Retailers warned of post-holiday surge in chargebacks

Chargebacks911 has warned that retailers face a surge in chargebacks and payment disputes in the first quarter, following a strong online holiday trading period dominated by mobile shopping and buy now, pay later services.

The Florida-based dispute management firm said many of the biggest risks emerge weeks after Cyber Week. It expects a spike in chargebacks 45 to 60 days after initial holiday purchases, when merchants begin year-ahead planning and believe the peak season has passed.

Online holiday spending in the United States is projected at USD $253.4 billion, an 8.6% increase from last year. Mobile commerce is expected to account for 56.1% of online transactions. Buy now, pay later usage continues to rise, which creates more fragmented payment schedules and new post-purchase issues for retailers.

Chargebacks911 links higher sales volumes with a greater likelihood of disputes that arrive after the holiday rush. The company focuses on what it describes as "friendly fraud" by cardholders, which it says is now amplified by widespread use of mobile banking apps and instant dispute tools.

Many consumers dispute transactions when they do not recognise a billing descriptor, experience a delivery delay or wait longer than anticipated for a refund. These actions often bypass the retailer's customer service channels. Disputes then land with issuing banks, sometimes weeks after goods are shipped and seasonal operations return to normal.

Monica Eaton, Founder and Chief Executive of Chargebacks911, said retailers should not treat the end of Cyber Week as the end of risk exposure. "Customers are buying quickly and resolving issues even faster," said Eaton. "When something feels off, many people tap their banking app before checking their order history or contacting the retailer. Without strong post purchase processes, merchants lose revenue they worked hard to earn."

Eaton said the company observes recurring patterns in festive-season disputes. These patterns include delayed deliveries during peak logistics congestion, impulse purchases made late at night that shoppers later fail to recognise, and mismatches between cardholder names and delivery recipients.

She said impatience around refunds adds further strain. Customers who expect near-instant refunds through digital wallets or peer-to-peer tools may not wait for traditional card refund timelines. That impatience can trigger direct disputes with their bank, even when a retailer has already processed a return.

The spread of mobile shopping expects to deepen these trends. Consumers place orders across multiple devices and channels, which can fragment receipts and confirmations. Order details may sit in email, in-app inboxes or merchant portals. This fragmentation makes it harder for shoppers to cross-check a charge before raising a dispute from a banking app home screen.

The growth of buy now, pay later has also altered the dispute landscape. BNPL transactions separate the original purchase from subsequent instalments. Shoppers may review an instalment charge weeks later and not connect it with the underlying holiday order, especially where several BNPL plans run in parallel.

Chargebacks911 said retailers can lower the risk of preventable disputes if they adjust processes before the January dispute window opens. It highlighted billing clarity and communications as immediate focus areas.

The company recommends clear and consistent billing descriptors that match brand names customers recognise. It also urges retailers to send more proactive shipping notifications during peak volumes, and to publish transparent refund timelines that reflect realistic bank processing times.

Chargebacks911 advises merchants to monitor their dispute ratios weekly across December and January. It suggests that merchants use tools that flag potential double refunds and assemble complete evidence packages for banks. The firm said gaps in documentation and inconsistent records often weaken a retailer's position once a formal chargeback has been raised.

Retailers that sell through multiple channels may face additional complexity. Order data, customer communications and fulfilment records may sit in different systems. The company argues that this makes accurate dispute responses harder to compile at speed once banks request supporting information.

Chargebacks911 said its own technology platform uses analytics, automated workflows and broad dispute coverage. It said merchants use these tools to identify new fraud patterns, route cases for review and manage evidence submissions at scale.

Eaton said retailers that invest in post-purchase operations before chargebacks spike stand in a stronger position in the new year.

"Preparation is the strongest defense," Eaton added. "Retailers that reinforce their post purchase experience now will safeguard more of their holiday profits and start the new year in a stronger position."

The company expects dispute volumes to climb in early 2026 as cardholders review holiday spending on their statements and raise more challenges with their banks.