Chargeback requests have surged since the start of the coronavirus pandemic, as airlines have canceled flights, performers have postponed concerts and supply chain disruptions have delayed the delivery of many goods.
Payments processors are keeping a portion of payments as a reserve against potential disputes between cardholders and merchants. Small-business owners say the practice is eating into their profits.
Reports of improper charges by perpetrators who know the victim soared last year. Issuers and card networks are failing to tighten security, clearly label transactions and police chargebacks, critics say.