Tackling chargebacks in the airline industry

By Jan Swierczweski, Head of Global Chargeback Operations

The financial and operational impact of chargebacks can be significant, affecting both revenue and customer trust. Chargebacks occur when customers dispute a transaction with their bank or card issuer, and request money back after making a purchase – and are expected to rise sharply in the coming years. A recent Juniper Research report* projects that global chargeback volumes will reach 337 million cases by the end of 2025, up from 250 million cases in 2022. Much of this growth is driven by digital and card-not-present transactions. The 2025 State of Chargebacks report from Mastercard* estimates that merchants will lose $42 billion in chargebacks by 2028, with nearly half reported as fraudulent.

The airlines industry faces some of the highest chargeback rates across all sectors. This is largely due to the high value of airline tickets and the ease of online booking – which together, increase exposure to customer disputes and fraud.

Why are chargebacks prevalent in the airlines sector?

Several factors contribute to the elevated chargeback rates in the airline sector.

• Missed flights: passengers may dispute charges even after agreeing to non-refundable terms.
• Service disruptions: Delays and cancellations often prompt passengers to seek redress through their card issuer.
• High-value fraud: The cost of tickets and ease of online bookings make airlines a prime target for fraudsters.
• Currency disputes: Discrepancies due to exchange rate fluctuations or unclear foreign transaction fees may prompt chargebacks.
• Ancillary fees: Customers may contest ancillary charges for baggage, seat selection or other extras if airlines do not clearly disclose these up front.
• Delayed refunds: When airlines are slow to process legitimate refunds, passengers may file chargebacks to speed up the process.

Managing and mitigating chargebacks

Airlines face additional challenges when handling chargebacks, due to the unique structure of travel bookings; these can include multiple stakeholders, varying regulatory requirements, and long lead times between booking and fulfillment. Further, the complex procedures involved in filing, processing and resolving chargebacks come with significant administrative costs – spending both time and money to monitor open claims, gather evidence, evaluation new claims and communicate with card issuers.

To mitigate these challenges, we offer two service models to address airline clients’ needs:

• Standard service gives airline clients access to a secure online platform, where they can view and respond to chargebacks. Airlines remain in control of the process, and Elavon acts as their liaison with card brands. Standard service also includes advisement, in which we evaluate an airline’s end-to-end processes and recommend improvements – for example, ensuring clear booking policies and transparent terms for customers. We can also help airlines determine if their approach to fraud management is effective, or if there are gaps that we can help address.
• Fully managed service allows our airline clients to maximize their chargeback win rates and reduce operational burdens. Elavon handles every aspect of the chargeback process on behalf of airline clients, from evidence gathering to final resolution. With one of the most experienced chargeback teams in the industry, we combine technical expertise in dispute management with strong customer service. We help airlines reduce chargeback volumes and improve win rates with our comprehensive approach; we even help clients maintain healthier cash flows by delaying debits until the end of dispute resolution. Our process also ensures that passengers have a clear and transparent path for raising concerns while aligning with card brand rules and airline policies.

We understand the inherent challenges of managing airline chargebacks and are ready to help our clients navigate dispute processes with the most comprehensive and effective chargeback management solution in our industry.

Innovation in chargeback prevention

Global chargeback rates continue to increase, driven by several factors: greater awareness of cardholder rights, higher adoption rates of mobile banking apps, new fraud tactics and exponential growth of card-not-present transactions. These trends have led to increases in both third-party fraud (unauthorized purchases) and first-party fraud (customers falsely disputing valid purchases).

To stay ahead of these trends, we are investing in two key innovations:

• FlightGuard is a real-time ticket suspension tool that prevents unauthorized travel when an airline client is likely to lose a chargeback dispute. This protects both revenue and operational integrity.
• Pay Defense is an advanced fraud detection system that uses machine learning and link analysis to identify behavioral patterns associated with fraudulent activity.

These tools represent the future of chargeback prevention – proactive, intelligent, and seamlessly integrated into airline payment systems.

Understanding the root causes of airline chargebacks is critical for protecting revenue and enhancing customer satisfaction. By improving transparency, accelerating refund processes, and leveraging advanced fraud detection tools, airlines can significantly reduce chargeback risk. Airlines that work with us gain more than a service partner – our fully managed service offers airlines a strategic partner for boosting cost savings, protecting the bottom line, and enhancing brand trust.

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