Imagine a loyal customer, excitedly buying from your D2C brand, who ends up needing a refund. She sends the item back and then… nothing. Days pass with no refund. Or consider a first-time buyer squinting at a confusing invoice, unsure why the total is higher than expected. In another scenario, a customer spots an unfamiliar charge on their card and, feeling ignored, calls the bank to dispute it. These are not edge cases – they’re everyday cracks in our finance operations that quietly erode customer trust. As founders, we obsess over growth, product, and marketing, but it’s often these invisible friction points – late refunds, opaque billing, and chargebacks – that can silently kill loyalty.
Let’s dive into each of these pain points with fresh data and real examples, and see how some savvy D2C brands are turning things around.
Late Refunds: The Slow Bleed of Trust
Late refunds are a silent killer of customer goodwill. In the age of Amazon-level convenience, consumers have grown impatient with refund delays. If you’re still taking a week or more to process refunds, you’re testing the limits of your customers’ trust. Consider this: a 2025 survey of U.S. shoppers found 37% would literally rather visit the dentist than wait 7 days for a refund. It sounds extreme, but it underscores how refund friction has become that painful.
The expectation bar is rising fast. Nearly two-thirds of consumers (63%) now want refunds processed the same day – a figure up 12% from the previous year. Patience for “7-10 business days” has worn thin. In the survey, almost half of consumers said they actively avoid retailers with slow refund policies. On the flip side, 74% said they’d be more than happy to buy again from a brand if it offered instant refunds. In other words, speed pays: faster refunds can directly translate into higher customer lifetime value, while slow refunds drive shoppers away.
Why such a visceral response to refund speed? It’s about cash flow and peace of mind for the customer. Once a return is sent back, the customer’s money is in limbo. Every additional day feels like the brand is holding their cash hostage. As Jeremy Balkin, CEO of fintech TodayPay, puts it, “U.S. consumers expect their refunds to be as seamless as when they make a payment… In an age where real-time payments and same-day deliveries are expected, consumers want to choose how their payment comes and at what speed.” The data backs him up: demand for same-day refunds jumped sharply year-over-year, and ambiguous refund policies have become a top frustration point for shoppers.
Leading brands are catching on. Amazon and other big-box players have conditioned buyers to expect near-instant gratification – some Amazon returns are refunded as soon as the return package is dropped off, long before it reaches the warehouse. This “instant refund” model is quickly moving from novelty to norm. In late 2024, Worldpay rolled out a near-instant card refund service, noting their research showed 40% of customers expect a refund within 24 hours of returning an item, and new startups are emerging to help smaller merchants offer speedy refunds. (TodayPay even launched a “Refunds as a Service” platform to let merchants disburse refunds in real time across multiple payment methods.)
The payoff for investing in refund speed isn’t just theoretical – it shows up in real customer behavior. The National Retail Federation reports that 84% of consumers are more likely to shop with a retailer that offers immediate refunds (and box-free returns). D2C shoe brand Rothy’s, for example, saw a huge drop in “Where’s my refund?” support tickets after it introduced instant refunds via Happy Returns’ in-person drop-off network. Customers returning shoes at a Happy Returns bar get their refund on the spot, and Rothy’s VP of Operations noted that calls about refund status shrank to almost zero. Before, refunds took 2+ weeks; now they’re handled in under a minute at drop-off. The result? Happier customers, fewer support headaches, and even an uptick in exchanges (since customers trust they can swap sizes or products without refund anxiety).
The takeaway for founders: A slow refund isn’t just a minor annoyance – it’s a trust killer that can cost you repeat sales. If you haven’t revisited your refunds workflow recently, do it now. Even if instant refunds for every case aren’t feasible, look for wins: issue refunds upon carrier scan of a return, auto-refund low-value items without requiring returns, or offer refund-to-gift-card options that are instant. Every day you shave off refund time is goodwill you bank with your customer. And as the data shows, it might make the difference between that customer walking away for good or becoming a loyal fan.
Unclear Invoicing: Confusion Erodes Confidence
Ever opened a bill or an online receipt and found yourself asking, “Wait, what am I being charged for exactly?” That flicker of confusion is poison to trust. In our rush to optimize checkouts and payment flows, it’s easy to overlook the clarity of what we’re charging people and how we communicate it. Unclear invoicing – whether it’s hidden fees, cryptic line items, or confusing billing descriptors on credit card statements – creates a gap between expectation and reality. And in that gap, doubt festers.
Recent data shows that pricing transparency is absolutely non-negotiable for consumers in 2025. In a national April 2025 survey, 82% of Americans said clear pricing with no hidden fees is essential to reducing stress and improving their shopping experience. This isn’t just a polite preference; it’s a make-or-break for the majority of shoppers. More than one in three consumers in that survey admitted feeling frustrated when encountering unexpected fees, and 20% said they immediately abandon their cart at checkout if surprise fees pop up. Think about that – you could be losing one-fifth of potential sales at the finish line because a “handling fee” or ambiguous surcharge appears in the invoice at the last second.
When a customer feels nickel-and-dimed, or simply confused by an invoice, it doesn’t just hurt that transaction – it chips away at your brand’s credibility. The issue has become so widespread that regulators are stepping in (the FTC is pushing rules on junk fee disclosures), and big platforms like Airbnb are moving toward upfront all-in pricing. Brands that “obscure costs or spring them on customers at checkout are eroding trust,” as VTEX co-CEO Mariano Gomide de Faria bluntly puts it. His warning comes from seeing retailers try to slip in tariff surcharges or inflated shipping at checkout: short-term revenue tricks that backfire with customer loyalty. “In this environment, … transparency is non-negotiable. Retailers need to build experiences that feel like clarity and control is in the customer’s hands,” Gomide adds
The best D2C brands have learned that radical transparency can be a competitive advantage. Everlane is a prime example: from day one, they marketed “transparent pricing,” even revealing the cost breakdown of materials, labor, transport, and their mark-up for each product. It was an unusual move in fashion retail, but it gave customers total clarity on what they were paying for. The result? Everlane cultivated a reputation as an honest brand and grew from a tiny startup to a $ 250 M+ revenue leader in under a decade. By living its values (they published infographics of their factory costs), Everlane built trust equity that far outweighs any margin they might have gained by playing pricing games. Transparency fosters trust, and trust fuels growth.
Another angle of invoicing clarity is the after-purchase billing descriptor – the business name that shows up on the customer’s credit card statement or bank app. Many founders don’t give this a second thought, but it can be a source of serious confusion (and chargebacks, which we’ll get to next). In a 2024 cardholder survey, the #1 cause of chargeback disputes was not sophisticated fraud, but “confusing or unrecognizable billing descriptors.”Customers saw a charge on their statement, didn’t recognize the vendor name (maybe your LLC’s legal name or a payment processor’s name instead of your brand), and assumed it was unauthorized, leading them to file a dispute. Alarmingly, one-third of merchants don’t even know how their billing name appears to customers. That’s an unforced error we have to fix. Something as simple as ensuring your charge descriptor clearly says “YourBrand – Product” (instead of “XYZ Corp 123”) can preempt a ton of confusion-driven chargebacks.
The takeaway: Clarity in pricing and billing isn’t a “nice to have” – it’s directly tied to whether customers trust you with their money. Scrutinize your invoices, checkout flows, and statements from the customer’s perspective. Are there any line items a first-time buyer might misunderstand? Are you fully upfront about shipping, taxes, or fees before the final click? Are your confirmation emails and receipts itemized and written in plain language? By eliminating surprises, you not only reduce support tickets (“What is this charge?”) but also signal to customers that you respect them. In return, they’ll reward you with loyalty and word-of-mouth, because nothing builds trust like no surprises.
Chargebacks: The Cost of Broken Trust (and Communication)
Chargebacks are often treated as a pure fraud or payments issue – the domain of CFOs and risk analysts. But in reality, chargebacks are very much a customer experience issue. A chargeback is essentially the customer’s loudest way of saying: “I had a problem, and I don’t trust you to fix it, so I went to the bank.” It’s the final stop on the train of a bad experience. If we trace back where that train got derailed, more often than not, it’s tied to the same culprits: slow refunds, unclear charges, or unresponsive service. In other words, chargebacks frequently stem from preventable friction in your finance ops.
New research confirms what many founders have suspected: the majority of chargebacks aren’t from outright stolen-card fraud, but from frustrated customers taking a “shortcut” to get a resolution. Monica Eaton, CEO of Chargebacks911, notes that major card networks estimate up to 70% of all credit card “fraud” claims are misuse – so-called friendly fraud. These are customers who did make the purchase, but later disputed the charge. Sometimes it’s unethical behavior (buyer’s remorse, wanting something for free), but a huge chunk is due to breakdowns in communication or policy. 53% of cardholders in one survey said they filed a dispute without ever contacting the retailer first. Why? Often, because they believed it would be easier or faster to let the bank handle it. One report found 84% of customers feel filing a chargeback is easier than requesting a refund directly, and 52% don’t bother reaching out to the seller at all before initiating a chargeback. This is a glaring signal that our support channels and policies aren’t keeping up with customer expectations.
The speed of resolution is a driving factor here. Nearly half of consumers say the primary reason they go to their bank (instead of the merchant) is that the bank offers a quicker resolution timeline. Think about that: your customer might trust their bank to handle an issue more than they trust you, simply because the process seems more straightforward. That’s a painful reality – essentially being cut out of the conflict resolution loop. And once a chargeback is filed, you’ve not only lost the product and the revenue, but you’re now paying fees and damaging your standing with payment processors. It’s a worst-case outcome all around.
Let’s talk trendlines: Chargebacks are on the rise along with the e-commerce boom. Illegitimate disputes (a.k.a. friendly fraud) have spiked – nearly 3 out of 4 merchants surveyed in late 2024 reported about an 18% increase in friendly-fraud chargebacks over the last three years. The overall volume of disputes is climbing, reversing a temporary dip in 2023. One analysis (by Sift) noted dispute rates were up 78% year-over-year in Q3 2024, as fraud and opportunistic claims ramped up post-pandemic. And for a sense of scale: Mastercard reported that chargebacks cost merchants an estimated $117 billion in 2023 – a staggering figure that includes lost sales, fees, penalties, and overhead. It’s eating into margins industry-wide.
So what are smart brands doing? First, they’re treating chargebacks as avoidable by doubling down on customer communication and flexibility. A joint study by a helpdesk platform and a dispute firm found a telling stat: 80% of customers said they were never contacted by the merchant after filing a chargeback. No surprise, since by that point it’s often too late. But the real insight was before the chargeback: 23% of customers will file a dispute immediately when an issue arises, and another 38% will file within 1-3 days if they feel their issue isn’t resolved. In other words, you may have a window of just a day or two to intercept a problem (like a “product not received” or a refund that hasn’t hit yet) before the customer throws up their hands and calls the bank. Brands that excel here make it dead easy for a customer to get help – prominent “contact us” or live chat for order issues, insanely fast email responses, proactive order status updates, and empowered support reps who can refund or resolve without hassle. It pays to “compete with the bank” on resolution speed and convenience. If you can fix the problem for the customer just as quickly, why would they ever need to involve Visa or MasterCard?
Take Chewy, the pet supplies e-commerce darling, as an inspiration (even if it’s not a D2C manufacturing brand, their CX is legendary). Chewy has been known to proactively refund orders and even tell customers to donate the item instead of returning it if it’s not right. They famously send handwritten notes and flowers in response to customer situations. That level of empathy and responsiveness means issues rarely escalate – customers rave about them online rather than racing to dispute charges. “Most chargebacks happen because the customer feels ignored,” as one report summarized. The antidote is making sure no customer feels ignored or stuck in limbo.
Finally, some merchants are getting ahead of chargebacks by tackling the root causes in their operations. For example, unclear billing descriptors (as mentioned) are being fixed with plain-language, dynamic descriptors that include the store URL or product name. Also, more than 60% of retailers in one survey are now using or planning to use AI tools to flag potential friendly fraud and even automate dispute responses. Payment providers are introducing new programs (Visa’s Compelling Evidence 3.0, Mastercard’s First-Party Trust) to help merchants submit more info and fight illegitimate chargebacks. All that is great, but from a founder’s perspective, your first focus should be on reducing the reasons customers want to chargeback in the first place: clear communication, fast refunds, easy returns, and no surprises on the bill. That’s how you turn chargebacks from a tsunami back into a trickle.
The takeaway: Every chargeback is a signal that something in your customer journey went wrong. Treat it as such. Track them, dig into the reasons, and you’ll likely find patterns that point to process improvements. Maybe it’s a particular product that often “never arrives” (supply chain issue), or a payment descriptor that confuses people, or a segment of customers that didn’t see the refund policy. Fix those, and you not only save money, you preserve trust. Remember, a customer who calls their bank on you is probably not buying from you again. But a customer whose problem you solve quickly and fairly? They’re going to stick around.
Earning Trust Through Operational Excellence
As founders, we love to talk about brand story, product-market fit, growth hacks – the exciting stuff. Finance operations rarely get the spotlight. But as we’ve seen, the mundane stuff (refunds, invoicing, dispute handling) draws the line between a one-time buyer and a loyal advocate. Trust is built (or broken) in the post-purchase experience. It’s in that quiet period after the sale where your brand proves if it cares about the customer or not.
The good news: eliminating these friction points isn’t just better for customers, it’s better for your business. Speeding up refunds can drive higher repurchase rates. Pricing transparency reduces cart abandonment and builds credibility. Reducing chargebacks saves you money and keeps customers in your ecosystem. It’s truly win-win.
In the D2C world, we don’t get many face-to-face moments to impress customers – our “relationship” is often through packages, emails, and PDFs. So, every touchpoint has to count. A clean, honest invoice is a touchpoint. A fast, no-hassle refund is a touchpoint. Even how you handle a fraudulent charge or mistake is a touchpoint. These are the unsexy parts of the business, but polishing them can set you apart in a big way.
Think of trust like a bank account with your customers – every time you promptly solve a problem or avoid one entirely, you’re making a deposit. Every time you drop the ball or hide something, you’re making a withdrawal. Too many withdrawals, and the account closes for good. By investing in seamless finance ops, you’re continually depositing into that trust account. And trust, once earned, pays compounding dividends in the form of loyalty, positive reviews, and sustained growth.
In a world where customers have endless options, the true differentiator might just be operational excellence. The brands that win are those who sweat the details behind the scenes to deliver a frictionless experience front and center. So audit your finance ops for hidden friction. Turn those “invisible” issues visible, fix them, and you’ll not only remove sources of frustration, you’ll turn them into moments that delight and reassure. In the long run, trust is the most valuable currency we can earn, and it’s built transaction by transaction, refund by refund, charge by charge.
In short: Do right by your customers after the purchase, and they’ll keep coming back long after the first. The numbers prove it, and more importantly, it’s just good business – the kind that scales sustainably because it’s built on a foundation of trust.