Chargebacks Are Costing Merchants More As Consumers Look to Their Bank First to Resolve Disputes

Chargebacks cost U.S. merchants more than $170 billion annually, according to Chargebacks911’s 2025 Cardholder Dispute Index.

The average dollar value of a transaction disputed with a consumer’s bank over the prior 12 months was $84, a 10.5% increase from 2024. The top reason for chargebacks is unauthorized transactions on a consumer’s billing statement. Indeed, more than 55% of consumers surveyed cited unauthorized transactions as the primary reason to dispute a purchase.

Attempting, but failing, to reach a merchant about a questionable transaction is the second most popular reason for disputing a transaction, cited by 41.2% of respondents. The third most common reason is that the merchant overcharged the consumer or charged the consumer’s account multiple times for the same transaction (22.8%). Consumers could cite more than one reason for a dispute.

A provider of chargeback-management solutions, Chargebacks911 surveyed more than 1,200 cardholders in the United States and the United Kingdom.

On average, survey respondents say they have disputed slightly more than 5 transactions with their bank in the past 12 months. Breaking responses down by gender revealed women dispute about 20% more transactions than men, a 15% decline from the prior year. The percentage of men disputing a transaction remained “fairly static,” according to the report.

When asked if they have ever disputed a transaction first with their bank without contacting the merchant, 48.2% of respondents replied yes. Consumers also rely heavily on their bank when attempting to cancel or dispute a subscription, the report says.

With the U.S. Court of Appeals for the 8th Circuit last week striking down the Federal Trade Commission’s ruling that would have made it easier for consumers to cancel subscriptions, merchants should be aware that consumers are likely to continue relying first on their bank to reverse a subscription charge, the report says.

Consumers who have successfully disputed a transaction through their bank are far more likely to turn to their bank to resolve future disputes. Some 89% of respondents say trust their bank to resolve a transaction dispute with a merchant. Of that group, 88% say they would turn to the bank first to resolve future disputes.

The appeal for consumers who rely on their bank first is the convenience or doing so and the bank’s ability to quickly issue a credit or refund. “That’s tough for merchants to match because a lot more goes on behind the scenes for them when it comes following chargeback processes,” than it does for a bank, says the Chargebaks911 spokesperson.

To help prevent consumers from turning to their bank first, Chargebacks911 recommends merchants be more accessible to consumers, provide clear chargeback terms, and make it easier to obtain a refund. “For merchants, the chargeback process is a guilty-until-proven-innocent scenario, because the weight is on them to disprove the disputed transaction,” the Chargebacks911 spokesperson says.