Customers Are Now Using ‘Friendly Fraud’ to Get Free Stuff — Small Businesses Are Paying the Price
Some shoppers have found a shortcut to not paying for items: skip the return, just dispute the charge. It’s sneaky, and it’s technically fraud.
Credit card companies are becoming unlikely accomplices in a new kind of shoplifting, as some consumers skip the return line and just dispute the charge instead. Chargebacks, originally designed to protect people from real theft, are increasingly being used to reverse legitimate purchases. Researchers call this trend “friendly fraud.” American consumers filed 158 million transaction disputes in 2025, up 29% from 2021, far outpacing growth in card transactions overall, Bloomberg reports.
Some chargebacks are genuine, since online shopping makes it easy to forget what you bought or doesn’t give you enough time to catch a mistake before the return window closes. But a lot of it is deliberate, as evidenced by TikTok tutorials that coach shoppers on how to use chargebacks to score free merch.
While large retailers can absorb these losses by raising prices across the board, small businesses can’t. Every successful fraudulent dispute costs a merchant the product, the revenue and a penalty fee, on top of the labor spent fighting it.
Credit card companies are becoming unlikely accomplices in a new kind of shoplifting, as some consumers skip the return line and just dispute the charge instead. Chargebacks, originally designed to protect people from real theft, are increasingly being used to reverse legitimate purchases. Researchers call this trend “friendly fraud.” American consumers filed 158 million transaction disputes in 2025, up 29% from 2021, far outpacing growth in card transactions overall, Bloomberg reports.
Some chargebacks are genuine, since online shopping makes it easy to forget what you bought or doesn’t give you enough time to catch a mistake before the return window closes. But a lot of it is deliberate, as evidenced by TikTok tutorials that coach shoppers on how to use chargebacks to score free merch.
While large retailers can absorb these losses by raising prices across the board, small businesses can’t. Every successful fraudulent dispute costs a merchant the product, the revenue and a penalty fee, on top of the labor spent fighting it.
