This trend is creating significant challenges for businesses across industries, particularly as global ecommerce revenues are projected to grow by 14% to USD 4 trillion in 2024. The report reveals that dispute rates increased by 78% year-over-year in Q3 2024.
Chargeback values saw a sharp rise during Q1 2024—commonly referred to as ‘chargeback season’ following the December holidays—reaching an average of USD 374, a 59% increase from the prior year.
Economic pressures are contributing to a rise in ‘friendly’ fraud, where consumers initiate chargebacks to recover money despite being satisfied with their purchase. Sift’s research shows that 27% of consumers have encountered online content promoting such practices.
The data also highlights a generational divide in chargeback fraud participation. Among Gen Z respondents, 42% admitted to engaging in chargeback fraud, compared to 33% of Millennials, 21% of Generation X, and only 6% of Baby Boomers.
Businesses are facing increased financial and operational burdens due to the normalization of such practices. Sift’s report emphasizes the need for advanced fraud prevention technologies, such as AI-powered systems, to combat both chargeback abuse and traditional fraud effectively.
Sift’s findings underscore the growing importance of protecting digital transactions and maintaining trust in an increasingly complex e-commerce landscape.
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