Survey: Online merchants report spiking 'friendly fraud' in recent years
“Friendly fraud” is on the rise, representing a significant concern for merchants.
That’s according to the 2026 Chargeback Field Report from Chargebacks911, which found that 83% of enterprise merchants reported an increase in cardholders disputing a legitimate transaction over the past three years.
Nearly three-quarters (74.4%) of merchants now describe "friendly fraud” as a moderate or significant concern. Among respondents who reported a change in first-party fraud over the past three years, 73.7% said the problem had increased. The figure rises to 83.4% among enterprise merchants.
More than six-in-10 respondents say chargebacks have increased over the past three years. Meanwhile, 38% say the costs associated with chargebacks have influenced the prices of their goods or services, up from 32.5% in Chargeback911’s previous report.
The report also noted that merchants estimate that abusive requests account for 27.1% of all returns, while 62% describe refund abuse as a moderate or significant concern.
[READ MORE: Study: Total cost of fraud now exceeds $5 for every $1 of direct loss]
“Friendly fraud has moved from being a back-office inconvenience to a material business risk,” said Monica Eaton, founder and CEO 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.”
The report noted that merchants are leveraging technology to try and crack down on fraud. More than one-quarter (26.7%) of merchants say they currently use AI-based fraud prevention tools, while another 37% plan to adopt them. Combined, nearly two-thirds of respondents are either using or preparing to use AI in their fraud-prevention strategies.
Additional insights from the survey include the following:
- Only about 34% of respondents say they have a dedicated chargeback team or department head, while fewer than 30% use any form of third-party assistance.
- Approximately 23.5% of merchants report using five or more separate tools to investigate disputes or compile evidence.
- Fewer than one-in-four merchants describe their teams as “very” up to date on card network rules. Small businesses report the lowest confidence, with just 17.4% saying they feel very informed.
- Approximately 19.1% of merchants surveyed accept buy now, pay later (BNPL) payments, though nearly four-in-10 respondents believe BNPL can increase chargeback exposure.
“Merchants are being asked to manage a rapidly changing risk environment with limited staff, disconnected systems and incomplete visibility into where their losses originate,” said David Pirtle, VP of enterprise engagement for Chargebacks911. “That is why reliable industry benchmarks are so important. This report gives merchants a clearer way to identify operational gaps, compare their performance with the wider market and determine whether their chargeback strategy is actually protecting revenue.”
Chargeback911’s report is based on proprietary survey data from more than 250 merchants.
