A situation where a legitimate transaction is disputed by the cardholder, often due to forgetfulness or misunderstanding.
Merchants strive to keep customers satisfied. But in some cases, "satisfied" customers take advantage by committing friendly fraud – unlawful chargebacks on legitimate purchases. While disruptive, understanding techniques for uncovering friendly fraud can help merchants separate deceitful cardholders from genuine disputes.
Friendly fraud refers to chargeback abuse where cardholders request reversals on transactions they did actually make or intend to make. Motives include:
Since banks often automatically side with cardholders, friendly fraud causes costly headaches for merchants.
Look for these indicators of a friendly fraudster:
No single indicator proves friendly fraud. But analyzing circumstances and patterns can reveal deceptive disputes.
Proactively fight friendly fraud through:
With vigilance, merchants can curtail fraudsters and maintain a smooth customer experience.
Friendly fraud erodes merchant revenue through ill-intended disputes. But by exposing telltale indicators and strengthening prevention, merchants can thwart deceitful chargebacks while still prioritizing genuine satisfaction.