As we settle into 2025, the chargeback and fraud prevention landscape continues to evolve rapidly. AI Advancements and automation are reshaping fraud detection, offering businesses new ways to safeguard revenue and streamline operations. However, these innovations also bring challenges that demand proactive strategies. 

The stakes have never been higher. A Juniper Research report projects that merchant losses from online payments fraud and chargebacks will exceed $362 billion globally between 2023 and 2028, with $91 billion lost in 2028 alone. As fraud schemes grow more sophisticated, businesses that fail to adapt risk significant financial setbacks, operational disruptions, and reputational damage. 

To help merchants navigate this shifting landscape, I’ve gathered insights from industry leaders, offering predictions, context, and practical strategies to turn these insights into results.

1. Automation Will Redefine Chargeback Management in 2025

Rayla Rappaport, Head of Product Marketing at Finaloop, emphasizes the importance of automation in getting ahead of fraud: ‍

“Using automation to get smarter data will be vital in 2025. Automation tools can flag potential fraud earlier, giving businesses a head start in reducing chargebacks next year." 

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‍By streamlining the dispute process and ensuring faster, more accurate responses to claims, these tools help eCommerce brands save time, protect revenue, and build customer trust. This aligns with the broader trend of using automated tools to manage disputes, improve operational efficiency, and increase customer satisfaction. 

2. AI in 2025: Transforming Fraud Detection and Chargeback Prevention

Nate Matherson, Head of Growth at Numeral, points to the transformative power of AI in chargeback prevention:

‍“Advancements in AI models, like those developed by OpenAI and Anthropic, are revolutionizing chargeback management by enabling highly accurate fraud detection and real-time analysis.”

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‍AI-powered tools provide merchants with real-time insights, allowing them to detect potential risks before they escalate.

3. Policy Changes and the Surge in Chargeback Rates for 2025

Daniel Monte, Director of Client Strategy at Sendlane, predicts a potential increase in chargeback rates due to shifting refund policies: ‍

‍"I believe chargeback rates will increase in 2025. Many retailers are moving toward a no-refund, exchange-only policy, and as a result, more customers—especially influencers and micro-influencers—may resort to disputing charges to recover their funds. From an automation perspective, it’ll be critical for retailers to communicate their newest changes via transactional messages." 

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‍The answer is to provide clear communication and proactive customer engagement to mitigate disputes arising from changed refund policies. Retailers need automation to keep customers informed and satisfied. 

4. Why Proactive Chargeback Management is Crucial in 2025

Maurice Griefer, Founder & CEO at MyCPO, stresses the importance of taking chargeback management seriously in 2025, especially for subscription-heavy businesses:

‍“Chargeback rates are expected to rise in 2025, particularly for businesses with high subscription volumes. Proactive chargeback management is crucial.”

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‍To minimize disputes, merchants must implement robust fraud screening, leverage chargeback automation tools, and prioritize excellent customer service. Ignoring chargebacks can damage a business’s processing history and lead to higher costs.

5. Using Data to Reduce Chargebacks in 2025

Mia Healy, Director Tech Partnerships at Triple Whale, highlights the importance of leveraging data-driven decision-making: 

“Data-driven decision-making can significantly reduce chargebacks in the coming year by identifying patterns in customer disputes, optimizing fraud detection systems, and improving transaction accuracy.”

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‍Leveraging predictive analytics will also help businesses proactively address potential chargeback triggers, enhancing customer satisfaction and operational efficiency. Discover how Triple Whale's AI-powered assistant, Moby, transforms your businesses! The role of predictive analytics in streamlining fraud detection and improving operational efficiency is set to redefine chargeback management in 2025.

6. How Rising Customer Expectations Impact Chargebacks in 2025

Stefany Ludena, Tech Partnerships EMEA at Gorgias:

‍“In 2025, as customer expectations for faster responses continue to rise, unresolved inquiries and delays in communication could contribute to higher chargeback rates.”

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To mitigate this, businesses should leverage AI and automation to provide instant answers and proactive updates, such as automated order changes or self-serve portals for returns. These customer-first resources can help companies reduce disputes, encourage exchanges, and build loyalty, ultimately minimizing chargeback risks.

7. Subscription Fatigue and Its Impact on Chargebacks in 2025

Mathew Holman, Fractional Subscription Leader at Subscription Prescription:

“The danger I see in 2025 is how people may react to too many subscriptions or forget about them. Customers will pull back on subscription payments and the easiest way to do that is through their credit card app - with a quick dispute.” 

8. Growth Strategies for 2025: Protecting Merchant Accounts

Jimmy Kim CEO & Co-Founder at eCom Email Marketer:

“In 2025, we’ll witness the rise of creator-led brands as creators increasingly realize their power in driving brand distribution.”

Owning and launching their own products will become the ultimate growth strategy for their businesses. With this surge in general traffic and transactions, safeguarding merchant accounts will be more critical than ever to ensure seamless operations and sustained growth. 

9. Verification and Integrity: Combating Fraud in 2025

Ben Herut, Director of Risk at Chargeflow:

“2025 is likely going to be more difficult for business due to the rise of AI, mainly because fraudsters will be using that to create deepfakes and other online scams.”

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This will force people to battle AI imposters, making these scams much harder to spot. Therefore, investing in credibility and verification systems and helping consumers understand such scams would help curb such acts. 

Importantly, protecting the integrity of the chargeback mechanism requires improving the chargeback dispute process with new technologies and enhancing cooperation between participants in the industry. This helps with ensuring these chargebacks, created as a means of protection for the consumer, are not used in ways that damage the system and current merchants.

10. Friendly Fraud and Policy Abuse: Merchant Challenges in 2025

Avia Chen, Co-Founder & CMO at Chargeflow:

‍“In 2025, merchants will see a notable surge in friendly fraud driven by frictionless checkouts, simpler dispute filing, and lenient refund policies, allowing customers to exploit chargeback processes by filing false claims.” 

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Return fraud and policy abuse will also rise as opportunists capitalize on generous return windows, switch items, and make fraudulent refund requests. This combination of intentional chargeback manipulation and return policy exploitation will demand tighter oversight, more granular customer verification, and sophisticated AI-driven solutions to distinguish genuine refund requests from abusive schemes accurately.

11. Proactive Prevention and Collaboration: Shaping 2025 Fraud Management

Ariel Chen, CEO of Chargeflow: ‍

"2025 is poised to bring even more sophisticated fraud detection methods with a greater emphasis on proactive chargeback prevention. Rapid advances in AI-powered tools will enable merchants to spot suspicious activity earlier, reducing potential losses and improving the customer experience.”

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At the same time, Ariel highlights the evolving consumer landscape. With increasing reliance on mobile wallets and contactless payments, businesses must implement new layers of security and authentication to ensure seamless yet secure user experiences as a central focus.

Collaboration across the payments ecosystem will be critical. 

Merchants, payment processors, and technology providers are expected to intensify their collaboration, which will be essential for staying ahead of increasingly organized fraud rings. Unified efforts will pave the way for minimizing chargebacks through early interventions, real-time intelligence, and adaptive strategies – ensuring the industry remains resilient in the face of emerging threats. 

The Path Forward: Chargeback and Fraud Prevention in 2025

The insights shared by industry leaders make one thing clear: 2025 will demand a proactive, data-driven approach to chargeback and fraud prevention. With global merchant losses from online fraud expected to surpass $362 billion, businesses must embrace AI and automation to detect fraud early, streamline operations, and safeguard their bottom line.

As fraud tactics evolve, collaboration across the payments ecosystem is crucial. With real-time insights and adaptive strategies, merchants can turn challenges into growth opportunities. The future of chargeback prevention starts with action – are you ready?