Jodi Lifschitz
Head of Content
Table of contents

Who files a dispute? The consumer. 

It is easy to forget this all-important fact. Many of us lose our focus on the minute and technical aspects of our chargeback strategy. Things like fraud prevention, data analysis tools, and machine learning take our attention—and we forget about the person who actually files the chargeback. But at its root, chargebacks are a result of personal behavior. Human motivation is what drives disputes. 

So what prompts a customer to file a chargeback? What factors convince someone to engage in friendly fraud? Knowing why a consumer feels compelled to fight a charge can give a far better understanding of how to deflect disputes. 

With that in mind, let’s look at the psychology of chargebacks. 

Understanding the Consumer Mindset

To start, buying a product or service always involves an emotional journey. That journey can have numerous qualities, depending on the quality of the customer experience (anxiety, elation, dismay, etc.). In an ideal world, you present a smooth and safe ride rather than a rollercoaster. 

For example, consider the early start of the Buyer’s Journey. The customer may feel excited as they use a new product or service. Or they could feel tense as they hope to address a challenging problem that demands an immediate solution. Some consumers will feel confident, while others might express frustration when they cannot find answers. Spontaneous desire can lead to impulse buying, while guilt may lead to Buyer’s Remorse. The possible range of emotions is vast. 

Unfortunately, a chargeback is almost always related to moments of friction. As shown from reason code analysis, consumers typically file a chargeback when there is a breakdown or issue within the purchase journey. Think of failed deliveries, double charges, fraud, system errors, etc. Such problems lead to negative emotional states. And one of the ways people express those emotions is via disputes. 

From that viewpoint, it is easy to see how good psychological chargeback defenses start with the customer experience. You want to provide positive emotional states to meet your clients at each step of their buying journey, rather than negative ones: 


Psychological Triggers for Chargebacks

Negative emotional states certainly strain the business-to-consumer relationship. But emotions themselves are often not enough to motivate. What drives an unhappy consumer to use a dispute (especially when they could refund and return items). The consumer also needs a physiological trigger—external reasons that push them towards action. Here are some common triggers that commonly lead to disputes: 

  • Perceived unfairness: A customer who feels mistreated may resort to a chargeback. For example, if a delivered product does not match the online description, the customer feels cheated. To the user, the merchant didn't hold up their end of the bargain, and that justifies filing a dispute. Or consider instances of fraud. Being deceived is an unwelcome feeling that can drive consumers towards using a chargeback. 
  • Convenience and speed: Customers can now file a chargeback with the simple push of a button. For someone who just went through a long and arduous purchase journey, the ease of a chargeback may entice them. The same goes for long and painful refund policies. Bad buying experiences act as barriers that push consumers toward disputes.
  • Confusion: A consumer who cannot make heads or tails of shipping numbers and transaction data might give up and file a chargeback. If they feel exasperated and unsure, it seems easier to file a dispute and let the merchant figure everything out. 
  • Financial stress: Consumers who feel intense financial pressure are often vigilant about overspending. Plus, they can feel sensitive to unexpected problems and billing errors. These instances can trigger chargeback requests. Some consumers may have no other option as they hope to recoup lost funds (even if this qualifies as friendly fraud).  
  • Revenge: Lastly, some consumers who feel wronged by a company may try to weaponize a chargeback. A dispute can help punish a business. It's a form of retaliation. And customers may also feel anonymous (especially with online shopping), which can lead to more aggressive chargeback behavior. 

Strategies to Mitigate Chargebacks Through Consumer Psychology

Understanding these cognitive factors offers you a great advantage. You can now leverage psychological states to create a more positive shopping experience. And that can help you limit overall chargebacks. 

Here are some psychology-based mitigation strategies you can implement: 

  1. Improve your communication: The more access you have to the customer, the easier it is to create positive moments during the sales journey. It also helps set realistic expectations that are crucial for post-purchase satisfaction. Effective communication examples include: 
    1. Clear product descriptions 
    2. Real-time notifications 
    3. Transparent pricing
    4. Delivered receipts, transaction data, and tracking numbers
  2.  Enhance customer service: Well-equipped service reps can deflect and repair issues. That can turn a possible negative moment into yet greater consumer confidence. Examples of good customer service include:
    1. Rapid resolution 
    2. Effective refund policies 
    3. Easy service access via multiple channels (email, social media, etc.)  
    4. Responsive and empathic service reps 
  3. Build trust: Trust creates a sense of security and mutual understanding. Those emotions are a crucial bedrock for fostering positive emotions. Good trust building tools include: 
    1. Secure payment gateways 
    2. High-quality data protection
    3. Showcased consumer reviews/testimonials 
  4. Educate: Customers aware of their consumer rights become confident buyers. Education reduces uncertainty and anxiety that often leads to negative emotional states. Positive education examples include: 
    1. Feedback loops 
    2. Clear chargeback and return instructions
    3. Accessible terms of agreement.  
  5. Personalize: Tailored experiences recognize consumers as unique buyers. Such efforts drive greater engagement and loyalty. Good personalization include: 
    1. Simple shopping cart processes 
    2. Different payment method acceptance
    3. Unique rewards for priority clients
    4. Marketing material that includes unique names and data 
  6. Offer post-purchase support: As any good merchant knows, repeat business is critical for sales. Plus, consumers file chargebacks after they have made a purchase. Positive post-sale experiences are crucial for deterring disputes. Good after-sale support examples include: 
    1. Warranty and repair services
    2. Customer follow-ups
    3. Requests for reviews and feedback surveys
    4. Post-sale upgrades, subscriptions, or additional promotional offers
  7. Protect: No matter how you look at it, fraud leads to negative emotional states. The more you protect your customer's data, accounts, and finances, the better. Good fraud prevention examples include: some text
    1. Fraud alerts
    2. Monitoring tools
    3. Transaction verification
    4. Anomaly detection tools

Chargeflow's Role in Reducing Chargebacks Through Consumer Behavior Insights

In today’s business landscape, chargebacks are both a significant threat and a double-edged sword. Handling this complex issue is about more than just resolving disputes but understanding them at their core and mitigating them before they even occur. Chargeflow steps in here, utilizing cutting-edge AI and machine learning technologies to analyze extensive data sets and detect early signs of customer dissatisfaction.

  1. Detecting Potential Issues: Chargeflow’s AI-powered analytics proactively detect potential issues in their early stages, empowering businesses to act quickly before they turn into full-blown disputes. This proactive strategy allows the consumer’s happy state and the loyalty of the consumer to be maintained.
  2. Proactive issue resolution: Chargeflow’s analytics are designed to identify and resolve potential problems early, preventing them from escalating into chargebacks. This capability ensures timely resolution of issues, keeping customers satisfied and eliminating the need for them to file disputes.
  3. Improved communication: Our tools collect a host of granular data that you can then provide to consumers. Well-informed customers are less likely to file a dispute, and that transparency leads to trust and satisfaction. 
  4. Enhanced trust: Chargeflow equips your transaction systems with advanced prevention tools, including real-time alerts that actively monitor and flag suspicious activities. These alerts contribute to fully securing transaction systems against fraud. With these measures in place, consumers can feel confident in the reliability and safety of their transactions. This added layer of security not only prevents fraud but also reinforces the trust customers place in your platform.
  5. Simplified experiences: Chargeflow tools are automated, helping streamline the entire dispute experience. That minimizes friction and makes it far easier for consumers to resolve issues. 


To sum it up, chargebacks are a substantial hurdle, well-entrenched in consumer habits and demands. However, by tapping into the psychological operations behind consumer behaviors, as well as identifying and preventing potential issues in advance, businesses can significantly lower the amount and influence of chargebacks. Chargeflow’s cutting-edge, AI-based tools enable merchants to do just these things, allowing them to improve customer rapport and safeguard their profits.

Want to learn more about how to apply consumer psychology to your chargeback risk management efforts, check out our website now and see how Chargeflow tools can redefine the way your business approaches forgotten merchants.


Average Dispute Amount
Average Dispute Amount
# Disputes Per Month
# Disputes Per Month
Time Spent Per Dispute
Time Spent Per Dispute
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