The Hidden Cost of Chatbots – Why AI-Driven Customer Service Is Killing Your Conversions

The Hidden Cost of Chatbots

The data from this post is from a consumer research study that we performed from September to November 2024. We partnered with Digital Velocity and Audience Audit to prepare the research and gather the data with a margin of error of +/- 2.3 at a 95% confidence interval. We will be publishing the full research later this year.

 

You’ve probably noticed a chatbot when you’ve been shopping online before. They pop up in one of the bottom corners and ask if you need help. They’re actually fairly common because chatbots were supposed to revolutionize customer service. We understand why people thought that. After all, chatbots give fast responses, are available 24/7, and offer seamless support. But in reality? Many brands are using them in ways that frustrate customers and drive them away.

According to our research, 46% of consumers hate chatbots. This means that if you have skeptical shoppers trying to buy things on your website, chatbots can be an instant dealbreaker. Instead of making the buying process smoother, AI-driven customer service often creates roadblocks, kills trust, and tanks conversions. Why is this, though? Let’s talk more about it.

Why Consumers Hate Chatbots

So, what’s going wrong? Why do consumers really dislike chatbots? How can businesses fix it before they lose more sales? 

Let’s be real—no one wants to chat with a bot. If a customer is reaching out, they are more than likely to have a problem. When they’re met with robotic, canned responses, frustration skyrockets. Customers want to speak to a person that can understand what’s being said and can help them quickly. So, instead of feeling heard, they feel ignored, and for many shoppers, that’s enough to make them abandon their purchase entirely. In fact, research shows that skeptical consumers immediately think less of a brand if it relies on a chatbot for customer service.

While chatbots are fine for answering basic FAQs, they fail miserably when customers need real help. So, let’s say for example, someone’s order is missing, or they received a defective product. They’re already disappointed or maybe even mad. Do you think they want to read a loop of scripted responses that don’t address their issue? No way! They want a human who can empathize, take action, and make things right quickly. Instead, many brands make it nearly impossible to reach an actual person. This traps the customers in an endless cycle of automated dead ends. 

And that’s where trust ends. When people feel like a brand values their own time over real customer care, customers walk away. Especially for high-value purchases, shoppers expect a personal touch. They want personal care from someone who listens, understands, and helps. A recent study even found that one of the top things consumers love about shopping is knowing they can call a real person for support. 

The bottom line? If your chatbot creates more frustration than solutions, it costs you sales.

The Hidden Costs of Chatbots for eCommerce Brands

If you think chatbots are just a harmless addition to your website that takes the place of an employee that you don’t have to pay, think again. The wrong chatbot experience isn’t just annoying—it’s actively driving customers away. A whopping 35% of online shoppers are already skeptical of eCommerce brands, and a frustrating chatbot interaction only confirms their worst fears. It makes them think that this brand doesn’t care. Instead of winning over hesitant buyers, businesses are unknowingly pushing them straight into the arms of competitors.

And it doesn’t stop there. A bad chatbot experience doesn’t just cost you one sale—it can trigger a wave of negative word-of-mouth. A lot of people rely on word of mouth and reviews. While many people don’t take the time to write reviews, customers who feel ignored are quick to leave scathing reviews and tell all their friends about how they can reach anyone real to fix a mistake. That kind of feedback destroys brand trust, tanks conversion rates, and scares off future shoppers. 

Speaking of carts—chatbots are a major contributor to cart abandonment. Many shoppers ask pre-purchase questions before committing, and when they’re met with unhelpful or robotic responses, they leave. No second chances. No follow-ups. Just lost revenue. And when chatbots fumble refund and return requests? That frustration turns into costly chargebacks, higher processing fees, and long-term damage to your bottom line. 

Simply put, if your chatbot is getting in the way of real customer support, it’s costing you money, and it’s probably more than you think.

When (and How) Chatbots Can Work Without Hurting Conversions

Not all chatbots are bad—but they need to be used strategically. The key? Keeping them in their lane. Chatbots are best for repetitive tasks like order tracking, FAQs, and return policies. However, the moment a customer needs real help, they should have an easy way to connect with a human–not a chatbot. 

One of the biggest mistakes brands make is hiding their real customer support. If a shopper has to dig through pages of automated responses just to find a phone number or email, they’re already frustrated. Instead, make sure there’s always a visible “Talk to a Human” option—whether that’s a live chat that connects to an agent or a clearly displayed contact method. When it comes to high-ticket purchases (think $100+), this is non-negotiable–you need to have human customer service easily accessible. This is because customers spending real money expect real support. Forcing them through a chatbot-only system is a quick way to lose sales.

And if you must use a chatbot, make it smarter. Instead of relying on rigid, scripted loops, implement AI that actually learns from customer interactions. A good chatbot should recognize repeat customers, personalize responses based on past purchases, and escalate when needed. 

To put it simply, chatbots should assist—not replace—your human support team. 

The Best Alternatives to Chatbots

If chatbots are frustrating your customers, what’s the better solution? The key is blending speed, convenience, and real human interaction. 

1.One of the best alternatives is human-led live chat. Shoppers get real-time support from an actual person who can answer their questions, ease their concerns, and ultimately boost conversions. When customers feel heard, they’re more likely to buy things instead of abandoning their cart.

2. For brands that need automation but don’t want to sacrifice personal touch, a hybrid AI + human chat system is the way to go. AI can handle basic inquiries like order status and FAQs, while more complex issues are escalated to real agents. This setup keeps response times low while ensuring customers don’t feel trapped in a chatbot loop. Similarly, proactive customer support via email and SMS can make a huge difference. A simple, “Need help with your order?” message can reassure hesitant buyers and increase retention without forcing them to navigate an automated chat.

3. And don’t underestimate the power of self-service—when done right. Customers appreciate help centers, but only if they’re well-organized and easy to navigate. A strong FAQ section, video walkthroughs, and a clear “Still need help? Here’s how to contact us” option can go a long way in improving the user experience. 

The goal isn’t to eliminate automation entirely. It’s more about creating a customer support system that’s efficient and human-friendly. Because at the end of the day, people buy from brands they trust, not ones that make them feel like just another support ticket.

To close, it’s important to note that chatbots aren’t the villain. They can be great tools in certain situations. It’s all about how they’re used that makes or breaks the customer experience. So, while they’re great for handling quick, repetitive questions, relying too much on chatbot automation can leave shoppers feeling unheard and frustrated. 

Consumers really crave real human interaction, especially when they have a problem that needs solving. Many consumers are even willing to pay a bit more for better care and customer service. Brands that invest in personalized, real-time support (whether that’s through live chat, hybrid AI, or proactive outreach) will build stronger trust, reduce cart abandonment, and ultimately boost conversions. 

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