Global chargeback volumes are projected to climb 24% over the next three years, with some sectors already experiencing far steeper increases. Meanwhile, the rise of new transaction models like agentic ecommerce threatens to escalate dispute figures even further. Many merchants now face unprecedented pressure to refine their dispute management strategies before they suffer significant losses.ย
At Justt’s ChargebackX 2025 conference, Ludovic Houri, Managing Director and Head of Merchant Services EMEA/APAC at JP Morgan, and Katie Steel, VP Security Solutions at Mastercard, shared insights on current trends, best practices, and the future of chargeback management. Hosted by Justtโs Co-Founder and Chief Risk Officer Roenen Ben-Ami, their discussion revealed that while rising dispute volumes entail real risk, merchants who adopt data-driven approaches can still reap well-earned rewards.
Travel, Subscriptions, and Strategic Errors: Chargebacks Go Sky-High
Chargeback growth is happening in almost every industry, but the rate of growth varies sector-to-sector. Travel represents one of the most dramatic increases, with disputes rising 800% since the pandemic. Houri stated that this is partly due to the complexity introduced by third-party booking platforms, but attributes the primary cause to communication failure: “It’s often easier to get a travel chargeback than a refund from a travel company.”
Subscription services face similar challenges, with chargebacks increasing 59% year-over-year. Likewise, much of this growth stems from strategic errors on the merchantsโ part. “This is largely due to legitimating behaviour by merchants who refund or accept chargebacks too willingly because of the small transaction amount,” Steel noted. “This often proves to be a false economy, as it leads to more chargebacks from emboldened cardholders down the line.”
Both speakers identified friendly fraud, or first-party fraud, as one of the industry’s greatest challenges. Unlike true fraud, first-party fraud involves legitimate cardholders disputing valid transactions โ whether intentionally or due to confusion. 75% of all disputes result from first-party fraud, and this number is rising fast. Steel warned that merchants need to take responsibility for these figures: โBy representing without strong evidence, merchants are both losing that revenue and training cardholders to abuse that system.โ
Prevention Strategies: Layering Your Chargeback Defense
While both speakers acknowledged the issue of rising chargebacks, neither viewed the challenge as insurmountable. Steel outlined a three-tier approach to chargeback prevention that addresses disputes before they occur. The first layer focuses on fraud prevention tools. “Practice AVS and CVV checks, use 3D Secure, monitor for red flags like address mismatches โ but also arm yourself with AI detection tools,” Steel advised. The second layer addresses transaction clarity, using clear billing descriptors and network tools like Ethocaโs Consumer Clarity, while the third layer optimizes support for cancellations and refunds.ย
Steel cited research showing that “84% of consumers find chargebacks easier than merchant refund processes.” By streamlining refund procedures, merchants can resolve issues directly rather than through the dispute system. Once disputes are initiated, tools like Ethoca Alerts allow merchants to issue refunds before chargebacks become formalized, avoiding lengthy and expensive battles.
Houri concurred with Steelโs three-tier system, but emphasised that merchants must operate swiftly to make it work. โThe key element is speedโ, he observed. โWhen something goes wrong in a transaction, reaction time is crucial. You want to prevent a problem becoming a chargeback. Use every predispute tool available before the dispute gets real.โ
What Sets Top Performersโ Win-rates Apart?
Both speakers noticed that merchants who successfully manage chargebacks share certain characteristics. While some of these relate to avoiding chargebacks in the first place, merchants with high volumes and high win rates also showed significant commonalities. Some of these included:ย
Automation and Data
According to Steel, โTop performers who experience high chargeback volumes achieve success through intelligent pushback. Theyโre using automated representment tools, providing robust documentation, and employing data-driven strategies. This means treating different claims differently, and using data to decide when to fight.โย
Houri concurred, remarking that โMany automated solutions allow merchants to use data beyond the classic representment elements, increasing the likelihood of a winโ. He pointed to advanced data points like device IDs and IP addresses as powerful evidence. “When a cardholder claims ‘I was not there, it was not me,’ you can respond: ‘Yes, you were. It was your phone.โโ
Education and Adaptability
Houri emphasized education as a major differentiator. “The rules are so important and they’re ever-evolving,” he noted. “Different staff have to deal with that, and not all of them have the same level of knowledge.” To remedy this, he recommends that merchants educate staff continuously and consult with acquirers about available chargeback handling education.
Steel notes that top performers also treat chargeback management as an ongoing process โ โfluid, rather than a one-time fixโ. They follow the data continuously and use systems that can adapt to changing behaviour in real time.
Picking Your Battles
A common merchant mistake involves fighting every chargeback indiscriminately, or forfeiting every dispute you receive. But while these approaches may save time, they often play havoc with revenue. Steel argued for strategic dispute management where each case is evaluated based on recovery potential, cost, and long-term impact:
โMerchants should establish rules based on minimum thresholds, transaction types, and reason codes. By fighting every chargeback you’re going to see higher costs, lower win rates, and risk decreasing approval rates with certain issuers.”
Conversely, Houri added that indiscriminate fighting creates problems with acquirers, remarking that “It’s not only the money and the cost; it’s the post-dispute impact it could have on the merchant-acquirer relationship, and any associated fees.”
What the Future Holds: Agentic Commerce and Chargebacks
The speakers offered contrasting views on how agentic commerce โ where AI agents complete purchases for cardholders on third-party sites โ will affect chargeback volumes. Their debate was characteristic of the conference, where Amazonโs โBuy for Meโ agentic program and Googleโs AP2 protocol attracted both praise and concern. All parties could agree on only one thing: agentic commerce is coming fast, and itโs going to change online business forever.ย
Houri expressed cautious optimism, suggesting that agents operating with full knowledge of rules and systems could optimize transactions and assemble dispute elements systematically. “My gut feeling is that it could improve dispute results in terms of speed, cost and efficiency,” he said. “Simply put, replacing the human consumer with an agent consumer should lead to fewer judgments.”
Steel took a more skeptical stance, identifying several risk factors. “We pessimists in the industry feel that it may actually drive additional claims because of misinterpreted intent,” she explained. Language nuances โ like a customer saying “violet shirt” when they meant “purple shirt” โ could trigger disputes.
Overpersonalization presents another challenge. As AI systems make purchases based on inferred preferences, customers may dispute transactions with claims that agents were not carrying out their orders. Steel highlighted the concept of “next best” purchases, where agents select alternatives when preferred items are unavailable. “This can lead to mismatches in sizes, features or packaging, especially in categories like apparel and household goods.”
Preparing for Agentic Commerce
The urgency of preparation for agentic commerce is underscored by growing AI adoption rates and the increasing appeal of this technology for consumers. Weekly OpenAI users reached 700 million in September, up from 500 million at the end of March. Meanwhile, over half of consumers have replaced traditional search engines with generative AI tools for product recommendations. Most strikingly, 68% of consumers report comfort with AI-driven checkout โ double the 34% figure from six months earlier.
Steel emphasized that preparation requires coordinated effort. “Neither merchants nor any entity affected should work in silos,” she advised. “Both the upfront detection and dispute resolution need to gear up to be ready.”
Best practices include working exclusively with registered AI agents and using tools to distinguish them from malicious bots. “This industry has spent billions, maybe trillions of dollars on finally getting good at detecting bots,” Steel noted. “But now we have to be okay with some of them.”
The Bottom Line: Embrace Data and Dialogueย
Both speakers agreed that, as rising chargeback volumes and agentic commerce reshape transaction patterns, merchants who invest in education, data collection, automation, and strategic dispute management will be best positioned to protect their revenue.
“Good quality data is extremely important as the chargeback rules are based on data and not feelings,” Steel concluded. “Acquirers and merchants should always concentrate on the power of the data and scrutinize what they are sending as compelling evidence.”
Houri finished up by emphasizing the importance of ongoing dialogue. “Let’s talk between the merchants and the acquirers,” he urged. “Let’s maintain knowledge of the rules. Let’s challenge each other genuinely to get a better ecosystem collectively. I think we are all together in this.”
