As financial pressures deepen across the UK, a new challenge is emerging for merchants – one that may prove just as costly as inflation or supply chain disruption.
Growing threat from chargeback surge
According to Chargebacks911, the rise of first-party misuse and chargebacks, more commonly known as “friendly fraud,” is fast becoming a structural risk for UK retailers.
In contrast to traditional fraud, where bad actors gain unauthorised access to payment details, friendly fraud occurs when a legitimate customer disputes a transaction without just cause.
Motivations vary – from forgetfulness to financial stress – but the consequences are starkly consistent: lost revenue, increased operational workload, and reputational erosion.
The UK economy remains in a precarious state.
Although it avoided a technical recession in early 2025, economic indicators continue to flash warning signs.
GDP stagnated in Q1, inflation ticked up to 3.5% in April, and household debt has reached a record £1.8 trillion.
Consumer confidence, meanwhile, plummeted to its lowest level since early 2024. As wallets tighten, more consumers are exploiting the chargeback mechanism as a financial coping tool.
This is not mere speculation.
The latest LexisNexis Cybercrime Report reveals that friendly fraud now constitutes 36% of global fraud cases – more than doubling in a single year.
If UK conditions deteriorate further, this figure could climb even higher domestically.
Retailers, particularly those in high-ticket or subscription-based verticals, are especially exposed.
Chargebacks911 warns that without robust systems in place, businesses risk treating this rising trend as a background cost of commerce – rather than the strategic vulnerability it truly is.
The answer, according to experts, lies in data.
Proactive fraud detection tools, customer behavioural analytics, and improved post-purchase transparency can help merchants distinguish between legitimate disputes and opportunistic claims.
With economic recovery still uncertain, treating chargebacks as a controllable threat – rather than an inevitable outcome – may define who thrives in 2025’s turbulent trading environment.
For UK merchants, the message is clear: prevention now is far cheaper than reaction later.
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