Businesses Warned of Surge in Opportunistic Chargebacks Fueled by COVID-19

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As COVID-19 rages on, business closures and social distancing guidelines are altering the retail landscape. FinTech executive Monica Eaton-Cardone advises online merchants to protect themselves from an oncoming wave of fraud attempts and chargebacks.

In the past few weeks, we’ve tracked an increase in overall chargebacks of about 23%,” Monica Eaton-Cardone says.

In shutting stores and restaurants along with forcing consumers to stay home, the coronavirus crisis has precipitated a massive increase in the volume of ecommerce. One report shows a staggering 40% increase since the declaration of a national state of emergency on March 13.(1) Monica Eaton-Cardone, an entrepreneur and IT executive specializing in risk management and fraud prevention, warns that the sudden boom in ecommerce is already generating a sharp increase in fraud and chargebacks. “In the past few weeks, we’ve tracked an increase in overall chargebacks of about 23%,” Eaton-Cardone says.

Some industries are experiencing more chargeback trouble than others. For instance, a dramatic rise in activity for online gaming sites produced an 18.3% increase in disputes since March 1.(2) A similar pattern holds true for digital content; a 75% surge in transaction volume from March is undercut by a 31% increase in chargebacks.

No industry has felt the impact as intensely as the travel sector, though. Between February and April, some airlines saw chargeback issuances multiply by a factor of 100; based on current trends, a carrier who received 50 chargebacks in January might have received 3,700 filings in February, then 4,500 in March and 5,000 by April. This also doesn’t account for refunds, which still do not preclude a subsequent chargeback. Consumers may, in effect, receive two refunds if the merchant fails to defend the duplicate claim after refunding the transaction.

On the consumer side, more individuals are finding themselves under financial pressure from the pandemic and are (to a greater extent than usual) committing so-called “friendly fraud.” They’re opportunistically using the chargeback mechanism to claim back money they previously spent. There is a definite need for chargebacks as a consumer protection method, especially during a crisis to help consumers recover losses from related issues, such as non-delivery or closed businesses. However, the recent surge in the illegitimate use of this process indicates a shift in consumer behavior. More and more consumers are committing friendly fraud. Considering the rate of unemployment and insecurity, the opportunity to utilize chargebacks to shrink credit card bills or increase one’s bank balance has not gone unnoticed.

To make matters worse, merchants overstretched by order volume, short-staffing, and supply chain/fulfillment problems are neglecting to dispute chargebacks, which is the most effective way to stop repeat friendly fraud behavior. As a result, they are allowing the sales revenue, costs, fees, and associated fines to simply be siphoned out of their bank accounts. Many businesses have virtually shut down, or are on an indefinite pause until this pandemic ends; they’re not contemplating the influx of unforeseen costs and damages that would strike from sales transacted up to 90 days before the COVID-19 crisis even began.

Eaton-Cardone says this is not a sustainable strategy given the severity of the current economic situation and the impossibility of predicting both its duration and the terms of its resolution. Ecommerce merchants are stretched to the limit and need to focus on protecting their own businesses. The best option in dealing with this chargeback situation, she suggests, would be for these merchants to seek assistance from a company specialized in handling disputes, where industry experts are able to clarify and mitigate every disputed charge.

In light of the pandemic and in response to this growing issue, Chargebacks911 has committed to supporting merchants in need by temporarily removing any constraint merchants face in outsourcing chargeback management. The company is providing near-immediate access to revenue recovery tools for merchants without the need for technical integration or ongoing full-time equivalent (FTE) resources. Their services include:

  • No contract to provide immediate support when needed throughout the duration of the crisis
  • No technical integration, allowing merchants to connect to the platform for instant resolution and identification of friendly fraud abuse, as well as the ability to resolve chargebacks and recover revenues
  • A paid-on-performance model; merchants only pay if their chargebacks are recovered and resolved

Merchants can experience relief with virtually no up-front investment and safeguard their revenues in as little as a week. More information about this offer is available here: COVID-19 Chargebacks Relief Package.

“We want to do our best to help merchants survive this crisis. If you’re an online retailer—especially in a high-risk industry like travel or restaurants—you can’t just ignore the chargebacks that are coming in, and you can’t anticipate that tomorrow is going to be better,” Eaton-Cardone says. “You need to prepare for the worst, because that’s the best way to make sure you’re there tomorrow, which is ultimately what your customers want.”

About Monica Eaton-Cardone:
As an acclaimed entrepreneur, speaker, and author, Monica Eaton-Cardone is widely recognized as a thought leader in the FinTech industry and a champion of women in technology. She established her entrepreneurial credentials upon selling her first business at the age of 19. When a subsequent eCommerce venture was plagued by revenue-leeching chargebacks and fraud, Eaton-Cardone rose to the challenge by developing a robust solution that combined human insight and Agile technology. Today, her innovations are used by thousands of companies worldwide, cementing her reputation as one of the payment industry’s foremost experts in risk management, chargeback mitigation, and fraud prevention. Monica Eaton-Cardone is honored to be the recipient of various industry awards. Her own expertise, as well as the services provided by her companies, have been recognized as outstanding by her peers and other industry leaders. For more information, visit

1. “Can eCommerce Overcome The Strain of COVID-19?”,, 1 Apr. 2020,
2. “Studies show dramatic rise in online gambling during COVID-19 lockdowns”, Inside Asian Gaming, 9 Apr. 2020,

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