The annual rush creates record-breaking sales and an influx of disputes. Increased order volume, gifts that aren’t clearly marked as to their recipients, and shipping delays complicate the holiday season, which—without proper preparation—results in chargebacks. Moreover, increased fraud targeting under-staffed teams and slower manual review processes attempt to capitalize on the chaos. Without a specific chargeback prevention strategy for the peak season, merchants will face reduced margins, increased processing times, and account re-evaluations when they need revenue most. In 2025, retailers need ways to reduce friendly fraud during peak season, catch actual fraud in the early steps, and provide proven rapid resolutions for the customer.
Why Chargeback Prevention is Important During the Holidays
Holiday traffic is the perfect storm for mistakes and malicious attempts. Gift recipients fail to identify descriptors, carriers fail to meet their delivery windows, and omnichannel customer service inquiries have extensive wait times. On the other hand, fraud rings look to deploy compromised cards and bots to test stolen credentials. More substantial chargeback fraud prevention safeguards revenue, ensures approval rates stay in place, and keeps acquirers happy concerning the state of your account[1]. The necessary setup reduces workload after the fact by preventing such transactions from becoming problematic.
Where Retailers Struggle During the Peak Season
Short lead times, promotional windows, holiday returns, and international sales complicate chargeback prevention strategies. Split shipments and backorders increase ‘item not received’ claims; digital goods and curbside pickup create evidential challenges; new customers complicate score risk assessments. Chargebacks could represent the best option if refund policies are not made clear and employees need guidance concerning preventing chargebacks and utilizing consistent communication regarding dispute alerts[2].
Merchant Account and Gateway Impact
Your gateway and acquirer help define how to prevent chargeback fraud at scale. Gateways maintain AVS checks of device classifications and user behavior, step up authentication during promotional windows, and rules that adapt in real-time. In addition, they send the necessary elements into dispute responses—order confirmations, deliverable proof, and history of prior transactions. Acquirers get you early notifications and improved access to network rules changes accompanying your ratio data[3]. Partner with providers that publish approval levels versus dispute levels over time, with real-time notification systems and appropriate descriptors during peak.
Why Customer Experience Matters During the Holidays
If a customer is disputing because they cannot answer their question quickly enough, that’s a problem. Visible support options, live chat operations and expected turnaround times enhance frustration levels; reminders about delivery, where applicable, remind customers who register “item not received” claims without source interactions. Honest backorder opportunities coupled with easy exchanges promote goodwill, which avoids other issues down the road. Thus, an improved customer experience becomes a part of successful chargeback prevention.
Six Strategies to Reduce Holiday Chargebacks
Smart Address, Identity and Device Checks
Utilize AVS checks in conjunction with CVV checks, device fingerprinting, IP reputation accessibility and velocity rules that narrow as promotions increase; for cross-border purchases, adjust your AVS limitations based on region; deny problematic mismatches without clarity or require enhanced verification at point of sale for high-risk buyers (new buyers needing overnight shipping).
Targeted 3-D Secure and Step Up
Use 3-D Secure or identity confirmation on vulnerable subsets—not all traffic. This includes high-ticket items, new buyers or ones that have initiated sale processes that generated red flags in the first place; leave the rest of checkout process expedited for approval ratings.
Clear Policies, Descriptors and Communication
Clearly articulate time windows for shipping deadlines, cutoff times for holiday orders/returns, and return requirements written in a way that's easy to understand. Make descriptors clear (brand name and website) while sending appropriate tracking info (and door delivery photos) where applicable; empower self-service for cancellation or address mistakes to prevent disputes right off the bat.
Delivery Proof/Pick Up Controls
Capture image proof of delivery, preferably with a picture sent at delivery (where applicable) or signature of delivery (higher value shipments). With buy-online-pick-up-in-store or curbside features on lower-value as well, keep ID checks on premise with store associates' initials. Save this info with the original order to support all attempts after the fact.
Early Alerts/Fast Refund Options
Enroll in dispute alert options within acquirer setups so you can refund or respond before chargebacks ever are initiated. Channel alerts into a specialized queue with SLA requirements regarding response time; when you owe the customer a refund, give it early and close the communication loop before escalated feedback threatens your account status or the customer's goodwill.
Data-Driven Dispute Responses
Automatically generate evidence packets utilizing order confirmation details from prior undisputed transactions matched through IP checks/devices/delivery verification/policy acknowledgment. Gauge win rates across issuers by reason code; use those results to adjust your rules with shipping methods and step-up processes where applicable.
The Future of Chargeback Fraud Prevention This Holiday Season
Next year’s holidays will likely usher in more automated shopping agents—higher wallet utilization across retailers means better transactions for those who don’t cross-departmental. Yet, all depend on enriched signals to distinguish good orders from bad. Evidence improvements will continue to change, so keeping structured delivery/order data over time is critical for teams focusing on targeted authentication, alerting early on and fast information delivery without slowing down the customer process through peak volumes (however high)[4].
FAQs
Q: What’s the fastest way to prevent holiday chargebacks without hampering conversion?
A: Leverage data integrity and targeted mitigation efforts first. Turn on AVS/CVV checks, device fingerprinting, and velocity processes as appropriate, then apply 3-D Secure only as necessary (high-risk first-time buyers, high ticket options, and new buyers). Improve descriptors and tracking time updates as well—they’ll reduce issues while keeping your checkout fast.
Q: How do I address claims for items not received based on carrier delays?
A: Communicate what’s happening immediately; set expectations. Give tracking links proactively; give door images via tracking when applicable; give flexible options to provide either quick reship or refund options where needed, but document requests either way so you can approach appeals better when needed.
Q: What’s the best type of evidence for winning chargebacks?
A: Decision-makers look for a consistent story—order details from prior undisputed transactions highlighting device matches, IP confirmations, proofs of delivery, and acknowledgement of policy acceptance, plus proofs from support or follow-up afterward if applicable. Organize evidence against reason codes so analysts can respond quickly; leverage methodology over time to refine which shipping methods or rules worked best by issuer.
Q: Do wallets or one-click checkout increase chargebacks? Decrease them?
A: Wallets usually increase approval rates and decrease application errors, which generally reduce disputes, but risk management continues to matter; combine wallets with device intelligence on top of them—step up only for high-risk segments—and note your refunds and returns associated with wallet buyers having options so they don’t go to their bank instead.
Q: Should small retailers use dispute alerts?
A: Absolutely—they give you time before chargebacks are issued, which is especially valuable during holidays when volume load increases wait times in any other queue. Measure how many alerts you convert either way and adjust risk management policies onboard, such as repeat offenders at different retailers, so they don’t happen again with you.
Sources
- Visa. “Payment Security and Dispute Guidance for Merchants.” Accessed October 2025.
- Mastercard. “Fraud and Chargeback Resources for Businesses.” Accessed October 2025.
- PCI Security Standards Council. “PCI DSS Resources for Merchants.” Accessed October 2025.
- Federal Reserve. “Payment Systems and Consumer Protections.” Accessed October 2025.
