Chargeback Fraud Is Hitting High-Risk Merchants Harder Than Ever in 2026

Quick answer: Chargeback fraud, disputes filed on legitimate orders rather than actual fraud, is projected to cost merchants roughly $28.1 billion in 2026, and high-risk verticals (CBD, supplements, vape, forex, gambling, adult, peptides) absorb a disproportionate share of it because their subscription models, price points, and category stigma all push dispute rates higher than standard retail. The card networks also just made the math worse: Visa's "excessive chargeback" threshold under its Acquirer Monitoring Program dropped to 1.5% in April 2026, a ratio plenty of high-risk merchants were already brushing up against at the old 1.8% line. ePayVista doesn't fight chargebacks better, it removes the mechanism: payments settle with finality through our rails into an account only you control, so there's no reversible balance for a cardholder's bank to pull back later. Flat 1%, live on WooCommerce in about 5 minutes.

If your dispute rate has been creeping up, you're not imagining it and you're not alone. This guide covers what's actually driving the 2026 increase, why high-risk categories get hit first, what the new VAMP threshold means for your account, and what changes when a payment can't be reversed instead of just being defended.

What is chargeback fraud, exactly?

Chargeback fraud, often called friendly fraud, happens when a customer disputes a charge with their card issuer instead of contacting the merchant, even though the order was legitimate, the product arrived, or the service was delivered as described. It's distinct from true fraud (a stolen card being used without the owner's knowledge). The customer got what they paid for and disputes it anyway, because a chargeback is faster than a refund request and the odds of the bank siding with them are good.

Industry research puts first-party (friendly) fraud at more than 45% of all chargebacks by Mastercard's count, and as much as 30% of disputes for high-volume online merchants by Visa's estimate. It isn't a fringe problem. For a lot of merchants, it's the majority of what shows up on their dispute report.

Why is chargeback fraud rising in 2026?

A few forces are compounding at once:

• Friendly fraud is accelerating. Industry surveys show more than 83% of enterprise merchants reporting a rise in friendly fraud over the past three years, with forecasts pointing to a roughly 40% increase in cases by 2026.
• Refund abuse is now a named line item. Merchants estimate abusive return and refund requests account for over a quarter of all returns, and a majority describe refund abuse as a moderate-to-significant concern, separate from chargebacks entirely.
• BNPL adds a new dispute vector. A large share of merchants believe buy-now-pay-later purchases carry higher chargeback exposure than standard card payments, since the dispute window and the payment schedule don't always line up cleanly.
• AI-enabled fraud schemes are scaling. The overwhelming majority of merchants surveyed express concern about AI being used to automate dispute filing or generate more convincing fraudulent claims at volume.
• The network math tightened. Visa's VAMP threshold, the ratio that triggers mandatory monitoring, dropped from 1.8% to 1.5% in April 2026. A dispute rate that was survivable two years ago can trigger a monitoring program today, and a won dispute (representment) doesn't remove it from your ratio, only prevention does.

Why do high-risk merchants absorb more of it than anyone else?

Chargeback fraud doesn't land evenly across industries. High-risk categories carry structural pressure that low-risk retail simply doesn't:

• Subscription and auto-ship billing. CBD, supplements, and peptide brands running recurring charges see forgotten renewals turn into "I didn't authorize this" at the bank instead of a cancellation request to the merchant.
• Category stigma at the issuing bank. A cardholder's own bank is more likely to approve a dispute reflexively when the statement line reads CBD, vape, adult, or gambling, independent of whether the merchant did anything wrong.
• Outcome-based disputes. Forex and gambling deposits get disputed after a losing trade or an unfavorable bet, even though the transaction itself was completely legitimate and authorized by the customer.
• Elevated baseline rates. Chargebacks911's own high-risk research puts typical vape dispute rates between 0.75% and 2%, a band that straddles the new 1.5% VAMP line depending on the month.

None of this reflects worse products or worse customer service. It's how card-network dispute rules interact with these specific categories, and it's why a "manage chargebacks better" tool only ever treats the symptom.

What happens once you cross the threshold

Crossing 1.5% isn't a warning letter, it's the start of a countdown:

A single dispute is a rounding error. A dispute rate above the threshold is a countdown, and high-risk verticals start closer to the line by default.

Does representment or a chargeback-alert tool actually fix this?

Partially, and only for the immediate case. Representment services fight individual disputes with evidence packets and win some of them back, but a won dispute is still a filed dispute; it stays on your ratio even after you get the money. Alert tools flag a dispute before it fully finalizes so you can issue a voluntary refund instead, which does help your ratio, but it depends on catching every alert in real time and still assumes the underlying payment stays reversible for months after checkout. Both are reasonable patches. Neither changes the fact that a card payment is provisional until the dispute window closes, sometimes 120 days or more depending on the network and reason code.

What actually removes it

A chargeback exists because a card payment can be pulled back by the issuing bank on the cardholder's word, long after the order shipped. ePayVista changes what happens after checkout, not the checkout itself: your customer still pays by card exactly as they do today. From there, the payment settles through our managed, non-custodial settlement layer, our rails, and lands in an account only you control. That settlement is final, so there's no reversible balance sitting behind it for a bank to invoke months later.

That's the structural difference between managing disputes and removing the pathway they travel on. For the full breakdown of how settlement finality replaces chargeback defense entirely, see the no chargeback payment processor guide.

Is this hitting your vertical specifically?

• CBD & hemp - subscription auto-ship drives recurring disputes.
• Supplements & nutra - free-trial and auto-ship models spike friendly fraud.
• Vape & e-cig - category stigma pushes bank-side dispute approvals, dispute rates already straddle the new VAMP line.
• Forex & trading - deposits disputed after a losing trade, not a processing error.
• Gaming & iGaming - the same pattern after an unfavorable bet.
• Adult - among the highest friendly-fraud rates of any consumer category.
• Peptides & research - high price points mean high dispute stakes per transaction.

FAQ

Stop absorbing fraud you didn't create

The numbers for 2026 aren't trending in high-risk merchants' favor: a lower VAMP threshold, rising friendly fraud, and dispute categories (BNPL, AI-generated claims) that didn't exist a few years ago. Fighting each dispute one at a time doesn't change the ratio math. Removing the reversible window does.

Download the WooCommerce plugin and start taking card payments settled into an account only you control, flat 1%, with no chargeback ratio to manage in the first place.

ePayVista helps legal high-risk merchants accept card payments and receive settled funds into an account they control, for a flat 1%, with no chargebacks and no freezes. Setup is a WooCommerce plugin, not an underwriting application.