Report: Online Disputes Are Surging — What Merchants Are Doing to Fight Back

The past two years have been a watershed moment for eCommerce, but the rise in online purchases has triggered an unexcepted consequence: a surge in both transaction disputes and chargebacks. Recent PYMNTS research shows 39% of eCommerce shoppers in Australia, the United Kingdom and the United States say they are disputing more transactions now than they did before March 2020, forcing eCommerce merchants to reconsider how to mitigate the financial toll disputes and chargebacks can take on their bottom lines.

Tackling The Chargeback Surge: How eCommerce Merchants Are Doubling Down On Disputes And Chargebacks, a PYMNTS and Ethoca collaboration, surveyed a census-balanced panel of 3,557 consumers and 1,036 merchants across Australia, the U.K. and the U.S. to learn more about the factors contributing to the surge in transaction disputes and how local merchants are planning to tackle that surge.

Key findings from our research include the following:

Approximately one-quarter of eCommerce shoppers disputed at least one charge in the last 12 months. Thirty-nine percent of eCommerce shoppers who filed disputes during this time frame report filing more disputes since March 2020 than they did before that time, and many are disputing even more.

Not only do nearly half of eCommerce merchants report seeing more chargebacks now than before March 2020, but 17% report having seen a 25% increase in their chargeback volumes since that date. It follows that 47% of them all say it is more challenging to manage chargebacks now than it was before the pandemic.

Seventy-seven percent of eCommerce merchants are investing in chargeback prevention strategies or plan to do so within the next year. Most merchants intend to make outsourcing central to these strategies, with 52% of all surveyed merchants planning to tap third-party solution providers to aid their fight against chargebacks. Forty-five percent intend to outsource their chargeback prevention strategies entirely.

Statistics like these provide a sense of perspective on how far-reaching the chargeback surge has become, but it is just the beginning of a much more nuanced story about how and why eCommerce shoppers’ propensity to dispute transactions has skyrocketed following the pandemic’s outbreak. Tackling The Chargeback Surge provides a closer examination of this trend and how it impacts the merchants who rely on online sales for their livelihoods.

To learn more about the steps that eCommerce merchants are taking to address the continuing post-outbreak surge in online transaction chargebacks, download the report.