AI can be a valuable tool in identifying and preventing chargeback fraud — a growing problem — but only if transaction data is adequately collected and available in a centralized location.

“Just in 2025, we saw $34 billion in debit and credit chargebacks globally,” Dave Pirtle, vice president of enterprise engagement at Chargebacks911, said in an Aug. 12 webinar hosted by e-commerce bookkeeping company Webgility.

About 261 million chargebacks were filed in 2025, according to a Jan. 29 report from Mastercard and Javelin.

“By 2028, we’re projected to have a 24% growth in chargebacks, which is going to equal 324 million chargebacks — that’s not dollars, that’s chargebacks,” Pirtle said.

While many chargebacks are legitimate, chargeback fraud occurs when someone makes a purchase and then files a chargeback on their credit or debit card with false claims of never receiving the goods, receiving damaged goods or other complaints.

ALSO READ: Visa takes on not-so-friendly fraud

The cost of chargebacks for merchants can include lost merchandise, lost transaction revenue, chargeback fees from FIs and expenses for fraud-prevention staffing and technology, Pirtle said.

AI fights fraud

Visa, which added six dispute resolution tools to its portfolio in April, processed 106 million disputes globally in 2025, a 35% increase since 2019, a company spokesperson told FinAi News. Visa processed 21% more transactions in fiscal 2025 than in fiscal 2019, according to the company’s annual reports.

Mastercard’s return risk intelligence uses AI to analyze transactions to identify patterns and behaviors that correlate with chargeback fraud, a company spokesperson told FinAi News.

Chargebacks911’s AI-powered dispute management software helps merchants aggregate and analyze chargeback data, generates alerts to prevent fraudulent chargebacks and supports merchants in reversing fraudulent chargebacks, according to the company.

E-commerce opportunities

More e-commerce channels create business opportunities by increasing a merchant’s visibility and reach, Pirtle said.

“The growth is amazing,” he said. “But e-commerce is typically where you would get the exposure of chargebacks.”

Chargebacks911’s 2026 Chargeback Field Report released July 1 reported that 83.4% of enterprise merchants said they had seen chargeback fraud increase in the past three years. And 38% of respondents said the chargeback costs are being passed on to consumers through higher prices.

Data centralization

Each transaction is “going to create a lot of different data, and that data is usually going to be fragmented,” Pirtle said. “It’s going to be all over the place.”

Data that can help detect and prevent chargeback fraud includes:

• Customer history;
• Banking information;
• Communication with customers;
• Information collected by third-party e-commerce platforms; and
• Reports from delivery services.

As this data will likely live in multiple places, e-merchants should invest in AI workflow tools that can aggregate the information, Pirtle said.

“I just met a merchant that was literally using a team of 150 people just to respond to chargebacks,” Pirtle said. “That blows my mind when I hear that because these individuals are … pulling in casework, looking at screenshots, going to 15 different portals — and you just can’t scale like that.

“Unless data is in one spot, ready, and you actually build technology around it, you’re not going to be able to scale it.”

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