Holiday sales boom triggers surge in disputes, risking USD $250bn

This year's holiday shopping season is expected to deliver a sharp rise in revenue for retailers. However, analysts warn that heightened online activity could also trigger a significant increase in transaction disputes and post-sale revenue loss. Chargebacks911 has highlighted how rising consumer reliance on banks to resolve issues could expose merchants in the US and UK to greater levels of friendly fraud and chargeback abuse.

Consumer behaviour

Data from the company's 2025 Cardholder Dispute Index indicates that 76% of shoppers will now bypass retailers entirely and approach their bank directly if a purchase causes concern. A further 40% of consumers say they file disputes when they fail to recognise a billing descriptor. These trends, combined with increasing expectations for rapid refunds and issue resolution, put retailers at risk of losing income long after the original sale has been completed.

Retailers are warned that Black Friday and Cyber Monday, traditionally strong periods for online sales, could see revenue lost to disputes initiated by consumers reacting to minor delivery delays or unrecognised transactions.

Revenue at risk

As online sales across the United States are forecast to exceed USD $250 billion for the 2025 holiday season, concerns are surfacing regarding so-called friendly fraud. In these cases, cardholders raise disputes for legitimate purchases, sometimes forgetting the transaction or using the chargeback process to expedite refunds. Such practices are now reported to outpace scams as a source of losses for merchants worldwide.

Monica Eaton, Founder of Chargebacks911, notes the scale of the challenge and the potential impact on merchants' profit margins.

"Too many retailers think the battle ends at checkout," said Monica Eaton, Founder of Chargebacks911. "The real fight starts after the sale, when consumers begin disputing charges they barely remember. If you have not prepared your dispute defense before Black Friday, you are gambling with your margins."

Common triggers

Chargebacks911 identifies several recurring scenarios that are likely to become more frequent during periods of high transaction volumes. Slow delivery, forgotten late-night purchases, unfamiliar billing names, and delayed refunds are all typical causes of disputes. With increased online activity over the holidays, such situations can escalate rapidly if retailers are unprepared.

Where a refund takes more than two days to process, or where a billing entry appears unfamiliar, customers may use their bank's dispute function to resolve the issue, often bypassing direct contact with the retailer. This can trigger costly chargebacks for merchants and erode profits previously regarded as secure.

Prevention measures

In response to these risks, Eaton advises retailers to adopt several immediate measures. She recommends aligning billing descriptors with the retailer's brand, providing proactive tracking updates, and ensuring returns policies are transparent and accessible. Retailers are also urged to use dispute alerts and automated response systems to address customer concerns before disputes escalate.

Eaton stresses the importance of post-transaction management as a core strategy for safeguarding holiday revenue and shaping long-term customer relations. "The real fight starts after the sale, when consumers begin disputing charges they barely remember. If you have not prepared your dispute defense before Black Friday, you are gambling with your margins," said Eaton.