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Friendly Chargeback Fraud
Friendly chargeback fraud, often shortened to friendly fraud, occurs when a customer disputes a legitimate transaction, often expecting free goods or services in the form of a refund. Commonly, the customer falsely claims they did not receive the product or service, it was not as expected, or that the transaction was unauthorized. This type of fraud is termed “friendly” because it is initiated by the actual cardholder instead of a fraudster using stolen information.
Friendly chargeback fraud can significantly impact businesses by causing financial losses, increasing chargeback ratios, and damaging relationships with customers as well as payment processors.
Businesses can combat this by maintaining detailed transaction records, implementing clear return policies, and using tools to verify delivery and customer identity. Chargeback management tools simplify much of the process of responding to inquiries and disputes, offering a further layer of defense against friendly fraud.
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