Is it Fraud? Study Highlights a Nuanced Spectrum of Chargeback Misuse

Press Release from Chargebacks911

TAMPA, Fla., April 24, 2024 /PRNewswire/ -- A recent study released by Chargebacks911 highlights the Chargeback Spectrum, showing that first-party misuse of the payment dispute process is not always easy to define.

Chargebacks, or bank-initiated refunds, play an important role in digital commerce. They offer assurance that customers will be protected from fraud or dishonest merchants when shopping online. Cardholders, however, often abuse the chargeback process by disputing charges that they shouldn't. These illegitimate disputes are called first-party misuse (or "friendly fraud").

The Cardholder Dispute Index polled more than 2,000 U.S. cardholders and outlined eight common scenarios of first-party misuse. Respondents were then asked to rate how appropriate they felt it was to dispute the charge in that context. They were instructed to assign each scenario a rating on a scale from zero to 10, with 10 being "completely appropriate" and zero being "completely inappropriate."

Responses were diverse, with eight being the highest score and three being the lowest. This shows that cardholders have a complex understanding of when it is — and is not — appropriate to file a credit card dispute.

Chargebacks911 also asked merchants to participate in the same exercise. Interestingly, their scores were similarly diverse, with six being the highest score and one being the lowest. This shows that, while merchants tended to grade more conservatively than cardholders, there is a lot of nuance to the understanding of first-party chargeback misuse on all sides.

"The interesting thing to me isn't that merchants and cardholders saw things differently, but that they agreed as much as they did," said Jarrod Wright, Vice President of Marketing for Chargebacks911. "This highlights the fact that first-party misuse of the payment dispute process is not easy to define, and there's no central standard for what constitutes a valid or invalid claim. We need to take the necessary steps as an industry to ensure everyone is on the same page and the playing field is balanced when it comes to facilitating disputes."

Chargebacks911 recently released an infographic highlighting the Chargeback Spectrum, which can be found here.

The online version of their report offers readers an interactive chart to explore the data.

For more information on Chargebacks911 and their Software as a Service (SaaS) solutions, visit

About Chargebacks911
Chargebacks911® is the global leader in chargeback prevention and remediation technology. As a provider or supplier to financial technology companies, Chargebacks911 is the first global company fully dedicated to providing merchants with an end-to-end platform specifically designed to counter post-transactional fraud and chargeback misuse. Today, Chargebacks911 safeguards more than 2.4 billion transactions per year on behalf of 2.5 million merchants in 87 countries. For details on Chargebacks911's comprehensive dispute management solutions, visit

Media Contact: Justin Clements
Tel: 877.634.9808 ext. 7905
Mobile: 812.621.0631
Email: [email protected]

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