Retailers are paying the price for forgotten or unwanted subscriptions in costly chargebacks, according to new research from Chargebacks911, a global leader in dispute resolution and chargeback prevention. When facing post-transaction issues, 50% of cardholders bypass merchants and go straight to their bank – often at a cost to the retailer. Research by Equifax has found that 71% of UK consumers have never had a refund or chargeback denied.
While subscriptions offer reliable income to retailers, they also present a challenge. Chargebacks911’s 2025 Cardholder Dispute Index reveals that consumers are spending an average of $2,600 (£2,150) annually on subscriptions – but of those, nearly half admit they’re still paying for services they no longer use or even remember signing up for.
This dovetails with analysis by Citizens Advice which found that 13 million people in the UK had “accidentally” taken out a subscription over the last 12 months. The most common reason for this was a subscription auto-renewing without the consumer’s knowledge (40%), followed by signing up for a free trial and forgetting to cancel (39%). Worryingly, almost a quarter (24%) of those who ended up with an “accidental” subscription thought they were making a one-off purchase. It’s not surprising, therefore, that Chargebacks911’s research found that 85% of consumers said they would prefer their bank to cancel subscriptions on their behalf.
Incoming regulation
This growing frustration is catching the attention of regulators. With “subscription traps” costing consumers an estimated £688 million annually in the UK, the Digital Markets, Competition and Consumers Act 2024 has officially introduced measures to tackle the issue but full enforcement is still pending. Key rules – such as mandatory renewal reminders, clearer pre-contract terms, and cooling-off periods for auto-renewals – are expected to come into force by spring 2026. In the meantime, businesses are being urged to prepare for compliance and adopt transparent, customer-friendly subscription practices.
In the US, the Federal Trade Commission (FTC) has proposed a Click-to-Cancel rule aimed at making cancellation as simple as sign-up. Although currently paused due to procedural hurdles, experts expect it to move forward. The FTC has also taken enforcement action against companies with problematic cancellation practices.
While this might seem like added regulatory pressure, it ultimately benefits merchants, as Ben Bridwell, president at Chargebacks911, points out. “Let’s be honest. If cancelling a subscription isn’t just as easy to end as it was to sign up, people won’t even try. They’ll just hit ‘dispute’ in their banking app,” he said. “That choice might be convenient for the customer, but it hits merchants with unnecessary chargebacks and fees that are far more painful than cancelling a subscription or issuing a refund.”
“Friendly fraud”
The incoming measures could also help protect merchants from “friendly fraud”. Chargebacks – where a cardholder disputes a transaction and initiates a refund through their bank – are designed as a consumer protection mechanism. But they’re increasingly vulnerable to abuse, including so-called ‘friendly fraud’, where customers dispute charges for items they’ve received and are satisfied with. Recent research from the Digital Solutions team at Equifax, which specialises in fraud detection and chargeback management via its Kount-branded platform, estimates that the total value of refunds and charge disputes in the UK could reach £13.2 billion annually.
Equifax’s research found that the average UK consumer goes through five refund or dispute processes per year, with a face value of £250 in refunded or disputed items and services. 34% of consumers don’t think that keeping an item and requesting a refund, despite finding the item satisfactory, counts as fraud. These figures suggest that UK retailers may be overexposed to refund abuse.
For UK online retailers and subscription-based businesses, the message is clear: transparency and ease of cancellation are essential. “Merchants should clearly outline subscription terms and make billing schedules and renewal dates easy to understand,” Bridwell said. “That clarity builds trust and long-term loyalty, rather than short-term revenue that risks being undone by disputes.”
Making cancellations easy doesn’t just improve the customer experience – it also protects the business. When customers are able to cancel directly with the merchant, they’re less likely to bypass that process and go straight to their bank. By reducing these escalations, merchants can protect their bottom line and maintain strong relationships with both payment partners and customers.
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