Chargebacks911 has published its 2026 Chargeback Field Report, based on survey data from more than 250 merchants.
The report found that 83.4% of enterprise merchants had seen an increase in friendly fraud over the past three years, while 74.4% described it as a moderate or significant concern.
Friendly fraud occurs when a cardholder disputes a legitimate transaction. The findings suggest the issue has moved beyond a narrow payments problem and is now affecting how merchants manage pricing, staffing, and customer policies.
Pricing pressure
The survey also pointed to a direct effect on consumer prices. Some 38% of merchants said chargeback costs were influencing the prices of their goods or services, up from 32.5% in the previous report.
More than 61% of respondents said chargebacks had increased over the past three years. The total cost to merchants can extend beyond the value of the original sale to include lost goods, lost revenue, fees, fraud prevention spending, and staff time used to investigate and respond to disputes.
Refund abuse emerged as another pressure point. Merchants estimated that abusive requests accounted for 27.1% of all returns, while 62% said refund abuse was a moderate or significant concern.
Monica Eaton, Founder and Chief Executive Officer of Chargebacks911, linked the trend to wider business decisions.
"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," Eaton said.
AI uptake
The study also examined how merchants are responding to fraud and disputes through technology. It found that 26.7% currently use AI-based fraud prevention tools and a further 37% plan to adopt them, bringing the combined share to nearly two-thirds.
That uptake comes as merchants face changes tied to Visa's Acquirer Monitoring Program, or VAMP. One in five respondents said VAMP-related changes had directly affected their business, while nearly one-third did not know whether they had been affected.
Only 26.8% said they actively monitored TC40 fraud records to track their VAMP ratio. The figures suggest many merchants are still adapting to card network compliance demands while also dealing with rising dispute volumes.
Alternative payment methods added another layer of concern. Around 19.1% of surveyed merchants accepted buy now, pay later payments, and nearly four in 10 said they believed BNPL could increase chargeback exposure.
Operational gaps
The report highlighted weaknesses in how merchants organise chargeback management. Only about 34% of respondents said they had a dedicated chargeback team or department head, despite growing concern about friendly fraud and dispute volumes.
Fewer than 30% said they used any form of third-party assistance. In many businesses, these tasks sit with staff in finance, operations, or customer service rather than specialist dispute teams.
Evidence gathering also appears fragmented. About 23.5% of merchants said they used five or more separate tools to investigate disputes or compile representment evidence, drawing information from payment gateways, customer service platforms, customer relationship management systems, and order management software.
Knowledge of card network rules was also uneven. Fewer than one in four merchants described their teams as very up to date on network requirements, and among small businesses only 17.4% said they felt very informed.
The survey also looked at fraud risks inside merchant organisations. Nearly one-quarter of respondents said they had experienced employee-initiated fraud or in-house collusion, yet fewer than four in 10 said they actively monitored for it.
David Pirtle, Vice President of Enterprise Engagement at Chargebacks911, said the data showed the strain on merchant operations.
"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, Vice President of Enterprise Engagement at 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," Pirtle said.