Company
Date Published
Author
Emma Roberts
Word count
1489
Language
English
Hacker News points
None

Summary

Friendly fraud, a significant concern in the eCommerce industry, is a form of credit card chargeback fraud where customers dispute legitimate transactions instead of requesting refunds from merchants, leading to substantial financial losses for businesses. Accounting for up to 70% of all credit card fraud, friendly fraud costs the industry over $132 billion annually, with the frequency of occurrences increasing by 41% every two years. It can be accidental or deliberate, with common scenarios including claims of non-delivery, mismatched items, or unrecognized transactions, often resulting in chargebacks that businesses bear the cost of. To combat this issue, businesses are advised to implement clear return and refund policies, enhance customer service, use fraud detection tools, and ensure transaction transparency to minimize confusion and prevent repeat offenders. By adopting these strategies, eCommerce businesses can better protect against friendly fraud and safeguard their revenue from the detrimental impacts of chargeback abuse.