce businesses is that chargebacks have been escalating year over year. The bad news for consumers is that merchants are forced to raise their prices as a result of frivolous chargebacks. The bad news for banks is that more chargebacks equate to increased expectations, more penalties and compliance fines, and ultimately more write-offs and loss of business (both for the consumer’s and retailer’s bank).

A few statistics: In 2023, a projected 61% of all eCommerce chargebacks will be the result of friendly fraud. Each chargeback costs the merchant an average of $128. The not-so-grand total for merchants annually is $48.02 billion.(3) So, who’s to blame? It’s an easy conclusion to fault consumers. But friendly fraud is called “friendly” for a reason. It’s easy to jump online and make a spontaneous purchase without a second thought. Then, upon reviewing banking records, the impromptu purchase doesn’t ring a bell to the person who ordered it (or the person reviewing the bill). Billing descriptions are often vague or may reflect the name of a parent company that doesn’t look familiar, and people often panic and conclude it must be fraud. And then there are the unscrupulous who take advantage of a well-intentioned yet flawed system.

Often it’s more convenient for a customer to contact their bank and bypass the retailer. After all, the retailer will want an explanation; they may hem and haw and may say “no.” They naturally don’t want to lose revenue or a customer. Eaton observes, “Banks are making it a lot easier for customers to dispute charges; they want to keep their customers happy, and with the growth of dispute inquiries, an increasingly competitive landscape, and the ever-evolving demands of their cardholders, banks have no choice but to make the process as easy as possible for their customers. So, many consumers decide to call their bank because they mistakenly believe it’s basically the same as requesting a refund from the merchant, with the added upside of getting a faster resolution.” According to a survey conducted by Chargebacks911, 40% of consumers who commit friendly fraud admit they would do it again within 60 days.(3)

So, who is the biggest loser in all of this? commissioned a report called “The Chargeback Triangle,” which researched the effects of chargebacks on the consumer, merchant, and credit issuer. Not surprisingly, merchants are hardest hit as a result of losing sales, unreturned merchandise, chargeback fees, and lost customers. Issuers are also negatively affected, incurring billions of dollars in losses for writing off transaction disputes that cost too much to pursue, even though they are reimbursable chargebacks. And as for consumers, they find themselves paying more at checkout, suffering unnecessary declines, and experiencing backlash in the form of more restrictive policies aimed at protecting retailers from suffering additional loss. The same report found that more than 80% of chargebacks could have been prevented had the customer contacted the retailer first.(4)

Chargeback remediation is the only effective measure to reverse this downward trend. Chargeback management solutions assist merchants and financial institutions with workflow automation tools to enable the seamless exchange of chargeback-related data, reducing the time and resources required to interpret and proactively respond to chargebacks. Eaton offers some advice to online retailers, “Make it easier for customers to reach out to your business by providing contact information that is easily visible to your customers. Provide personal and exceptional customer service. Ensure that your return policies, shipping costs, fees, and sales tax are explained up-front and easily understood. And have a strategy in place.”

Chargebacks911 has over a decade of leadership in the industry. It provides global, configurable, and agnostic solutions that assist merchants and financial institutions with tools that standardize and automate otherwise manual processes every step of the way. Eaton advises merchants, “Responding to Chargeback requests is not only a means to recover revenue lost to illegitimate chargebacks, but it is also your duty to protect your reputation with banks and consumers. If you accept chargebacks as a cost of doing business, you are forgoing your rights and obligation to exchange much-needed information to the detriment of the industry.”

About Chargebacks911

Chargebacks911 is a global leader in chargeback management and remediation technology. As a provider or supplier to financial technology companies and financial institutions, Chargebacks911 safeguards more than 2.4 billion transactions per year on behalf of clients in 87 countries around the world. For details on Chargebacks911’s comprehensive dispute management solutions, visit


1. McDonald, J. (2022, November 15). Merchants expected to lose $41 billion to ecommerce fraud globally in 2022. The Fraud Practice. Retrieved April 20, 2023, from
2. O’Brien, S. (2023, March 1). Fraud cost consumers $8.8 billion last year, Federal Trade Commission says. that’s up 44% from 2021. CNBC. Retrieved April 20, 2023, from
3. Friendly fraud cost: What do you lose to chargeback abuse? Chargebacks911. (2022, June 27). Retrieved April 20, 2023, from,Fees%20%26%20Penalties,they%20pass%20along%20to%20you
4. Katz, M. (2018, September 30). Solving the chargeback triangle. PaymentsJournal. Retrieved April 20, 2023, from

Share article on social media or email: