Not Every Chargeback Is Fraud, and That's Exactly the Problem

Americans filed 158 million card-transaction disputes in 2025, up 29% since 2021, according to Bloomberg. The framing was familiar: shoppers using "friendly fraud" to get back at retailers. But the reaction to that story was more interesting than the story, because plenty of people pushed back with a simple point. Asking for a chargeback is not fraud when you have actually been defrauded.

Both things are true at once, and that is the whole problem. Some of those 158 million disputes are abuse. Many are not. And the industry keeps reaching for one word to cover all of it.

Are All These Disputes Really Fraud?

No, and pretending otherwise misreads the data. A large share of disputes are legitimate recourse: a parcel that never came, a subscription the customer forgot they signed up for, a charge from a merchant name they did not recognise, or a refund a retailer simply refused to give. When customer service has curdled into a chatbot maze, the chargeback is the one button that still works.

At the same time, some of it is unmistakably deliberate. There are TikTok tutorials coaching shoppers on how to use chargebacks to score free merchandise. So the honest answer is that the 158 million number is a blend: genuine grievances and coordinated abuse, filed through the exact same mechanism, often indistinguishable on the surface. That blend is the reality retailers actually have to work with.

Why Does the "Friendly Fraud" Label Matter?

Because the word you use decides the response you build. Call every dispute "fraud" and the logical reaction is to treat every disputing customer as a suspect: tighter policies, slower refunds, more hoops, more friction. That feels like fighting fraud. Mostly it is fighting customers.

The label matters because it flattens a spectrum into a slur. A customer whose parcel genuinely vanished and a customer running a free-merch scam are not the same person, but "friendly fraud" puts them in the same bucket, and any policy built on that bucket will treat them the same way. That is how honest, wronged customers end up paying for the behaviour of people they have never met.

What Happens When Retailers Treat Everyone as a Fraudster?

They accelerate the exact behaviour they are trying to stop. As the reporting around this story noted, disputes climbed partly because return policies got meaner, junk fees multiplied, and service got worse. In other words, blunt anti-customer measures are part of what pushed people toward the dispute button in the first place.

It becomes a doom loop. Fraud rises, so retailers get stricter, so more genuine customers get stonewalled, so more of them reach for a chargeback because it is the only lever left, so the dispute numbers rise again. Every turn of that loop is framed as customers defrauding retailers, when a good part of it is retailers and customers failing to understand each other, with a real layer of deliberate abuse mixed in. Treating the whole thing as fraud guarantees the loop keeps turning.

What's the Actual Fix?

Stop trying to classify the category and start distinguishing the people. The question is not "are chargebacks fraud or not." It is "is this particular claimant genuinely wronged, or working the system." And that is answerable, just not from the single dispute in front of you.

A one-off dispute from a customer with a clean history is a world away from an account filing the same claim across a dozen retailers. The genuine customer wants their specific problem fixed. The abuser repeats. That pattern is the signal, and it lives across retailers, not inside any one dispute, which is exactly the blind spot we wrote about in The Serial Returner No Single Shop Can See. Get that distinction right and you can refund the wronged customer fast while declining the abuser with confidence, instead of punishing both. That is the outcome we describe in Fewer False Positives, Faster Claims.

The Word "Fraud" Is Doing Too Much Work

The Bloomberg number is real and the abuse is real. But "friendly fraud" as a catch-all is quietly making the problem worse, because it tells retailers to treat 158 million disputes as one thing when they are clearly at least two.

The retailers who cope will be the ones who stop arguing about the label and start telling the genuine dispute from the deliberate one. The customer who was actually defrauded is not the enemy. Losing the ability to tell them apart from the one who was not, that is the real cost.