Chargebacks surge threatens retailers’ holiday profits

Chargebacks911 has warned online retailers that a surge in chargebacks is likely to erode some of the record revenues generated during the recent holiday shopping season.

Salesforce data put global eCommerce sales at USD $1.29 trillion between 1 November and 31 December. The company said a rise in returns and a shift in consumer behaviour after the holidays increase dispute risk during the first quarter.

The warning follows strong US spending around key discount events. Adobe Analytics data showed US shoppers spent USD $14.25 billion on Cyber Monday 2025. Adobe said Cyber 5 online sales reached USD $44.2 billion, up 7.7% year on year.

Salesforce also reported that global online traffic increased 13% over the holiday period, compared with 1% growth a year earlier. Chargebacks911 said the increase in online spending also increased exposure to disputes. The firm said card-not-present transactions carry higher dispute risk than in-store purchases.

Returns build

Salesforce reported that more than USD $181 billion of global online purchases made between 1 November and 31 December have already been returned. It said this represented 14% of all purchases. It also said returns increased 10% from the previous year.

Chargebacks911 linked elevated returns to higher chargeback volumes in the weeks that follow the holiday season. The firm said disputes rise when customers track delayed refunds, struggle to match billing descriptors to purchases, or choose to raise disputes through banks rather than contacting retailers.

The company said the first quarter has become a peak period for disputes as consumers review statements and reconcile budgets after holiday spending. It also said the dispute cycle can extend into January and February as consumers revisit purchases and refunds.

Mobile disputes

Chargebacks911 said consumers now initiate more disputes through mobile banking apps. It said the process can bypass merchant customer service channels and can start a formal chargeback process even when a customer intends only to query a transaction.

The firm also pointed to "friendly fraud" as a contributing factor during the post-holiday period. It described friendly fraud as disputes raised on legitimate transactions due to confusion, impatience, or convenience. It said this trend has grown as a share of overall dispute activity.

The company said return patterns add to the risk. It expects returns that peak in late December and early January to continue into mid-January. It said this often coincides with customers checking statements and seeking faster resolution through their bank.

Merchant measures

Monica Eaton, Founder & CEO of Chargebacks911, said merchants should expect disputes after the holiday peak.

"Retailers celebrated record online spending in November and December, but the real financial reckoning often does not show up until January," said Monica Eaton, Founder & CEO, Chargebacks911. "The chargeback hangover is real. It means a surge in disputes that can reduce profits if merchants do not put dispute prevention in place now."

Chargebacks911 set out several actions it said retailers can take during the post-holiday period. It recommended clearer billing descriptors so customers can recognise a charge on a card statement. It also recommended proactive order status updates, including shipment notifications.

The firm also recommended that merchants clarify refund timelines, including the expected time for processing and settlement. It said customers often file disputes when they view the refund process as slow or unclear.

Chargebacks911 also recommended automated dispute alerts and workflows. It said early notification can allow merchants to respond quickly and reduce losses and operational workload.

"Most disputes do not have to become losses," Eaton said. "Preparation from how you describe charges to how you engage customers after the sale can make a real difference in holding on to holiday profits."

Chargebacks911 said merchants should expect elevated dispute exposure into January and February as return volumes remain high and consumers continue to scrutinise transactions through banking apps and online statements.