News from the Wire

2024 Chargeback Field Report published

Tuesday, November 05, 2024 — 12:32:05 (EST)

LONDON, United Kingdom, Nov. 4, 2024 — Chargebacks911, the global chargeback technology leader, has found that 72% of merchants have experienced an increase in chargebacks over the past three years, with many businesses raising prices to offset the growing costs. These recently released findings come as the payments industry grapples with the fact that illegitimate disputes by cardholders through card-not-present (CNP) transactions are outpacing the growth of eCommerce sales.

The findings from the 2024 Chargeback Field Report, which surveyed 300 retailers, from small businesses to enterprise merchants., emphasise that the rise in chargebacks—driven largely by first-party misuse (also known as “friendly fraud”)—is having a direct impact on pricing strategies across industries.

According to the report, presented in partnership with Edgar, Dunn & Company, 57% of merchants who observed changes in chargebacks noted an increase in frequency, with an average spike of 18%. As a result, nearly one-third of respondents admitted that the financial burden of managing these disputes has forced them to increase prices on goods and services.

“The rise in chargebacks is becoming a vicious cycle,” said Monica Eaton, CEO of Chargebacks911. “Merchants are raising prices to cover the cost of disputes, but in turn, this pricing pressure gives more incentive to those inclined to commit first-party misuse. The data clearly shows that friendly fraud is the real issue, far surpassing criminal fraud in many sectors.”

The report highlights a shift away from concerns over criminal fraud, with friendly fraud becoming the leading cause of chargebacks for many merchants. Nearly half of the respondents estimated that friendly fraud was responsible for at least 50% of their chargebacks, and 45% of those surveyed believed that customer misunderstandings—like not recognising transactions on billing statements—were a key driver.

Moreover, many merchants are struggling to effectively combat these illegitimate claims. While 75% of participants reported challenging some chargebacks, nearly half admitted that they don't track second-cycle disputes, which suggests their recovery rates may be lower than expected.

In response to the rise in chargebacks, many merchants are turning to new technologies and strategies to mitigate losses. Two-thirds of survey respondents reported either using or planning to implement AI-powered fraud prevention tools. Despite these efforts, the report warns that businesses must do more to address the underlying issue of first-party misuse and better educate consumers on the proper use of chargebacks.

“Merchants need to be proactive, not just reactive,” added Eaton. “By employing better chargeback prevention tools and leveraging professional dispute management services, businesses can reduce their exposure to friendly fraud and regain control over their bottom line.”

To view the 2024 Chargeback Field Report in its entirety, visit www.chargebacks911.com/chargeback-field-report.

For more information on Chargebacks911, visit www.chargebacks911.com.

ENDS

About Chargebacks911

Chargebacks911® is the global leader in chargeback prevention and remediation technology. As a platform provider to merchants and financial institutions, Chargebacks911 is the first global company fully dedicated to providing an end-to-end platform specifically designed to counter post-transactional fraud and chargeback misuse. Today, Chargebacks911 safeguards more than 2.4 billion transactions per year on behalf of clients in 87 countries around the world, supporting over 2.5 million merchants. For details on Chargebacks911’s comprehensive dispute management solutions, visit chargebacks911.com.

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Source: Company press release.