Airline Chargeback DataDelayed Refunds and Impatient Passengers Are Causing Airlines to Leak Revenue

Airlines Aren’t Paying Enough Attention to Double Refunds

According to US Department of Transportation rules, airlines that cancel or significantly alter flight itineraries, no matter the reason, are obligated to provide passengers with automatic refunds. “Automatic,” however, isn’t the same thing as “immediate.”

Refunds are rarely instantaneous thanks to complex regulations, funds tied up between airlines and third-party OTAs, legacy payment rails, and other roadblocks. In many cases, travelers who pay for flights with credit cards can expect to wait up to 7 days for a refund. Passengers paying with cash or checks can anticipate even longer delays.

Passengers, however, are rarely so patient. Already frustrated by disrupted travel plans and long customer contact center hold times, travelers may give up on their refund requests and file chargebacks with their issuing banks in the hopes of getting their money back sooner. When this happens, operators may end up being exposed to so-called “double refunds.”

According to recent survey data from Chargebacks911®, double refunds are one of the leading concerns among merchants regarding first-party fraud. 37% of surveyed merchants identified it as a concerning trend in 2026.

Concerning Friendly Fraud TrendsThe growing chargeback trends that merchants are most worried about

Duplicate reversals occur because operators are often already working behind the scenes to issue refunds as soon as customers request their money back. When disgruntled passengers simultaneously file chargebacks, the airline merchant ultimately loses the transaction value twice: once as a refund and again as a dispute.

It’s a thorny issue that’s difficult to combat: our survey data reveals that 36.8% of merchants identify “chargebacks filed during pending refunds” as one of the most concerning chargeback trends reported by respondents.

A single chargeback typically cost far more to resolve than the headline revenue lost. According to data from LexisNexis Risk Solutions, US and Canadian merchants incur up to $4.61 for every dollar lost to fraud. When you add to that the cost of the double refund — and account for the high ticket values associated with air carriers — even a few incidents can cause serious compression of already thin operating margins.

What is a Double Refund?

A double refund occurs when a cardholder requests a chargeback in response to a transaction. Meanwhile, the merchant has already issued a refund for the transaction in question. As a result, the merchant loses revenue from the same transaction twice. Below is an example of a common scenario that can lead to a double refund incident:

Operators typically note that refunds for credit card purchases take time — often 7 business days or more — to settle. During high-volume disruption events, such as severe nationwide weather or systemwide outages, refunds can take even longer to go through.

Chargebacks, on the other hand, appear expedited… at least from the passenger’s perspective. A frustrated cardholder can file a dispute within their issuer’s mobile app or online banking portal in just a few taps or clicks. Once a chargeback is initiated, an issuer may immediately grant a provisional credit to the cardholder, making it seem as though the problem is resolved more or less instantly.

Why Do Double Refunds Happen?

What’s behind this trend? And, why are airlines at such high risk? There are several factors at play here:

There is one silver lining here. When a traveler prepays through an OTA that serves as the merchant of record, the OTA bears responsibility for potential chargebacks rather than the airline. But, this is no free lunch; OTAs, like all middlemen, charge fees that can eat into profit margins and reduce control over customer relationships.

Why Airlines Rarely Win Double Refund Disputes

Merchants' Biggest Chargeback Representment Challenges

Double refunds require the airline to do two things simultaneously. First, the airline must respond within their acquirer’s stringent timelines. This usually means that operators have 10 days or less in which to respond after receiving a chargeback notification. Second, the airline must prove to the issuer that a refund was already initiated before the chargeback was filed. Given long refund processing timelines, this is no easy task.

Even if the airline did, in fact, provide a timely refund, translating that into compelling evidence remains a conundrum. According to our data, 29% of representatives of air carriers say that evidence collection is their biggest representment challenge. 20.6% of respondents identified visibility across systems as a problem, noting that it’s hard to match refunded transactions to those that have been subject to a chargeback.

Even with evidence, representment remains an uphill battle. Our data reveals that 23.5% of merchants juggle five or more separate chargeback management tools. For airlines that may handle tens of thousands of bookings per month, this fragmented setup is prone to failure. By the time a chargeback analyst is able to extract the refund confirmation associated with the transaction under dispute, the acquirer’s response window may have already closed.

Staffing issues are also problematic for operators. Surveyed merchants who say they manage chargebacks in-house employ, on average, two full-time employees, evening out to a per-person workload of 126 representments per month. However, since cancellations and refund requests tend to cluster around certain weather events or times of year, this average workload is largely a misnomer. In practice, in-house chargeback staff at airlines may lack the bandwidth to fight double refund chargebacks, since they all tend to occur at once.

Finally, while carriers have expertise in flight safety, fleet logistics, maintenance, and FAA regulations, they are understandably far less well-versed when it comes to card network rules. Only 23% of surveyed merchants say they are “very” up-to-date on the latest card network regulations. Conversely, 45% admit they have little or no knowledge of current rules. Given that complex card network regulations change frequently, strategies and best practices that worked in the past can rapidly become outdated. Without expert guidance and a deep understanding of existing rules and their changes, operators are effectively up against moving targets.

What Operators Can Do About It

To mitigate double refund losses, operators will need to practice a proactive approach to chargeback management. Decision makers should focus on three practical areas of intervention to achieve the greatest “bang for buck”:

#1  |  Communicate Proactively While Refunds Are In Process

Data from the 2026 Chargeback Field Report shows that about 53% of subscription merchants send pre-charge billing reminders, which are shown to reduce dispute incidence for recurring revenue models. While passengers do not pay on a recurring basis, we can apply a similar logic to refund requests.

Here, the idea is that radio silence between the time at which a passenger initiates a refund and when they actually receive their funds leads to customer anxiety and frustration. Structured, timestamped alerts that show a refund is in the works — a series of notifications showing a refund request has been received, when it has been approved, and when funds are about to be released — can help assuage customer fears and eliminate the knee-jerk reaction to file a chargeback.

#2  |  Leave a Paper Trail of Evidence

Operators need compelling evidence to fight double refunds when they occur. Unfortunately, booking confirmations alone will not be sufficient to overturn a cardholder’s chargeback claims.

Given that airlines handle a high number of transactions, carriers may wish to invest in chargeback automation solutions that source and compile relevant documentation whenever a transaction is disputed. For example, an automated documentation retrieval system should be able to fetch all records containing the traveler’s name and payment method, including any showing a refund underway.

An airline that can demonstrate to the issuer that a refund was pushed to the cardholder’s account before a dispute was filed may stand the best odds of overturning an invalid chargeback.

#3  |  Invest in Refund-Based Dispute Deflection Solutions

Operators cannot rely on manual efforts to catch double refunds because the process is too cumbersome and slow to effectively intercept chargebacks. Instead, they should consider third-party chargeback deflection tools that integrate real-time alert technologies, such as Ethoca Alerts and Verifi CDRN. These technologies provide notifications warning of a pending chargeback, which gives the recipient a 72-hour window to act before a dispute becomes a formal chargeback.

When an alert is triggered, automated workflows can instantly scan an airline’s internal systems to determine if a refund is pending. If a refund is already in process, the system can intercept the dispute, furnish proof of the refund, and resolve the inquiry without incurring a chargeback fee or allowing a fraudulent double refund to occur.

This whitepaper examines the impact of double refunds on airlines using data compiled for the 2026 Chargeback Field Report. Eager to get a bigger-picture grasp on the state of chargeback management in 2026? Download the report today.