Friendly fraud is intensifying across the payments landscape, with more than 83% of enterprise merchants reporting an increase over the past three years, according to a 2026 Chargeback Field Report from Chargebacks911.
The findings show that friendly fraud—when a cardholder disputes a legitimate transaction—is no longer being treated as an isolated loss or occasional cost of doing business. Nearly three-quarters of merchants (74.4%) now describe it 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.
“Friendly fraud has moved from being a back-office inconvenience to a material business risk,” says 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.”
Key takeaways:
· More than 61% of 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 the previous report.
· The cost of chargebacks can include lost merchandise, lost transaction revenue, chargeback fees, fraud-prevention expenses and the labor required to investigate and respond to disputes.
· Merchants estimate that abusive requests account for 27.1% of all returns, while 62% describe refund abuse as a moderate or significant concern.
· More than one-quarter of merchants (26.7%) 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.
· At the same time, merchants are navigating substantial changes to card network monitoring requirements. One in five says changes associated with VAMP have directly affected their business, while nearly one-third do not know whether they have been affected. Only 26.8% say they actively monitor TC40 fraud records to help track their VAMP ratio.
· Approximately 19.1% of merchants surveyed accept BNPL payments. However, nearly four in 10 respondents believe BNPL can increase chargeback exposure.
· 34% of respondents say they have a dedicated chargeback team or department head, while fewer than 30% use any form of third-party assistance. These internal responsibilities often fall to employees in finance, operations or customer service.
· Approximately 23.5% of merchants report using five or more separate tools to investigate disputes or compile representment 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.
· Nearly one-quarter of respondents report experiencing employee-initiated fraud or in-house collusion, yet fewer than four in 10 say they actively monitor for it.
