FEATURE linked to consumers trying to end or cancel a subscription, and over 17 % cited a confusing return or cancellation process as the reason for initiating a dispute.
The majority of consumers aren’ t filing chargebacks out of malice, but in many cases, they do so out of frustration. And that frustration is typically rooted in a lack of communication or distrust, issues that could often be prevented if subscription-based merchants had more transparent, user-friendly offboarding processes.
Regulatory or not, consumer expectations are shifting
Even without a federal mandate, the direction of consumer sentiment is unmistakable. Today’ s customers expect cancellation to be as easy as sign-up. In the subscription economy, convenience and control is the baseline rather than a value add.
Consumers are now demanding parity between onboarding and offboarding, and consumers are quick to call on their bank if merchants aren’ t willing to provide it. And this mindset isn’ t just for subscriptions. In fact, more than 76 % of consumers now prefer to resolve issues through their bank, bypassing merchants altogether. And perhaps more importantly, 88 % say a successful dispute makes them more likely to file another one. This should be treated as a warning to merchants that if your customer service can’ t keep up with the convenience and trust provided by a cardholder’ s bank, you risk pushing that customer into a perpetual cycle of contacting their card issuer every time there is an issue with a product or transaction, resulting in unnecessary chargebacks.
Younger shoppers are leading the chargeback surge
The latest Cardholder Dispute Index also exposes a major generational divide. Consumers under 30 are more than twice as likely to prefer mobile wallets compared to those over 60. Additionally, nearly half of consumers aged 18 – 44 have used Buy Now, Pay Later( BNPL) services, which are particularly prone to billing confusion and subscription-related friction.
These younger, digital-first shoppers are also more likely to skip merchant contact altogether and initiate disputes directly through their banking app. For brands that still depend on multi-step cancellation processes or hard-tofind unsubscribe links, the implication is clear: younger customers will get their money back one way or the other.
And it may not just be one single transaction. When subscription customers dispute recurring payments with their bank, they sometimes dispute multiple payments, including periods where they used or were satisfied with a product or service. This means revenue going back months could be taken away, multiple chargeback penalties assessed and damage to a company’ s merchant account and reputation.
The costs of inaction are rising
Merchants that delay changes to their subscription or cancellation flows are not avoiding costs but merely shifting them. And often, those costs are far greater than they realise.
We estimate that friendly fraud and misuse now cost US merchants over US $ 170 billion annually. Globally, that figure is far higher. This impact on revenue includes lost sales, penalties, reputational damage and operational costs tied to refuting unnecessary disputes.
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Monica
Also consider this: 40 % of cardholders say they often don’ t recognise transactions on their statement due to confusing or incomplete billing descriptors, a small oversight that frequently results in unwarranted chargebacks. That’ s money lost not because of fraud, but because of poor communication and lack of knowledge of their customer experience. Merchants need to take proactive measures to understand not only what it’ s like to shop with them, but what it’ s like to raise an issue.
Eaton, Founder and CEO of Chargebacks911
THE CLICK-TO-CANCEL RULE MAY BE DELAYED, BUT CONSUMER DEMANDS ARE IMMEDIATE, AND WE SEE THE FINANCIAL CONSEQUENCES OF WHAT HAPPENS WHEN BUSINESSES DON’ T MEET THEIR CUSTOMERS HALFWAY. www. intelligentretail. tech 25