Top Chargeback Triggers in 2025: How to Detect and Prevent Them Early

The State of Chargebacks in 2025

In 2025, chargebacks have become a growing concern for merchants, with global losses expected to surpass $33.79 billion. Friendly fraud remains the top trigger, now responsible for over 60% of all disputes. High-risk industries such as digital goods and subscriptions are especially affected, often reporting chargeback rates above 1.5%. Apart from that, synthetic identity fraud and AI-powered scams are surging, and more and more merchants report an increase in fake profiles used to exploit payment systems. Meanwhile, over 70% of subscription businesses face disputes tied to unclear renewal or cancellation terms.

Chargeback rates continue to grow across all industries and countries, which is why it is crucially important for merchants to know the most common chargeback triggers and act accordingly.

Top Chargeback Triggers in 2025

In 2025, chargebacks are being driven by a few key triggers that merchants must watch closely. The most common is friendly fraud, where legitimate customers dispute valid transactions — often because they forgot about a purchase, didn’t recognize the charge, or simply wanted a refund without going through proper channels. This type of fraud now accounts for more than 60 percent of all chargebacks. Among other triggers are the following:

• Subscription billing issues. Customers frequently file disputes when they are charged for services they forgot to cancel or when the cancellation process is confusing or time-consuming. These disputes are especially common in digital services and recurring billing models.
• Unauthorized transactions and card-not-present fraud. With the rise of synthetic identities and AI-generated scams, fraudsters are finding new ways to exploit online payment systems. These transactions often result in chargebacks when customers claim they never made the purchase.
• Shipping problems. Delivery issues continue to generate disputes, especially when products arrive late, are damaged, or never show up. Customers may file a chargeback rather than seek help from the merchant directly.
• Refund delays and poor communication. If a customer requests a return or refund and does not receive timely confirmation or payment, they may go straight to their bank to dispute the charge.
• Fraud via synthetic Identity and AI-generated scams. Fraudsters are using generative AI to create believable fake IDs, deepfakes, and synthetic personas to initiate or chargeback transactions.
• Mobile and cross‑border payment vulnerabilities. Rising mobile e-commerce and embedded payments introduce new fraud vectors across regions, often due to varying regulations and weak authentication.

Understanding these triggers is critical for merchants who want to prevent disputes before they occur. By improving communication, streamlining policies, and using fraud detection tools, businesses can address the root causes of chargebacks in today’s complex payment environment.

How to Detect Chargeback Triggers Early

Detecting chargeback triggers before they escalate into disputes is essential for reducing losses and maintaining customer trust. In 2025, with chargebacks becoming more frequent and complex, early detection is no longer optional — it’s a competitive necessity. By combining real-time alerts with smart analytics and fraud monitoring, merchants can spot red flags quickly and take action to prevent disputes. Here are some proven tips to help you identify and address potential chargebacks early on:

• Use chargeback prevention alerts. Tools like Verifi and Ethoca provide real-time notifications when a customer initiates a dispute with their bank. This allows you to take immediate action, such as issuing a refund or contacting the customer, to stop the chargeback before it happens. Both services are available directly within MidArmor, offering seamless integration for proactive protection.
• Monitor transaction patterns. Keep an eye on abnormal purchase behavior, such as unusually large orders, rapid repeat purchases, or mismatched billing and shipping details. These can be early signs of fraud or buyer’s remorse.
• Track dispute history. Identify customers or products that are frequently associated with chargebacks. Recurring issues may point to policy, product, or communication gaps that need to be addressed.
• Analyze chargeback reason codes. Reviewing the most common reason codes can help you pinpoint specific operational weaknesses, like unclear refund policies, missed shipping deadlines, or poor billing descriptor clarity.
• Use machine learning and fraud detection tools. AI-powered systems can detect subtle risk signals such as device anomalies, geolocation mismatches, and inconsistent browsing behavior that often precede fraudulent disputes.
• Collect customer feedback. Proactively gather feedback at key touchpoints (post-purchase, post-delivery) to catch dissatisfaction early. Unhappy customers are more likely to skip support and go straight to their bank.

Early detection is the foundation of a strong chargeback prevention strategy. With the right tools and a data-driven approach, you can resolve issues before they impact your revenue or reputation.

Effective Prevention Strategies

Preventing chargebacks in 2025 requires more than just reacting to disputes — it takes a proactive, multi-layered approach. As fraud becomes more sophisticated and customer expectations continue to rise, businesses must implement clear policies, smarter tools, and better communication to stay ahead. So, let’s explore the most effective strategies to reduce chargeback risks before they happen and protect your revenue long-term.

Certainly, all these strategies do not guarantee 100% protection against chargebacks, which is why we also recommend using a reliable chargeback prevention service like Verifi or Ethoca, which are both available within MidArmor.