The fast-evolving ecosystem of digital payments is now seeing merchants facing mounting challenges from fraudulent activities that drive up the expense of handling disputes. A recent analysis from Verifi, highlighted in their 2026-focused content on the real cost of disputes, underscores how first-party misuse (often called friendly fraud or FPM) continues to erode profits and complicate operations.
This form of fraudulent activity occurs when legitimate customers dispute valid transactions—whether due to buyer’s remorse, forgotten purchases, or policy abuse—creating costly chargebacks that merchants must resolve.
According to data referenced in Verifi’s reporting tied to the 2026 Global eCommerce Payments & Fraud Report (developed in partnership with the Merchant Risk Council and Visa Acceptance Solutions), resolution costs for first-party misuse disputes have now surpassed $80 per case for the third consecutive year.
This sustained increase reflects not only direct fees from payment networks and processors but also internal operational burdens such as staff time for investigation, documentation, and customer communication.
Merchants lose the original revenue from the sale, face potential penalties for elevated dispute ratios, and incur additional expenses that can multiply the financial hit far beyond the transaction amount itself.
The research report reveals troubling trends in the prevalence of these fraudulent disputes.
Approximately 64% of merchants surveyed globally reported rising rates of first-party misuse, with one in four experiencing jumps of 25% or more.
Enterprise-level businesses appear particularly affected, estimating that first-party misuse accounts for up to 30% of their fraudulent disputes (with overall merchant estimates around 20%).
This growth comes alongside broader increases in related issues: 57% of merchants noted rising refund and policy abuse, while the average merchant encounters roughly 3.7 different types of fraud attacks annually.
Globally, payment fraud continues to claim a meaningful share of eCommerce revenue—around 3.2% on average—highlighting the systemic pressure on businesses of all sizes.
While overall fraud rates by order have shown some stabilization or slight declines in certain metrics, the shift toward first-party misuse represents a more insidious challenge because it often involves authorized transactions that are harder to flag with traditional fraud tools designed for third-party criminal activity.
These findings emphasize why merchants must move beyond reactive dispute management.
Verifi’s perspective stresses using enhanced data quality, real-time insights, and proactive strategies—such as pre-dispute resolution tools and compelling evidence frameworks—to reduce the volume of incoming claims and improve win rates when disputes do arise.
By investing in better customer communication, clearer policies, and advanced prevention technologies, businesses can mitigate the escalating per-dispute costs that have now become a persistent reality.
Ultimately, the 2026 data from Verifi paints a clear picture. That being, fraudulent activities like first-party misuse are no longer a minor nuisance but a core profitability threat.
Merchants who fail to adapt their dispute strategies risk compounding losses in an environment where every dollar of fraud can generate multiple dollars in total costs. The research report from Verifi has now concluded that more proactive rethinking of prevention and resolution approaches offers the best path forward to protect revenue and sustain growth amid these evolving risks.