New Chargebacks911 Study Reveals Top U.S. Cities With Highest Chargeback Statistics

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Dispute-mitigation and risk-management company Chargebacks911 pinpoints U.S. locales with highest rates of chargebacks for credit card disputes; co-founder Monica Eaton-Cardone cautions businesses to be alert to “friendly fraud” in those areas.

Chargebacks 911

Consumers who have a legitimate concern about their purchase should first give the merchant an opportunity to make things right before resorting to a chargeback.

Chargebacks911, a division of Global Risk Technologies, has released new study findings that reveal the U.S. cities with the highest rates of chargebacks for credit card disputes. Co-founder Monica Eaton-Cardone noted that the dispute mitigation and risk management services company has published the study results to illustrate the growing trend of transaction dispute chargebacks and their potential link to “friendly fraud.”

The study’s chargeback statistics reflect the number of credit card disputes resulting in chargebacks as a percentage of total transactions, with the results tallied by cardholders’ billing ZIP codes. Researchers analyzed records of 500,000 chargebacks and relative transactions for e-commerce purchases made in 2013.

When Chargebacks911 compiled the top cities for card-not-present chargebacks, there were a number of tied results. Consequently, there are 16 different ZIP codes represented among the top five chargeback rankings, including multiple cities in California, Florida and New York:

1. 2.2% chargeback rate: Show Low, AZ 85901
2. 1.7% chargeback rate: Port Washington, NY 11050
3. 1.5% chargeback rate (3-way tie): San Jose, CA 95131; Astoria, NY 11105; and Miami, FL 33145
4. 1.4% chargeback rate (2-way tie): Chicago, IL 60646 and Sherman Oaks, CA 91423
5. 1.3% chargeback rate (9-way tie): Sarasota, FL 34234; Los Angeles, CA 90057; Woodland Hills, CA 91364; Orlando, FL 32836; Whittier, CA 90603; Alhambra, CA 91801; Plainview, NY 11803; North Hollywood, CA 91602; and Houston, TX 77067

The above rates alarmingly eclipse the approved threshold percentage for chargebacks (set by Visa and MasterCard) should remain below 1%.

Chargebacks may be processed for a number of reasons, including identity theft, overcharges or failure to receive a promised product or service. However, Eaton-Cardone asserts that a growing number of chargebacks are due to a practice known as “friendly fraud,” in which consumers authorize a purchase and receive the goods or service but subsequently attempt to reverse the charge.

While the study data analyzed by Chargebacks911 did not specify the reasons for the credit card disputes, Eaton-Cardone reports that as much as 86% of chargebacks may be fraudulently filed by consumers.

“We’ve found that 58% of cardholders never contact the merchant before filing a transaction dispute, and another 28% only contact the merchant after the dispute had already been filed,” she explained. “Consumers who have a legitimate concern about their purchase should first give the merchant an opportunity to make things right before resorting to a chargeback. The fact that so few are doing so suggests a potential for dishonesty or laziness. What’s worse is that some credit-card issuers and banks actually encourage such behavior by emphasizing ‘zero liability’ in their credit offers and requiring minimal substantiation for transaction disputes.”

Eaton-Cardone maintains that merchants, credit-card issuers and consumers all have a responsibility to work together to prevent friendly fraud, since the trickle-down costs affect all of them in terms of reduced profits and increased prices. Chargebacks911 supports merchants and banks/credit-card issuers through its dispute mitigation and risk management services, while sister company eConsumerServices provides transaction mediation between consumers and merchants.

As for the Chargebacks911 study findings, the data yielded additional information beyond the locations with the highest chargeback percentages. Researchers found that the study demographics skewed heavily female (74%), the average transaction charge was $58 and over 85% of all purchases were tangible goods shipped directly to the consumer. Some of the more commonly disputed charges included insurance, recurring health and beauty purchases, software, clothing, shoes, cosmetics, home goods and electronics.

According to Eaton-Cardone, the higher chargeback levels recorded in certain cities are likely related to consumers’ financial hardships.

“Many of the ZIP codes with high chargeback percentages are in areas with lower median incomes and higher unemployment rates,” she observed. Citing a National Retail Federation (NRF) survey on organized retail crime (2), Eaton-Cardone pointed out a possible correlation between the top cities for retail theft and those with frequent chargebacks: “Friendly fraud is essentially a form of online shoplifting. So I’m not surprised to see some overlap among the top five rankings in both studies, including Los Angeles, Miami, Chicago and Houston.”

Chargebacks911 has published the study’s chargeback statistics online as an interactive map with rankings of the top 250 U.S. cities. For additional details on the study or to arrange an interview with Monica Eaton-Cardone, contact JoTo PR at 888-202-4614, extension 802. To learn more about Chargebacks911 and its dispute mitigation and risk management services, visit

About Global Risk Technologies and Chargebacks911:

Global Risk Technologies is most known for its role in payment processing solutions that cater to each side of the value chain: and The firm is headquartered in Tampa Bay, Florida, with offices in Ireland and Atlanta. They have approximately 350 employees worldwide and currently manage over 150MM in transactions each month, with clients located in the U.S. and Europe.

Chargebacks911 is a division of Global Risk Technologies, and was developed specifically for merchants to offer immediate aid through proprietary technology and provide the necessary function that gives merchants the freedom to focus on their core competency and optimize their in-house skill set. Chargebacks911 focuses on chargeback mitigation and risk management. They specialize in servicing Internet merchants and acquiring banks, offering dispute response solutions and deep analytics. Chargebacks911 works with their client base to help them keep dispute rates down and retain their ability to accept credit cards. For more information, visit

1. Chargebacks911. “Top 250 ZIP Codes for Chargeback Percentages in the USA” (interactive map and rankings); November 2014.

2. National Retail Federation. “A Decade Later, Organized Retail Crime Still Major Problem for Retailers” (press release); May 20, 2014.

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Karla Jo Helms
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