Tel Aviv // September 26, 2023 // Chargebacks are now taking a multimillion-dollar bite out of many businesses’ revenues, according to the Justt 2023 Chargeback Pulse report, which reveals that a quarter of merchants now lose $5 million a year or more to chargebacks — even as shifts in consumer behavior are driving up the frequency of payment disputes.
The survey’s 520 respondents come from merchants with at least $50 million revenue in the United States and Canada, with more than half of them representing large organizations with more than $500 million revenue.
“Merchants have long viewed chargebacks as the cost of doing business — but the new Chargeback Pulse report shows that these costs are now spiraling out of control and eating away at their bottom line,” says Ofir Tahor, CEO and co-founder of Justt. “The rise of buy-now, pay-later services and new rules governing disputes are only adding to the challenges businesses face as they seek to clamp down on improper chargebacks.”
The study also uncovered how chargebacks are particularly affecting the travel and hospitality (T&H) sector as well as airline businesses, as more than half of surveyed respondents in these industry cohorts represent organizations with more than $500M revenue.
Despite the escalating business risks posed by chargebacks, 42% of overall survey respondents currently lack the resources they need to tackle this problem. Worse still, 55% find it extremely challenging to distinguish “friendly fraud”, i.e. first-party misuse, from legitimate chargebacks, which means that companies could have won more chargeback cases if they had better insights into the root causes behind chargebacks. This is something that requires greater inter-departmental collaboration and technology investment.
Lastly, the study also reveals the extent to which chargeback professionals struggle in keeping pace with changes to the chargeback ecosystem. In fact, just 33% saying they fully understand Visa’s new rules around “compelling evidence” in chargeback cases — and shockingly, 17% of respondents said they hadn’t heard of Visa’s new rules at all.
Read the full Justt 2023 Chargeback Pulse report here.
Founded in 2020, Justt is dedicated to helping online merchants navigate the complex and costly system for credit card disputes. The company's smart technology and in-house expertise successfully resolves chargebacks for merchants, automatically reuniting them with their revenue. Justt's proprietary AI pulls the best evidence to build merchants' most compelling defense and keeps getting smarter with time, so win rates continue to grow.