Why UK shoppers are turning chargebacks into a ‘refund weapon’

By Gloria Methri

As prices rise and paycheques stretch thinner, a quiet shift is rippling through British retail—one that isn’t showing up in high-street footfall or sales charts just yet. It’s happening in the backend, in customer service portals, and on bank statements. And it’s costing UK businesses dearly.

A new warning from global dispute resolution firm Chargebacks911 reveals that British consumers are increasingly turning to chargebacks, not just as a remedy, but as a tactic. In a fragile economy marked by inflation, supply shocks, and post-Brexit trade friction, merchants are reporting a steep rise in first-party misuse, also known as friendly fraud.

“We’re seeing more cardholders exploit chargebacks not because they didn’t receive the product or service, but because they’re looking for ways to manage financial strain,” said Monica Eaton, CEO of Chargebacks911. “Unfortunately, it’s the merchant who foots the bill.”

Friendly Fraud on the Rise Amid Economic Anxiety

Unlike traditional fraud, where a transaction is truly unauthorised, friendly fraud involves legitimate customers disputing valid purchases, sometimes due to forgetfulness, confusion, or financial desperation. But increasingly, experts say, it’s becoming intentional.

And the timing couldn’t be worse. The UK economy may have narrowly avoided a recession in early 2025, but the indicators remain grim:

• Household debt has reached a record £1.8 trillion, according to Bank of England data.
• Inflation climbed to 3.5% in April 2025, up from 2.6% the previous month.
• GDP stagnated, and consumer confidence plunged to a 14-month low.

Add Brexit-related trade barriers, retaliatory tariffs, and rising import costs—especially for essentials like food and electronics—and the picture for UK merchants becomes one of high volatility and even higher risk.

According to LexisNexis’ 2024 Cybercrime Report, friendly fraud accounted for 36% of all global fraud cases—up from 15% the previous year. With UK consumers under pressure, Chargebacks911 warns that figure may be even higher locally by year-end.

Why Chargebacks Are Being ‘Weaponised’ by Consumers

Chargebacks were designed to protect consumers from fraud. But when misused—especially during economic downturns—they create a hidden leakage in the retail pipeline, one that drains profits and disrupts operations.

Retailers not only lose the sale, but also shoulder penalties, lose inventory, and suffer reputational damage. Worse, many lack the tools to effectively detect or dispute these chargebacks.

“Chargebacks are no longer just a cost of doing business—they’re a symptom of deeper financial pressure and evolving fraud,” Eaton said. “But they’re also a threat you can manage—if you have the right systems, tools, and mindset in place.”

How UK Merchants Can Fight Back

1. Detect Dispute Trends Early
   Watch for recurring reasons, such as “item not received” or spikes in disputes, across specific products or customer segments.
2. Strengthen Customer Communication
   Clear refund, cancellation, and shipping policies reduce post-purchase confusion. Keep customers informed at every step.
3. Fortify Transaction Records
   Retain digital evidence: delivery logs, emails, IP addresses, and order confirmations.
4. Train Staff for Proactive Resolution
   Equip frontline teams to recognise abuse patterns and resolve disputes before they escalate to chargebacks.
5. Leverage Real-Time Alerts and AI Tools
   Utilise automation to promptly identify and address chargebacks, particularly for high-value or recurring cases.
6. Treat Every Chargeback as a Signal
   Don’t absorb chargebacks blindly—track patterns and adapt accordingly.

“We have seen this pattern emerge before—COVID in 2020, inflation in 2022, and now the uncertainty of 2025,” Eaton said. “Retailers who act now will be better equipped to withstand both economic and fraud-related shocks.”

While the Bank of England predicts a modest recovery by late 2025, the environment remains brittle for UK merchants. And with financially stressed consumers increasingly turning chargebacks into a form of digital rebellion, the need for vigilance has never been greater.

Because in 2025, a chargeback may no longer mean something went wrong—it may just mean someone couldn’t afford to pay.