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Chargebacks911 has published research suggesting merchants may be underestimating how many chargebacks stem from friendly fraud. Its findings put merchant estimates well below figures drawn from Visa data and the company's own internal records.
The 2026 Chargeback Field Report found that merchants estimate friendly fraud accounts for 43.8% of their chargebacks on average. Visa data cited in the report suggests the figure could be as high as 75%, while Chargebacks911's internal data puts it at 86%.
Those figures come from different datasets and should not be treated as a direct like-for-like comparison. Even so, the gap points to a broader challenge for merchants in identifying whether a chargeback stems from criminal fraud, customer dissatisfaction or first-party misuse.
Friendly fraud usually begins with a legitimate purchase made by the actual cardholder. The dispute emerges later because of confusion, buyer's remorse, refund frustration or deliberate misuse, making it harder for merchants to determine the source of the claim.
That distinction matters because a transaction can pass fraud checks when the card, buyer and purchase all appear genuine. When a chargeback arrives, the information available to the merchant may still not clearly show why the dispute happened.
Chargebacks911 found that 74.4% of merchants view friendly fraud as a moderate or significant concern. Among enterprise merchants that reported a change, 83.4% said they had seen an increase in friendly fraud over the past three years.
The issue has also drawn attention in the UK retail and banking sectors. The British Retail Consortium's report Tackling Customer Fraud: Progress to Date found that when specialist teams at HSBC, Lloyds and Barclays reviewed cases retailers suspected involved first-party fraud, banks either confirmed evidence of it or found enough evidence to justify further investigation in 83% of the cases reviewed.
Monica Eaton, Founder and Chief Executive Officer of Chargebacks911, said the data suggested many businesses were directing anti-fraud spending without a clear picture of the disputes they faced.
"If you think friendly fraud represents less than half your chargebacks when the real figure could be much higher, every decision built on that assumption is potentially miscalibrated," said Monica Eaton, Founder and Chief Executive Officer of Chargebacks911. "You can spend more on fraud prevention and still spend it in the wrong places. You are not managing the problem you have but the problem you think you have."
Resource decisions
Chargebacks911 argued that criminal fraud and first-party misuse can lead to the same financial outcome for merchants, but require different responses. If a business classifies too many disputes as criminal fraud, it may focus spending on blocking transactions rather than contesting or preventing chargebacks linked to customer behaviour.
"Friendly fraud is not just being underestimated but completely misdiagnosed," Eaton said. "Criminal fraud and first-party misuse can result in the same outcome for a merchant - lost revenue - but they do not begin in the same place and they cannot always be addressed in the same way. If businesses classify too much first-party misuse as criminal fraud, they risk investing more heavily in stopping the wrong threat while failing to challenge disputes they may have been able to prevent or contest."
The report said the problem becomes more acute during periods of heavy consumer spending, when higher transaction volumes can bring more refunds and more disputes. Online merchants may be especially exposed because a valid purchase can turn into a chargeback weeks after the original sale.
Merchants need a broader view of dispute trends over time rather than focusing only on individual fraud decisions, according to Chargebacks911. That requires linking transaction, customer and dispute data and measuring outcomes across the full dispute process.
The company also argued that adding more fraud tools would not by itself solve the problem if merchants still lacked visibility into the source of disputes.
"More fraud technology will not solve a visibility problem on its own," Eaton said. "Before deciding where the next dollar of fraud investment should go, merchants need confidence that they understand the problem they are actually paying to solve."
Search interest in friendly fraud has reached an all-time high in 2026, according to Chargebacks911, which argued that the debate has shifted from whether the issue is real to whether businesses can measure it properly.
"The question is whether businesses can see it accurately enough to respond," Eaton said. "You cannot invest intelligently against a problem you cannot measure."