Chargeback Fraud Statistics 2026: Trends, Losses & Industry Insights

Chargeback fraud is accelerating across every metric that matters: volume, value, and sophistication. Global chargebacks will hit 261 million transactions in 2025 and are projected to reach 324 million by 2028, with merchants losing $15 billion annually to fraudulent disputes alone, according to Mastercard’s 2025 Global Chargebacks Outlook.

For UK businesses, the picture is steadier in value but worse in volume. Card fraud on UK-issued cards reached £594.9 million in 2025, flat on the restated £592.5 million for 2024, but card-not-present fraud cases rose 13% to about 3.2 million, according to UK Finance. For the wider picture on how UK payment methods are shifting, including contactless adoption and mobile wallet growth, see our mobile payment statistics guide.

This guide compiles the most current, verified chargeback statistics from Mastercard, UK Finance, Chargebacks911, Juniper Research, and LexisNexis. Every figure includes its source and data year so you can assess reliability for yourself.

Key Global Chargeback Statistics (2025–2028)

Global chargebacks are projected to grow 24% from 261 million transactions in 2025 to 324 million by 2028, with total chargeback value rising from $33.8 billion to $41.7 billion according to Mastercard’s 2025 Global Chargebacks Outlook produced in partnership with Datos Insights. Merchants now lose $15 billion annually to fraudulent disputes alone.

The cost compounds far beyond the disputed transaction amount – LexisNexis’s 2026 study shows each dollar of fraud costs US retail and ecommerce merchants about $5.13 when processing fees, lost goods, shipping, and administrative time are included. In the UK specifically, card fraud on UK-issued cards reached £594.9 million in 2025, with card-not-present fraud cases rising 13% year-on-year according to UK Finance. Merchants identify 45% of their chargebacks as fraudulent, and friendly fraud – where customers dispute legitimate charges – is one of the main drivers.

The most authoritative source for global chargeback data is Mastercard’s annual Global Chargebacks Outlook, produced in partnership with Datos Insights. Here are the headline figures for 2025.

Sources: Mastercard / Datos Insights, “2025 Global Chargebacks Outlook” (March 2025); Juniper Research, “eCommerce Fraud Prevention Market 2025–2030″ (2025).

The regional breakdown shows the fastest chargeback growth in the Middle East & Africa (+59%) and Asia Pacific (+35%), though North America still accounts for the largest share of total volume. By 2028, North American chargebacks alone are projected to reach $20.5 billion in value.

Mastercard’s data also reveals that digital purchases represent 63% of merchant transactions – the channel most vulnerable to chargebacks. As digital payments grow, so does the dispute surface area.

UK Chargeback and Card Fraud Statistics

UK card fraud hit £594.9 million in 2025, with card-not-present fraud cases up 13%. The industry prevented £1.68 billion of unauthorised fraud – stopping 70p in every £1 of attempted fraud.

UK Finance’s Annual Fraud Report 2026 provides the definitive data on card fraud affecting UK merchants and consumers. These figures cover 2025.

Source: UK Finance, Annual Fraud Report 2026 (published June 2026, covering 2025 data).

The most striking figure is the 13% rise in CNP fraud cases against only a 3% rise in CNP losses. Fraud is happening more often at lower average values: UK Finance puts the average remote purchase case at £132 in 2025, down from £300 in 2016.

UK Finance also reports that internet and e-commerce card fraud losses rose 9% to £250.8 million in 2025, driven largely by card details stolen in data breaches at third parties such as retailers. A merchant cannot stop a breach elsewhere, so checkout controls that catch stolen details matter.

For UK merchants processing card payments, understanding these trends is essential for choosing the right merchant account provider and negotiating appropriate fraud protection terms. Providers like Stripe and Square include fraud detection as standard, but the tools only work if merchants configure them properly.

Chargeback Trends by Industry

Chargeback trends differ sharply by industry – Sift reported year-on-year rises of 816% in online travel and lodging, 222% in e-commerce and 59% in digital goods and services in 2024.

Visa and Mastercard do not publish official per-industry chargeback rates, and we found no public source that publishes verified absolute rates by sector.

Note: Sift’s figures are percentage increases in chargebacks reported from its own merchant network, not chargeback rates. Absolute rates differ by processor and sector.

The thresholds that matter are the card schemes’: Visa flags Excessive Merchants at a 1.5% VAMP ratio (with at least 1,500 fraud and dispute events a month) and Mastercard flags ECM merchants at 100+ chargebacks and a 1.5% ratio. Staying well below 1% leaves a margin – see the Visa VAMP and Mastercard ECP section below.

Subscription and continuity billing businesses are particularly vulnerable, because customers forget they signed up or find cancellation processes too difficult. Businesses in high-risk industries should consider specialist merchant account providers from day one.

Friendly Fraud: A Major Driver of Chargebacks

Mastercard’s research found merchants identify 45% of their chargebacks as fraudulent. Chargebacks911’s 2026 survey found merchants estimate friendly fraud, where customers dispute legitimate charges, at 43.8% of their chargebacks on average, and says the true share is probably higher.

Friendly fraud (also called first-party misuse) occurs when real customers dispute legitimate transactions. Chargebacks911’s 2026 Field Report found that most surveyed merchants saw friendly fraud chargebacks rise in 2024.

Key friendly fraud statistics (2025–2026):

• 45% of chargebacks are identified as fraudulent by merchants – Mastercard / Datos Insights, 2025
• 43.8% of chargebacks are estimated by merchants to be friendly fraud on average – Chargebacks911, 2026 Chargeback Field Report
• 72% of cardholders see a dispute as a valid alternative to asking for a refund – Chargebacks911, Cardholder Dispute Index
• The leading cause of chargebacks cited by cardholders is confusing billing descriptors – Chargebacks911, 2024

The billing descriptor issue is particularly important because it’s entirely preventable. If customers don’t recognise a charge on their statement, many go straight to their bank rather than checking with the merchant. Simply ensuring your business name appears clearly on card statements can reduce disputes significantly.

Why is friendly fraud growing? Several factors are driving the trend. Online shopping has made chargebacks more accessible – filing a dispute is often easier than requesting a refund from the merchant. Consumer awareness of chargeback rights has increased, but understanding of when they’re appropriate hasn’t kept pace. And some consumers deliberately misuse the system for buyer’s remorse or to obtain goods for free.

The True Cost of a Chargeback

Each chargeback costs merchants far more than the transaction amount – LexisNexis data shows US retail and ecommerce merchants lose about $5.13 for every $1 of fraud when fees, lost goods, and admin costs are included.

The visible cost of a chargeback – the refunded transaction – is only the beginning. The true cost includes processor fees, card network fines, lost merchandise, shipping costs, and the administrative time spent on each case.

Cost breakdown per chargeback:

• Transaction amount – refunded in full to the cardholder
• Processor chargeback fee – typically £14–£20 per dispute among the providers we track with a confirmed fee (PayPal £14, Revolut £15, Stripe and Braintree £20), while Square charges nothing
• Lost merchandise – goods already shipped are rarely returned
• Shipping costs – outbound delivery costs are not recovered
• Administrative time – gathering evidence, filing representment, communicating with the processor
• Card network fines – if your chargeback rate triggers monitoring programme entry (Visa applies per-event fees to Excessive merchants under VAMP)

LexisNexis’s True Cost of Fraud study (2026 edition, 513 US and Canadian risk leaders in retail and ecommerce) found that US merchants lose about $5.13 for every $1 of fraud, and $5.23 in Canada. The 2025 edition put the US figure at $4.61.

Note: The $5.13 figure is based on US merchant data. UK-specific multipliers are not publicly available.

Beyond direct costs, excessive chargebacks can trigger account freezes or terminations – with processors withholding funds for up to 180 days. The indirect cost of losing your ability to process payments can be existential for small businesses. See our payment processing costs guide for a full breakdown of fees across UK providers.

Chargeback Dispute Win Rates

Merchants who actively contest chargebacks win about 44% of cases, but net recovery is only 10.7% after second-cycle disputes and undetected friendly fraud – according to Chargebacks911’s 2026 Chargeback Field Report.

Fighting chargebacks (known as “representment”) is resource-intensive, but the win rates are better than many merchants assume – if you actually contest them.

Note: All win rate figures come from Chargebacks911, a chargeback management company. Their data is from their own merchant portfolio and may reflect higher win rates than the industry average due to self-selection.

The gap between the roughly 44% win rate on represented disputes and the 10.7% net recovery rate shows how much is lost to second-cycle disputes and friendly fraud that goes undetected. Documentation matters most in friendly fraud cases, where you can show proof of delivery, customer correspondence, and clear terms.

The key to successful representment is documentation. Keep proof of delivery (tracking numbers, signed receipts), customer communication records, clear terms and conditions, and evidence that the customer received what they paid for.

Card Network Monitoring Programmes

Visa’s VAMP programme (enforced from October 2025) flags Excessive Merchants at a 1.5% VAMP ratio and 1,500+ monthly fraud and dispute events in its Asia-Pacific, Canada, EU and US regions. Mastercard’s ECM programme triggers at 100+ chargebacks and a 1.5% chargeback ratio in a calendar month.

Visa and Mastercard operate monitoring programmes that penalise merchants with excessive chargeback rates. These thresholds apply to all merchants regardless of which processor they use – Stripe, Square, PayPal, and every other UK processor must enforce them.

Visa VAMP (Visa Acquirer Monitoring Program)

Visa consolidated its fraud and dispute monitoring programmes into a single VAMP ratio, effective 1 June 2025. The advisory period ended on 30 September 2025, so enforcement began in October 2025.

Source: Visa VAMP Fact Sheet 2025; Ravelin analysis (May 2025); Chargebacks911 (updated 2026). VAMP ratio = (TC40 fraud reports + TC15 non-fraud disputes) ÷ total settled Visa transactions.

The key change took effect on 1 April 2026: the Excessive Merchant threshold fell from 2.20% to 1.50% in Visa’s Asia-Pacific, Canada, EU and US regions (CEMEA stays at 2.20% and Latin America and the Caribbean is 1.50%). Visa’s fact sheet does not list the UK separately, so ask your acquirer which threshold applies to you. Disputes resolved through Visa’s pre-dispute solutions are excluded from the ratio, giving merchants a strong incentive to use prevention technology.

Mastercard ECM and HECM

Source: Mastercard Chargeback Guide; Kount; PayPal Braintree documentation. Both the count AND the ratio thresholds must be met simultaneously.

Fines escalate the longer a merchant stays in the programme and fall on the acquirer first – at which point most acquirers will terminate the merchant account rather than absorb the cost.

Exit requires 3 consecutive months below both thresholds. For merchants already in a monitoring programme, specialist no credit check merchant accounts may be the only processing option available while working to reduce ratios.

Prevention Strategies That Work

Three practical prevention measures are: enabling 3D Secure authentication (shifts liability to the issuer for authenticated payments), fixing billing descriptors (prevents confusion-based disputes), and responding to every dispute inside your processor’s deadline.

Prevention is generally cheaper than fighting chargebacks after the fact. Chargebacks911’s 2026 Chargeback Field Report found that 27% of merchants already use AI-based fraud detection and a further 37% plan to.

Essential prevention measures for UK merchants:

1. Enable 3D Secure (Strong Customer Authentication) – shifts chargeback liability to the card issuer for authenticated transactions. Required for most UK online payments under PSD2.
2. Fix your billing descriptor – ensure customers recognise your business name on their statement. Use a test purchase to check.
3. Respond to every dispute before the deadline – a late or missing response loses by default, and a complete evidence pack gives you the best chance.
4. Use AVS and CVV verification – helps block card-testing attacks and checks that the billing address and security code match the card.
5. Set velocity filters – limits transaction frequency to prevent automated fraud.
6. Enrol in pre-dispute tools – Visa’s Order Insight, Mastercard’s Ethoca. Visa excludes disputes resolved through its pre-dispute solutions from the VAMP ratio.
7. Make refunds easy – a clear, accessible refund process prevents customers from going straight to their bank. Chargebacks911’s Cardholder Dispute Index found 72% of cardholders see a dispute as a valid alternative to asking for a refund.

Most modern payment gateways include fraud prevention tools as standard. The key is configuring them properly – default settings leave significant gaps. For a full comparison of provider security features, see our best card machines guide.

Sources and Methodology

All statistics in this guide are sourced from named primary authorities with publication dates noted alongside each figure. We do not use aggregated secondary sources without attribution.

Emma Clarke

Technology & Payments Specialist

Emma covers the full range of business technology, including EPOS systems, merchant accounts, telecoms, and web tools. Her experience as a retail systems consultant helps businesses choose the right digital solutions to improve efficiency and sales.

Reviewed by

Sarah Mitchell

B2B Commerce & Finance Reviewer