For operators already grappling with weather disruptions, shifting regulations, and volatile demand, this stat is a massive red flag.

Refund fraud isn’t a fringe problem anymore, it’s mainstream. And it’s quietly bleeding millions from travel, ticketing, and hospitality businesses.

To understand how it happens, and how to stop it, let’s walk through the full refund journey, from booking to chargeback.

The Booking: Where the Fraud Starts Quietly

At this stage, everything looks normal. A customer books a hotel room, airline seat, or event ticket. Payment clears. Revenue hits the account.

But here’s the risk:

• -   Stolen credit cards are used to make bookings that will later be disputed.
• -   Fraudsters test checkout flows for weak authentication and low friction.
• -   Some plant the seed for "friendly fraud",  keeping all documentation so they can later claim they never received service.

The Cancellation: A Key Inflection Point

Plans change, often legitimately. In travel and entertainment, cancellations are part of the business model. But this is where fraud often accelerates.

Common scams include:

• -   Misrepresenting cancellation windows (“I was within the deadline” when they weren’t).
• -   Bot-flooding cancellation portals to game rules or overwhelm support teams.
• -   Manipulating reasons (e.g., claiming illness or weather disruption) to qualify for a refund.

-   In a high-volume scenario, like a major weather event, it’s almost impossible to manually filter the legitimate from the fake.

The Refund Request: Where Volume Meets Vulnerability

Fraud risks spike here:

• -   AI-generated fake receipts, screenshots, or emails.
• -   Duplicate claims across multiple emails or platforms.
• -   Refund chaining: One fraudster requests a refund from the platform and initiates a chargeback with the bank.

The Chargeback: When the Bank Gets Involved

4. If a fraudster doesn’t get the refund they want, they escalate the case directly to the issuing bank — triggering a chargeback.

Now, you’re guilty until proven innocent.

The risks:

• -   Merchants must provide proof the service was delivered or the refund correctly denied.
• -   Without an automated system, ops teams often lose disputes by default.
• -   High chargeback ratios can increase processing costs or even get you blacklisted by payment providers.

-   Chargeback fees typically range from £15–£25 per dispute, not including the operational and reputational damage.

The Aftermath: It’s More Than Just Lost Revenue

Refund fraud drains more than your bank balance. It hits:

Once trust is broken, either with customers or banks, recovery is slow and costly.

How Refund Protection Closes the Gaps

Here’s how solutions like Simple Refunds change the game:

1. -   Fraud Pattern Recognition

• -   Detect bots, duplicate requests, and high-risk refund behavior before money leaves the account.
• -   Flag suspicious velocity (e.g., same IP requesting 20 refunds in 10 minutes).

2. -   Evidence Dashboards

• -   Automatically generate timestamped logs, communication trails, and delivery proofs.
• -   Arm your ops team to win chargeback disputes with clear, bank-ready documentation.

3. -   Localized Refund Compliance

• -   Apply country-specific refund laws and rules to avoid regulatory fines.
• -   Instantly adapt to changing legislation without manual intervention.

4. -   Speed Without Risk

• -   Legitimate customers get instant refunds: improving trust and retention.
• -   Fraudulent claims are flagged or denied before any payout occurs.

Conclusion: Refunds Should Build Trust — Not Risk

From booking to chargeback, the refund process is riddled with weak spots: and today’s fraudsters are expert at exploiting them.

In 2025, refund management isn’t just about speed or customer satisfaction. It’s about proof. You need to show banks, customers, and regulators that:

• -   You processed requests fairly.
• -   You blocked fraud without blocking loyalty.
• -   You maintained trust in a high-risk environment.

-   That’s the new refund advantage.