The first several months of the year are known as ‘chargeback season’ for fraud practitioners globally, as businesses navigate an increase in post-holiday purchase disputes. The latest Sift Digital Trust & Safety Index report covers the current state of chargeback data and dispute trends, including consumer behaviors and expert predictions.

Chargebacks are causing more revenue and profit losses than ever before, with Americans disputing a staggering $83 billion in credit card charges in 2023 and the average cost of disputes increasing by 16% last year, according to Sift research. The report also found that average transaction values spiked by 67% from Q1-Q3 2022 to Q1-Q3 2023 across our global network, with the potential to cause higher chargeback losses in 2024.

Below, review the key findings from the Index to explore the rise in first-party fraud committed by younger generations, industry-specific dispute patterns, and the implications of Visa’s Compelling Evidence 3.0 guidelines on merchants. 

First-party fraud on the rise

In a recent survey, 44% of U.S. consumers contested a purchase because it was fraudulently made by someone else using their payment information. Notably, first-party fraud disputes exceed true fraud disputes. Consumers admit to engaging in such activity to secure refunds or avoid strict return policies: 26% of consumers who filed a dispute, despite receiving the item and being satisfied with the purchase, did so because they wanted the money back and knew their credit card company would cover the cost. 

Disputes arise not only from true fraud, but also from first-party fraud (or friendly fraud), where legitimate cardholders dispute transactions, intentionally or unintentionally. 

Generational divide in fraudulent activity

Younger generations, particularly Gen Z and Millennials, appear to be more inclined to commit friendly fraud compared to older generations: 42% of Gen Z admits to engaging in first-party fraud, while only 5% of Baby Boomers concede to having done so. 

Some younger consumers may not realize that their actions constitute fraud, leading them to file a chargeback instead of adhering to cumbersome return policies. Others may intentionally commit fraud, either to secure an item or service for free or as a result of a negative encounter with the business.

Disputes rates in ticketing and loyalty verticals skyrocket

While ticketing merchants faced a 622% rise in chargeback rates, loyalty providers were hit with a 189% uptick. Even so, dispute rates across the Sift global network rose a moderate 6% YoY in Q1 2023 vs. Q1 2022. Rising average chargeback values in select verticals, such as transportation and digital wallets, further emphasize the need for industry-specific fraud prevention measures.

Read the full report for more 2023 dispute data, and visit the Fraud Industry Benchmarking Resource to explore current industry insights from the Sift global network.

Related topics



first-party fraud

visa compelling evidence

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