Friendly fraud accounts for 43.8% of the chargebacks merchants absorb, according to the 2026 Chargeback Field Report from Clearwater, Fla.-based Chargebacks911.
The report, built on responses from more than 250 merchants, found that 83.4% of enterprise merchants reported an increase in friendly fraud over the past three years. Seventy-seven percent of mid-market merchants and 55% of small businesses said the same, for an overall average of 73.7%. By comparison, 61.8% of merchants said total chargeback volume rose over the same period.
Chargebacks911 said merchant estimates understate the problem. The company said its internal data show 86% of the chargebacks it handles stem from friendly fraud, while it cited Visa Inc. data putting the figure at 75%.
Intentional chargeback fraud ranked as the top concern, cited by 53.7% of merchants, followed by buyer’s-remorse chargebacks at 39%, learned chargeback-abuse behavior at 37.5% and chargebacks filed while a refund is pending at 36.8%. Nearly one-quarter of merchants reported in-house collusion involving employees, and 53.5% either do not monitor for it or do not know whether it is monitored.
Recovery remains limited. While 76.8% of merchants said they contest at least some friendly fraud chargebacks, rising to 96.6% among enterprise respondents, the report put the average net recovery rate at 10.7% of cases once wins escalated to a second chargeback cycle are counted. Evidence collection was named the biggest operational obstacle by 29% of respondents, and 23.5% said they use five or more separate systems to compile representment evidence. Only 34.1% reported having a dedicated chargeback team.
Costs are moving downstream. Thirty-eight percent of merchants said chargeback expenses have influenced the prices they charge, up from 32.5% in 2024. Refund abuse, which does not involve the chargeback process, accounts for 27.1% of returns on average, and 62% of merchants called it a moderate or significant concern.
Merchants put their average chargeback rate at 0.57% of transactions, with 25.4% reporting rates of 0.9% or higher. More than half said they have little to no knowledge of current card network rules, and 20% said changes to Visa’s Acquirer Monitoring Program affected their business. Roughly 27% said they use AI-based fraud detection tools, and 37% said they plan to.
