Nearly 44% of Chargebacks Are Labeled Friendly Fraud, Finds a Chargebacks911 Report

First-party fraud, often called friendly fraud, is the bane of online retailers. Chargeback management provider Chargebacks911 says friendly fraud accounts for 43.8% of total chargebacks in its 2026 Field Report.

Relying on responses from more than 250 merchants, the report also finds 83.4% of enterprise merchants reported an increase in friendly fraud in 2026. Seventy-seven percent of mid-market merchants say friendly fraud increased as did 55% of small business ones. Visa Inc. defines friendly fraud as instances when a cardholder makes a legitimate purchase and then falsely disputes the charge to get a refund while retaining what was purchased, whether intentional or unintentional.

Clearwater, Fla.-based Chargebacks911 says its internal data show 86% of all chargebacks it handles are a result of friendly fraud. This type of fraud could be clearly unauthorized transactions, but may range to merchant errors and valid customer disputes, Chargebacks911 says.

“In between sits a range of cases where attribution depends on the specific circumstances of the transaction. As a result, the ‘blame’ often falls somewhere along a continuum rather than on one party (this includes banks, typically ones using AI.) This overlap makes it difficult to definitively classify every claim,” the report says.

Though it may be difficult to classify every claim, there are trends in the categories of friendly fraud. In the report, 53.7% of merchants say intentional chargeback fraud is a top concern, followed by buyer’s-remorse chargebacks, 39%, and learned chargeback-abuse behavior, 37.5%.

These categories may account for much of the friendly fraud, but they also may manifest when cardholders exploit perceived loopholes, seek to reverse unwanted purchases, or follow patterns they’ve observed in other environments, Chargebacks911 says.

“These patterns are also reflected in prior research. Findings from the 2025 Cardholder Dispute Index indicate that cardholders are often unwilling to wait several days for a refund, driven in part by the mistaken belief that chargebacks are equivalent to refunds. From the merchant’s perspective, however, these two types of payment reversals are substantially different,” the report says.

One bit of good news when it comes to rising chargebacks is that nearly 80% of merchants say they are using at least one preventive measure, Chargebacks911 says, implying chargeback management could be migrating to a core effort, instead of being a strictly back-office function.