The number of chargebacks requested by cardholders will rise to 616 million by 2031; a growth rate of over 50%, driven by heightened consumer awareness of chargebacks through social media and rising cases of deliberate friendly fraud.
New research from global tech strategists Juniper Research identified that this surge in volume is driving merchants to automation. Automated solutions offer superior scalability versus manual processes; presenting opportunities for automated chargeback solution providers.
| An extract of the new report, Chargeback Management Market 2026-2031, is available as a free download. The report also forms part of Juniper Research’s new Merchant Payments Subscription; offering tailored insights and data for the rapidly moving sector |
Automation unlocking significant revenue loss prevention services
The report found that automated solutions are rapidly scaling due to the high costs of manual working. Whilst chargebacks have associated fees, a massive source of chargeback costs is the time spent by employees deciding whether to contest a chargeback, collecting evidence, and drafting the representment. In some cases, merchants even choose not to contest chargebacks due to these costs.
By using intelligent decisioning rules, automatically collecting proof of legitimate purchase, and creating automated templates, merchants can significantly reduce manual chargeback-related work; unlocking significant capacity to reduce revenue loss. However, the report recommends these automated processes must still be paired with human oversight to balance time required with quality of output.
Report co-author Michael Greenwood explains: “With chargebacks surging, merchants have no choice but to adopt automation, which acts as a force multiplier to merchants’ loss prevention efforts. However, chargebacks must be tailored to each merchant’s circumstances; making human-in-the-loop the most effective model.”
