Chargebacks911 has published research showing that 38% of merchants say chargeback-related costs are affecting the prices they charge customers across the US, UK, and other markets.
The study found that merchants lose more than four dollars for every dollar disputed once fees, lost inventory, fraud-prevention spending, and administrative costs are included. Nearly 62% of respondents also reported that dispute volumes had risen over the past three years.
The findings point to a growing commercial impact from payment disputes, which are often treated as an issue for banks, card networks, and retailers rather than shoppers. The data suggests these costs are now being passed on more often through the prices consumers pay for everyday goods and services.
The share of merchants saying these costs influence pricing rose from 32.5% in the previous edition of the report to 38% in the latest. This suggests more businesses are struggling to absorb the expense internally as dispute volumes increase.
Chargebacks typically arise when a cardholder challenges a transaction through their bank. For merchants, the impact can extend beyond the value of the original sale, as they may also lose the goods, pay processing and dispute fees, and devote staff time to handling claims.
Monica Eaton, Founder and Chief Executive Officer of Chargebacks911, said the financial burden reaches beyond the disputed purchase itself. "Every fraudulent dispute creates costs that go well beyond the original transaction," Eaton said.
She added that businesses often have limited options once those costs build up. "When enough of those costs accumulate, businesses have little choice but to recover them somewhere else. Increasingly, that means higher prices that are paid by the honest majority of customers who had nothing to do with the problem."
Dispute growth
The report found that 73.7% of merchants that had seen dispute volumes increase also observed a rise in friendly fraud, a term used when a customer disputes a legitimate purchase. The data suggests that easier digital dispute tools offered by banks may be contributing to the trend.
In many cases, consumers can now open a dispute through a banking app with minimal effort. That lower barrier may be increasing the number of chargebacks, particularly when the process is simpler than resolving the issue directly with a retailer.
The research also identified pressure from refund abuse, which sits outside the formal card-dispute process but still adds costs for merchants. On average, respondents said abusive refund requests account for 27.1% of all returns.
Nearly one-third of those surveyed said most of their returns involve some form of abuse. A further 62% described refund abuse as a moderate or significant concern for their business.
The relationship between refunds and chargebacks leaves merchants in a difficult position. Companies that tighten return terms may reduce some refund losses but could push more customers toward formal disputes, while those that maintain flexible return policies may see abuse rise elsewhere.
Eaton said the two trends are closely linked. "Refund abuse and chargeback fraud are two sides of the same problem," she said.
She added that merchants often lack enough information to manage both effectively without affecting legitimate customers. "When merchants make returns easier to reduce formal disputes, that same simplicity gets exploited. Managing both without penalizing the vast majority of customers who have entirely legitimate reasons to return something requires a level of visibility and insight that most businesses currently cannot generate independently."
Broader costs
The research indicates that the problem may be more acute for companies selling across borders, taking instalment payments, or operating in sectors seen as higher risk. In those cases, a mix of larger transaction volumes, more complex payment arrangements, and greater exposure to fraud can make losses harder to contain.
It also suggests that many businesses still do not have a clear view of how dispute costs build across the life of a transaction. Without that visibility, the report argues, companies may act only after losses have already become significant.
Some merchants are treating the issue as a broader operating cost rather than a narrow payments problem. Eaton described that approach as the difference between reacting to individual cases and monitoring patterns across the business.
"The merchants managing this most effectively treat dispute costs as a strategic business issue to overcome," Eaton said. "Continuous measurement and real-time visibility into where losses are occurring is what allows businesses to act before costs accumulate to the point where passing them to customers feels like the only option. That is the outcome nobody wants, least of all honest consumers."