Friendly fraud expected to surge 25% over US holiday weekend

‘Friendly fraud’ — when legitimate customers dispute valid purchases — is forecast to jump 25% between Thanksgiving and Cyber Monday, according to ACI Worldwide. The payments technology company analysed billions of eCommerce transactions to reach the projection, underscoring a worsening pattern for global retailers heading into the holiday season.

Retailers lost an estimated $103 billion to friendly fraud in 2024, making it one of the most costly forms of post-purchase abuse. The average value of these transactions is expected to climb to $291 this year, up $52 on last season.

“These numbers are staggering and show just how bold consumers have become,” said Erika Dietrich, vice president of analytics and optimisation, Payments Intelligence, at ACI Worldwide. “Over the past several years, refund abuse and friendly fraud have surged, driven by frictionless eCommerce and amplified by social media. Platforms spread so-called ‘refund hacks,’ making misuse appear socially acceptable, while merchants bear the operational and financial burden.”

Dietrich added that features such as instant refunds and free returns have unintentionally created “loopholes” that opportunistic customers exploit. While many businesses still rely on traditional chargeback systems, these are proving increasingly ineffective against real-time fraud attempts.

ACI Worldwide’s solution — known as Payments Intelligence — combines AI-driven detection, digital identity profiling, and secure merchant data-sharing to identify false claims as they happen. The company says its approach offers “complete journey protection,” stopping chargeback abuse at every stage of the transaction cycle.

According to Cleber Martins, head of Payments Intelligence at ACI Worldwide, the company’s real-time fraud prevention technology is expected to deliver an approval rate of 98% during the holiday shopping period, outpacing the market average of 95%. “We optimise every decision across the entire customer journey, from account creation and checkout to refunds and returns,” Martins said. “By balancing risk and revenue at every touchpoint, we enable our customers to achieve higher profitability without sacrificing the customer experience.”