Are We Seeing the Americanization of British Attitudes Toward Chargebacks?

Annual survey data from the 2023 Justt Customer Attitudes Towards Chargebacks report depict a drastic change in British consumer willingness to employ chargebacks. Whereas U.K. consumers previously demonstrated a preference for refunds and lower chargeback usage, 2023 results now show response data at levels that mirror American attitudes. Is this the result of Americanization? What caused this shift in U.K. consumer behavior?

Notable changes in British chargeback usage

Several data points in the 2023 report reveal the significant about-face in British consumer attitudes toward chargebacks.

• Overall chargeback usage: The number of respondents reporting filing at least one chargeback in the past 12 months rose significantly in both the United States and the United Kingdom. In the U.S. it rose 12 percentage points to 78 percent, while in the U.K. it jumped 22 percentage points to 77 percent of those surveyed.
• Serial chargeback users: British serial chargeback activity (6+ chargebacks in 12 months) also spiked drastically. Whereas 2022 depicted serial chargeback users in the U.K. as nearly nonexistent (3 percent of respondents), that share jumped to 28 percent this year. Such an aggressive trend reversal is surprising, especially considering that serial chargeback use in America decreased from 18 percent to 12 percent.  
• Gaming and travel chargebacks:  The share of Brits who reported gaming and travel chargebacks more than doubled. Forty-nine percent of respondents filed a gaming-related dispute in 2023, far more than the 21 percent noted in 2022. And 36 percent of Brits reported a travel chargeback in 2023, up from 16 percent depicted last year. That doubling in chargeback activity is in stark contrast to Americans. U.S. gaming and travel chargebacks actually decreased in 2023 (to 36 percent and 20 percent, respectively), dispute levels lower than that of British consumers.
• Weaponized chargebacks: Politically motivated chargeback use by Brits increased year-over-year. The Justt survey asked if users filed a chargeback due to a disagreement with company values or policies, even if they had no problems with the product itself. The number of U.K. consumers who said “yes” increased by 10 points (holding an 18 percent share). That is a noteworthy increase, especially considering American responses to the same question dropped 10 points to 15 percent.  

Possible reasons for the change in British consumer attitudes

Numerous factors could influence such a significant change in British attitudes toward chargebacks. 

• Globalization: eCommerce offers worldwide market access— and the dynamic exchange of information across different cultural contexts can lead to changes in consumer behavior. Did the aggressive example by Americans toward chargebacks in 2022 affect British consumer behavior? This effect is difficult to quantify, but it is hard to believe that the influence of American chargeback behavior would shift British chargeback behavior so markedly within just one year.
• Economic problems: The U.K. payment system did endure supply chain problems, high inflation, and an economic downturn. But these reasons do not seem to have contributed heavily to increased chargeback behavior by British consumers according to the survey data. When asked why they filed a chargeback, 27 percent of U.K. consumers cited “goods not received.” That’s a 17 percent decrease from last year’s U.K. results, and well within the margin of error compared to U.S. results (24 percent). Similarly, the percentage of British consumers who said that high inflation would lead them to file more chargebacks was roughly the same as it was for Americans (11 percent vs. 10 percent).
• Consumer awareness: Consumers are more aware of their consumer protections, and that extends to chargebacks. And British customer service expectations underwent a seismic shift in recent years—customers now demand a seamless payment experience. Any perceived failure related to the customer experience can cause consumers to seek recourse with chargebacks. Are unhappy consumers more likely to use chargebacks as a tool for personal gain?

Changes in consumer satisfaction and the demand for high-quality sales experiences certainly play a role in consumer attitudes toward chargebacks. And Brits do show greater dissatisfaction year over year. When unhappy with a payment, the number of British consumers who first asked for a refund before filing a chargeback dropped from 70 percent in 2022 to 52 percent in 2023. And when asked if a good return policy would make a difference, only 47 percent of Brits said “yes” compared to 60 percent last year. Frustrations appear to have contributed to more chargebacks.

Still, Americans exhibit the same focus on consumer-centric sales journeys. And American customer satisfaction levels have waned in previous years as well. Customer happiness will affect chargeback volume, but it is not an exclusive problem reserved for Brits. It cannot explain the drastic change in British attitudes.

• Demographics: In the absence of clear economic causes, we must examine relevant demographic variables  (e.g. age, gender, and socio-economic status). Such elements can affect consumer chargeback activity (e.g. younger generations are more likely to use novel payment types that have greater chargeback risk). Are differences in survey demographics the reason for the abrupt change in British response data?

Some demographic differences are visible in the Customer Attitudes Towards Chargebacks 2023 report. Last year, those between the ages of 25-34 made up 37 percent of total British respondents. That dropped to a 24 percent share in 2023. In turn, those in the 45-54 age brackets increased by 9 points for a 20 percent share, and those aged >54 increased by 6 points to 16 percent. Is shifting British behavior due to a greater share of older respondents? While a possible factor, American age data confuses such an explanation. The share of American respondents aged 25-34 also decreased 7 points to 22 percent. And yet, the share of American respondents aged >54 almost doubled from 15 percent to 29 percent. The various compositions of each age range do not offer a clear correlation.

Of interest, last year's data showed a slant toward female responses in the United Kingdom (earning a 59 percent share). This year there was a more equitable split, with only 51 percent of British respondents identifying as female, the exact same distribution visible in the 2023 U.S. data. Does greater representation by males explain the change in consumer behavior? Are men more open to chargebacks than women? Reports do show that females are less fraudulent than their male counterparts. Still, such a moderate change in gender distribution is unlikely to explain the complete year-over-year change in British attitudes. However, it might account for part of it. Such an intriguing point deserves further research.

• Location and geopolitics: Structural differences between American and British consumer protection systems may have played a part. The United Kingdom operates under its own regulatory framework and can create different resolution rules. And how much did post-Brexit gridlock and labor strikes affect British consumers?

Geopolitics certainly shapes consumer activity. But once again, it is one factor that does not fully explain the entire shift in British chargeback use. Both Americans and Brits reported similar values toward their consumer protections with 43 percent of U.K. consumers and 42 percent of U.K. stating they “enjoy the consumer protection provided by chargebacks and prefer to use a credit card in high-risk payment situations.” Systemic differences affect consumer attitudes but does not fully explain such egregious changes seen in British chargeback use.

Chargebacks and evolving British demands

The reshaping of British consumer attitudes clearly involves multiple factors. It would be far too hasty to attribute any change in British attitudes solely to Americanization. While a possible factor, such an answer oversimplifies the complex nature of consumer behavior. 

With a more holistic viewpoint, it is more likely that the change in British attitudes is due to a mix of alterations that resulted in a growing trend of consumer empowerment. Reporting changes in gender and age, national economic issues and increased consumer dissatisfaction could have each contributed  to the overall change in the propensity of British consumers to utilize chargebacks.  

Such a hypothesis posits that the change in data is not due to the Americanization of British consumerism. Instead, it declares that Brits experienced far more payment process friction in comparison to Americans. That provided the impetus for Brits to exercise similar consumer empowerment, which they expressed via chargebacks. U.K. consumers did not adopt more American values, they simply wanted the same payment experiences seen by their American counterpoints. And when necessary, they used chargebacks to earn that consumer experience. 

Further research is needed to confirm such factors. But it may serve as a possible explanation for the change in British attitudes toward chargebacks.

Next steps for merchants

Deciphering the different factors that may explain the shift in British behavior offers merchants and industry players (in both the U.S. and the U.K.) some action takeaways: 

First, invest in education. Efforts on consumer education can help teach consumers healthy forms of consumer empowerment, such as using refunds instead of chargebacks.

Second, focus on customer happiness. A seamless customer experience directly mitigates aggressive chargeback use.

And third, make an effort to fix supply chain problems. Merchants can avoid numerous chargebacks in the future by resolving delivery, checkout, and product quality problems.