The package arrived on Tuesday. The customer opened it, liked it, and kept it. On Friday, they told their bank it never showed up. The bank refunded them, charged you a dispute fee, and logged a strike against your merchant account. You lost the product, the sale, and another $25 on top.
That is friendly fraud, and in 2026 it is officially your biggest fraud problem. Not stolen cards. Not bots. Your own customers.
The numbers just crossed a line
The 2026 Chargeback Field Report from Chargebacks911, built on survey data from more than 250 merchants, puts hard numbers on what store owners have been feeling for a while. Among merchants who saw a change in first-party fraud over the past three years, 73.7% said it increased. For enterprise merchants, that figure jumps to 83.4%.
Nearly three quarters of all merchants, 74.4%, now call friendly fraud a moderate or significant concern. And according to LexisNexis research cited in the report, first-party fraud has passed scams as the leading form of fraud globally.
Read that again. The top fraud threat worldwide is not a hacker in a hoodie. It is a legitimate cardholder disputing a legitimate purchase.
Why honest-looking customers dispute real charges
Blame convenience. Filing a dispute used to mean a phone call and a form. Now it is two taps in a banking app, often faster than finding your store’s contact page. Some customers genuinely forget a purchase or fail to recognize a billing descriptor. Plenty of others know exactly what they are doing.
Refund abuse feeds the same machine. Merchants in the report estimate that 27.1% of all return requests are abusive, and 62% call refund abuse a moderate or significant concern. Buy now, pay later adds another wrinkle: nearly four in ten merchants believe BNPL increases their chargeback exposure.
The cost does not stay contained. 38% of merchants say chargeback costs are now influencing the prices of their goods and services, up from 32.5% in the previous report. Honest customers are paying for dishonest ones. Friendly fraud also rarely travels alone, which is why it sits alongside the schemes covered in our breakdown of the seven security threats targeting small stores in 2026.
Most stores are fighting this blind
Here is the uncomfortable part of the report. Only about 34% of merchants have a dedicated chargeback team or department head. Fewer than 30% use any third-party help. Disputes usually land on whoever is closest, someone in finance or customer service with no training in card network rules or evidence requirements.
It gets messier. 23.5% of merchants juggle five or more separate tools just to pull together evidence for a single dispute. Fewer than one in four describe their teams as very up to date on card network rules. Among small businesses, that confidence drops to 17.4%.
What to do: give chargebacks one owner, even part time. Centralize your evidence sources so order data, delivery confirmations, and customer communications live in one place. An hour spent learning representment basics pays for itself with the first dispute you win.
Five moves that actually reduce disputes
1. Fix your billing descriptor
If your legal entity name shows up on statements instead of your store name, you are generating disputes for free. Make the descriptor match what customers saw at checkout.
2. Prove delivery, every time
Tracking on everything. Signature or photo confirmation on high-value orders. “Item not received” is the easiest claim to file and the easiest to beat when you have proof.
3. Be easier to reach than the bank
A customer who gets an answer from you in minutes has no reason to open a dispute. Fast, always-on support is one of the strongest chargeback deterrents there is, and it is exactly the problem AI chatbots for e-commerce customer support were built to solve.
4. Fight every winnable dispute
Merchants who never respond teach the system they are a soft target. Submit representment evidence on every dispute you can document. Win rates compound as your evidence process improves.
5. Watch your fraud ratios before Visa does
One in five merchants says Visa’s Acquirer Monitoring Program has already affected their business, and nearly a third do not know whether it has. Only 26.8% actively monitor TC40 fraud records. Ask your processor for your numbers this week. Crossing VAMP thresholds means fines and, in bad cases, losing the ability to process cards at all.
The AI arms race is already here
26.7% of merchants now use AI-based fraud prevention tools and another 37% plan to adopt them, which means nearly two thirds of the market is heading the same direction. That makes sense, because the other side is using AI too. We covered how AI-driven fraud is surging across e-commerce, and first-party abuse is increasingly part of that toolkit.
You do not need an enterprise budget to start. Most modern payment processors bundle machine learning risk scoring. Turn it on, tune the thresholds, and review what it flags weekly.
The takeaway
Friendly fraud thrives on merchants who treat each dispute as bad luck instead of a process failure. The stores winning in 2026 treat disputes like any other business metric: owned by someone, measured monthly, and attacked with evidence.
Your customers’ bank gives them a button to take money back from you. Your job is to make sure that button stops working for the ones who do not deserve it.
