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Friendly fraud—also known as first-party misuse—is expected to hit record highs this holiday season. With consumers stretching their budgets, return delays, gift-giving mistakes, and subscription purchases piling up, more customers are turning to chargebacks instead of requesting a refund the right way.
And the worst part? It can look exactly like legitimate customer behavior—until the dispute hits your inbox.
This guide breaks down what friendly fraud looks like, why it spikes during Black Friday/Cyber Monday, and what you can do now to reduce financial losses before the busiest sales window of the year.
Definition
when a legitimate customer makes a purchase and then files a chargeback instead of contacting the merchant for a refund or support. This can be accidental—like not recognizing a billing descriptor—or intentional, such as claiming an item never arrived even though tracking shows delivery. Because the cardholder is the one initiating the dispute, friendly fraud is one of the hardest types of chargebacks for merchants to prevent and win.
Why Friendly Fraud Increases During Peak Shopping Season
Holiday behavior creates perfect conditions for accidental (and intentional) misuse:
1. More family orders on shared cards.
Kids, spouses, and relatives often use the same card, creating confusion about purchases.
2. Gift shopping leads to buyer’s remorse.
People panic-buy, overspend, then dispute charges instead of returning items.
3. Shipping delays cause frustration.
If a delivery runs late, customers may dispute the charge—even if the order eventually arrives.
4. Subscription renewals spike in December/January.
Many customers forget they opted into recurring billing and file chargebacks instead.
Friendly fraud is now responsible for an estimated 60%+ of all chargebacks, and unfortunately, merchants carry the cost—lost product, shipping, fees, and lower approval ratios.
Common Friendly Fraud Scenarios to Watch For
Even well-meaning shoppers trigger disputes accidentally. The most common holiday scenarios include:
- “I don’t recognize this charge.”
- “My child used my card without permission.”
- “The package never arrived” (but tracking shows delivery).
- “I canceled, but it still charged me.”
- “I thought it was a one-time purchase.”
- “I returned the item but haven’t received a refund” (but the return is still in transit).
Understanding these patterns helps you create better prevention systems before the rush.
Remember
Many holiday disputes come from confusion—not criminal behavior. Clear receipts, visible return policies, and proactive shipping updates can stop accidental chargebacks before they happen.
How Merchants Can Reduce Friendly Fraud This Season
Friendly fraud is hardest to prevent after it happens. The goal is to reduce confusion, set expectations, and create receipts that support your case in the event of a dispute.
Here’s what you can implement quickly—even in the middle of busy season:
1. Strengthen order confirmations & receipts
Use clear, simple language:
- What was purchased
- When it ships
- What the descriptor on the customer’s statement looks like
- Return/refund timelines
2. Add delivery confirmation
Signature confirmation or photo proof strengthens your case if “item not received” disputes occur.
3. Make your return policy impossible to miss
Holiday shoppers move fast. Make the policy visible:
- On the product page
- In the cart
- In the post-purchase email
4. Use a dispute management partner
Tools like Bankful’s chargeback program or automated representment platforms can help you fight friendly fraud and win back revenue.
5. Flag repeat offenders
If the same customer files multiple disputes, create rules in your CRM or payment processor to block future transactions.
Friendly fraud isn’t always malicious—but it is expensive. Preparing now will save you lost revenue, high dispute fees, and lower approval ratios during your busiest time of year. Connect with one of Bankful’s fraud experts today to get ahead of holiday chargebacks.