One Weird Trick to Get Your Credit Card Charge Reversed? Fraud.

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Sarah Holder** (0:08)
Amanda Mull has been covering retail for years. She's tracked the demise of American malls, the explosion of fast fashion brands, and recently, a growing sense of distrust between customers and merchants.

**Amanda Mull** (0:22)
People feel like they're being scammed left and right.

**Sarah Holder** (0:25)
Sneaky subscription services that are hard to get out of, restrictive return policies, products that just don't meet expectations.

**Amanda Mull** (0:33)
It's a consumer environment where you feel like you have less and less purchasing power, less and less ability to talk to another human about a problem you're having. So people look for ways to get back at retailers.

**Sarah Holder** (0:47)
One of those ways is something called a charge back, essentially disputing a credit card transaction.

**Amanda Mull** (0:53)
It is when you go to your credit card issuer and go, hey, there's a problem with this transaction or I didn't buy that or I don't recognize this. I want you to reverse the charge. I'm not paying for this.

**Sarah Holder** (1:04)
Pushing back on a credit card charge isn't new. But Amanda found that it is happening more and more and more.

**Amanda Mull** (1:12)
From 2021 to 2025, the rate of charge backs in the US rose about 29 percent and worldwide, it rose about 46 percent. Some of that is due to a greater number of credit card transactions overall, but most of that is because people are disputing more transactions for a variety of reasons.

**Sarah Holder** (1:34)
Reasons that range from the legitimate.

**Amanda Mull** (1:36)
Hey, I ordered this thing online. It never showed up.

**Sarah Holder** (1:39)
Yeah.

**Amanda Mull** (1:39)
They are not giving me a refund, but I didn't receive the product.

**Sarah Holder** (1:42)
To the deceptive.

**Amanda Mull** (1:44)
Yeah, I bought this, but I don't want to pay for it. So I'm going to tell the bank that it was fraudulent, that it never arrived, that there was an issue with it. So I will just get this for free.

**Sarah Holder** (1:54)
I'm Sarah Holder, and this is the Big Take from Bloomberg News. Today on the show, how the rise of chargebacks is putting merchants on the defense and pulling banks into the fray, and what this growing trend says about shopper psychology and the health of the economy overall.
For consumers, filing a chargeback can feel like a quick and easy path to getting a refund. But behind the scenes, it actually triggers what can be a long and complicated process.

**Amanda Mull** (2:24)
The bank goes to the merchant and goes, you have a transaction dispute. It charges them a fee, which can be, you know, 10, 15, 20 dollars, depending on the situation, depending on the vendors involved. And the bank investigates. The bank goes, okay, merchant, do you have a tracking number? Do you have shipper information? Can we contact the shipper? And then a lot of times for a very inexpensive transaction on the other end of the spectrum, the bank may look and go, okay, you can have your 20 dollars back. It's going to cost us 20 dollars of labor to even start to look into this, so we're not worried about it.

**Sarah Holder** (2:57)
Okay, so the rate of these chargebacks is increasing, and you looked at some of the reasons why. The biggest example being chargebacks that begin with a simple misunderstanding, what you call friendly fraud.

**Amanda Mull** (3:10)
Yeah, so you've bought something as a consumer in what the banking industry calls card not present transactions. So that's all of online shopping plus things that feel not so much like online shopping, but actually are, which is like ordering an Uber, ordering DoorDash, like anything you use an app for that even if it summons something in real life, that is a card not present transaction.
If you let your teenager put your card in Apple Pay and they start using it for stuff, because card not present transactions tend to bounce through a lot of payments, vendors, and third parties, what they show up as on your credit card statement is sort of anybody's guess. So you might look at all of those things and go, I don't recognize any of these names. Who spent $50 on the app store? Like not me, like why would I do that?

**Sarah Holder** (3:56)
And you're like, where did that charge come from? I need to dispute that charge.

**Amanda Mull** (3:59)
And then there's also the issue of subscriptions. A lot of retailers will include seven days free or one month free and then a recurring $12 every month that you may agree to in like it's a legitimate transaction in a legal sense, but like you missed that. It was put in a place where like it was designed for you to miss it.