Q1 Holiday Profits Fade As Chargeback ‘Hangover’ Hits Merchants, Warns Chargebacks911

• Chargebacks911 warns retailers face a surge of disputes as consumers reconcile sheer volume of holiday purchases

• Actual Adobe Analytics data shows strong online sales during key holiday events with early 2026 dispute risk

• Founder & CEO, Monica Eaton, outlines steps merchants must take now to protect post-holiday revenue

TAMPA, Fla. — Global eCommerce sales passed $1 trillion for the first time ever over the holiday shopping season, reaching a record $1.29 trillion between November 1 and December 31, according to a Salesforce report released Thursday. Chargebacks911, a global leader in dispute resolution and chargeback prevention, says that while the 2025 holiday season delivered record online sales for retailers, the aftermath of transaction disputes known as the “holiday hangover” is already threatening margins in the first quarter of 2026.

While retailers initially braced for an underwhelming sales season in the wake of higher prices and economic uncertainty, the record-setting 2025 holiday shopping season was earmarked with spikes, particularly in eCommerce sales. According to actual Adobe Analytics data, U.S. shoppers spent a record $14.25 billion on Cyber Monday 2025, making it the largest online shopping day on record. Online sales during the “Cyber 5” period (Thanksgiving through Cyber Monday) reached $44.2 billion, up 7.7 percent year over year. Online traffic grew 13% globally, a significant increase compared to last year’s 1% growth rate. While online shopping is gaining in popularity among consumers, eCommerce and card-not-present transactions pose a higher threat of chargebacks than in-store purchases.

Beyond strong sales figures, actual behavioral trends from the holiday period signal increasing post-season risk. Salesforce also reported that more than $181 billion of global online purchases made between November 1 and December 31 have already been returned. This accounts for 14% of all purchases and marks a 10% increase in returns from last year. Experts at Chargebacks911 say returns will remain elevated into mid-January, a pattern that often fuels disputes when customers encounter delays or confusion in processing returns.

This convergence of high card-not-present transaction volumes, elevated returns and increased consumer scrutiny in January means that many merchants face a predictable chargeback hangover as shoppers review statements, reconcile budgets and challenge charges through their banks rather than contact sellers directly.

“Retailers celebrated record online spending in November and December, but the real financial reckoning often does not show up until January,” said Monica Eaton, Founder & CEO, Chargebacks911. “The chargeback hangover is real. It means a surge in disputes that can reduce profits if merchants do not put dispute prevention in place now.”

Post-Holiday Disputes Are on the Rise

According to Chargebacks911 and industry trends:

• Consumers increasingly request disputes through their mobile banking apps rather than contacting the merchant first.

• Returns that peak in late December and early January often lead customers to file disputes when they feel the refund process is too slow or unclear.

• Holiday shopping psychology, including impulse buying and emotional spending, drives customers to reassess purchases once the holiday excitement fades, leading to disputes instead of returns.

These behaviors are often categorized as friendly fraud, where consumers dispute legitimate charges due to confusion or convenience. Friendly fraud continues to grow as a share of overall dispute activity, with post-holiday timing slowing into January and February as consumers revisit their statement activity.

Steps Merchants Should Take Now

To guard against the chargeback hangover and protect hard-earned holiday revenue, Eaton recommends that retailers:

• Clarify billing descriptors so charges are easily traceable back to the merchant.

• Communicate order status proactively with shipment notifications before customers check their bank app.

• Clarify refund timelines so customers understand when to expect returns rather than disputing charges.

• Deploy automated dispute alerts and workflows to intercept dispute activity early and preserve revenue.

“Most disputes do not have to become losses,” Eaton said. “Preparation from how you describe charges to how you engage customers after the sale can make a real difference in holding on to holiday profits.”

Retailers who act now can reduce both the direct costs of disputes and the operational burden of managing rising post-transaction disputes.

About Chargebacks911

Chargebacks911® is the global leader in chargeback prevention and remediation technology. As a platform provider to merchants and financial institutions, Chargebacks911 is the first global company fully dedicated to providing an end-to-end platform specifically designed to counter post-transactional fraud and chargeback misuse. Today, Chargebacks911 safeguards more than 2.4 billion transactions per year on behalf of clients in 87 countries around the world, supporting over 2.5 million merchants. For details on Chargebacks911’s comprehensive dispute management solutions, visit https://chargebacks911.com.