Friendly fraud—when cardholders dispute legitimate transactions—has become a material business risk for retailers. More than eight in 10 retailers have reported an increase in friendly fraud (Digital Commerce 360 - AI), and 74.4% of retailers describe it as a significant concern (Digital Commerce 360 - AI). Among merchants who reported a change in friendly fraud over the past three years, 73.7% said the problem had worsened, rising to 83.4% among enterprise merchants (Digital Commerce 360 - AI).
The financial impact is substantial and driving merchant behavior. More than 61% of chargebacks have increased over the past three years (Digital Commerce 360 - AI), and 38% of merchants said chargeback costs have influenced their pricing—up from 32.5% the prior year (Digital Commerce 360 - AI). In response, about two-thirds of merchants currently use AI-based fraud-prevention tools or plan to adopt them, with 26.7% already deployed and 37% planning adoption (Digital Commerce 360 - AI). For commerce practitioners, this signals both a competitive necessity and a pricing lever: AI-driven chargeback mitigation is moving from optional to standard, while the cost burden increasingly flows to honest customers through higher prices and stricter policies.