Every holiday season, small businesses lose thousands, sometimes tens of thousands, in chargeback losses. They achieve record-breaking sales but have no protection in place when fraud hits.
Chargebacks aren't one-size-fits-all. Each industry has its own fraud patterns, peak risk windows, and hidden costs. Here's what the data shows for businesses like yours.
Apparel is the most-targeted ecommerce category for return fraud and friendly fraud. Chargebacks in this category are most often filed as "item not as described", frequently by buyers who wore or used the item and then disputed the purchase.
An estimated 13.7% of apparel returns in 2023 were fraudulent, representing $101 billion in losses across the industry. Friendly fraud, or chargebacks filed on legitimate purchases, accounts for an estimated 70–80% of all disputes in this category.
If you're doing $500K in holiday sales and your chargeback rate hits 1%, you're looking at $5,000 in lost orders. That's before fees, shipping losses, and labor. At a true cost multiplier of about $3.75 per dollar disputed, it's closer to $18,750 in real damage.
Health and beauty sites have a chargeback problem that goes beyond one-time fraud. Subscription products face 2–3x the industry-average dispute rate because customers use chargebacks as a shortcut to cancel rather than contacting the merchant.
Chargebacks in health & beauty rose 48% year-over-year in Q4 2022, driven by account takeover fraud and false "not received" claims on high-value orders.
Subscription businesses face an especially painful version of this. You've already shipped the product. The customer already used it. The chargeback still lands.
High value per order makes jewelry the most expensive chargeback category on this list. One disputed $400 necklace costs you more in real terms than five disputed $40 T-shirts, before you even count the fees.
Online jewelry fraud jumped 47% in 2022, concentrated in the October–January window. Because gift purchases look anomalous by definition — one-time buyers, unusual shipping addresses, high-value orders — fraud is harder to catch without the right tools.
A single fraudulent high-value order can wipe out your profit from 10–15 legitimate sales in the same category. Without chargeback protection, you're betting on every jewelry order being legitimate.
Auto parts are valuable, easily resold, and almost impossible to verify receipts. 'Item not as described' and 'wrong fitment' chargebacks are common. Sometimes they are filed legitimately, but often not.
Automotive ecommerce saw a 98% increase in suspected digital fraud transactions from 2019 to 2022, the steepest increase of any retail category tracked by TransUnion in their 2023 study.
If your store processes B2B orders or large-quantity purchases, the risk is even higher. Bulk orders that get disputed can create multi-thousand-dollar chargebacks in a single transaction.
Power tools, fixtures, and smart home devices are high-value items that move fast over the holidays. They're also high on fraudsters' lists. The FTC flagged online purchase fraud in home improvement as one of the fastest-growing complaint categories in 2022.
Fraud complaints in home improvement ecommerce were up 27% year-over-year in 2022. High-ticket orders placed under urgency (installation deadlines, contractor timelines) are especially vulnerable to dispute after delivery.
Home improvement buyers often purchase at high average order values. A single disputed power tool or appliance can create a chargeback large enough to affect your processing rate.
Fitness equipment, outdoor gear, and athletic apparel see huge demand spikes in November through January, and fraud spikes with them. High demand creates cover for 'item not received' fraud, because supply chain delays make the claim plausible.
Sporting goods saw a 63% increase in ecommerce fraud attempts in Q4 2022. The combination of elevated average order values and high consumer demand during the holidays creates ideal conditions for both opportunistic fraud and friendly fraud.
Popular items with limited availability (think specific shoe sizes, in-demand bikes, or smart fitness equipment) are especially targeted. A fraudster knows you're unlikely to have a replacement to reship, making 'not received' claims harder to win.
