Black Friday Returns Trap: Why Tighter Policies May Actually Increase Fraud

Retailers entering the Black Friday peak season face a growing correlation between restrictive return policies and rising chargeback volumes. As merchants attempt to curb $100 billion in annual return fraud and policy abuse through fees and tighter windows, new data suggests these frictions may inadvertently drive legitimate customers toward the dispute system, creating a more expensive "friendly fraud" problem.

What was announced

Chargebacks911 has highlighted a critical shift in the retail landscape where the traditional management of returns is increasingly impacting the dispute ecosystem. According to data from Appriss Retail’s 2026 Total Retail Loss Benchmark Report, US retailers processed $706 billion in returns last year. Within that figure, $100 billion—or 14.2%—represented preventable fraud and abuse. This is further categorized into $14 billion in outright fraud and $86 billion in policy abuse, which includes behaviors such as "wardrobing" and "bracketing" that exploit return windows without technically breaking laws.

The merchant response has largely focused on introducing friction, such as adding return fees and narrowing return windows. However, research from eMarketer indicates these measures may be counterproductive; 44% of merchants who introduced return fees saw fraud rates increase, while only 42% saw them fall. Furthermore, the NRF and Happy Returns 2025 Retail Returns Landscape Report found that nearly two-thirds of consumers admit to at least one costly returns behavior despite these restrictions.

The financial impact is compounded by the risk of losing future business, as eight in ten shoppers state that a positive returns experience increases their likelihood of a repeat purchase. Chargebacks911’s own 2026 Chargeback Field Report found that 27.1% of merchant returns already involve some form of refund abuse, and 61.8% of merchants report that chargebacks have increased over the past three years, with friendly fraud outpacing overall chargeback growth.

The companies involved

Chargebacks911 is a global leader in dispute resolution and chargeback management, providing technology and services designed to help merchants identify the root causes of chargebacks and mitigate the impact of friendly fraud. The company is a subsidiary of Global Risk Technologies, an international organization specializing in risk management and loss prevention for the payments industry. Since its inception, Chargebacks911 has established itself as a dominant force in the post-transactional space, focusing on the bridge between merchant policies and banking dispute systems.

The company operates in a market where the distinction between customer service issues and payment fraud is increasingly blurred. By analyzing data across the entire customer journey, Chargebacks911 aims to provide merchants with the visibility needed to differentiate between genuine customer dissatisfaction and systematic policy abuse. Its position in the market is defined by its focus on "friendly fraud"—a sector of the payments industry that has historically been difficult for merchants to challenge effectively without sophisticated data integration.

What FF News has reported before

FF News has followed Chargebacks911’s expansion and its warnings regarding the evolving nature of retail fraud. Recently, the publication covered how Chargebacks911 Debuts First AI Agent Purchase Indemnification to Shield Merchants from Agentic Commerce Risks, addressing the rise of automated buying systems. The company also recently strengthened its leadership team, as seen when Chargebacks911 Appoints Kount Founder Brad Wiskirchen to Drive Global M&A and Expansion.

Earlier this year, the firm issued a warning that the Golden Quarter could leave retailers facing a new year chargeback hangover, a sentiment echoed in their report on the Friendly Fraud Crisis, which suggested merchants may be underestimating their total losses by half.

What this means

The retail industry is reaching a breaking point where traditional "siloed" management of returns and disputes is no longer sustainable. When merchants tighten return policies in isolation, they risk pushing frustrated customers toward the chargeback process, which carries higher administrative fees and threatens merchant account standing with card networks. This "returns-to-chargeback pipeline" suggests that the industry must move toward unified data systems that can track a customer’s behavior from the point of return through to the dispute phase. The real pressure now lies on payment processors and gateway providers to offer better integration between these two historically separate functions to prevent "friendly fraud" from becoming an unmanageable cost of doing business.