How Can Merchants Stop Friendly Fraud?

Merchants won’t be able to completely eradicate the chances of friendly fraud. 

That’s because the lines between what’s true fraud or what’s just a child playing with Dad’s phone can be blurry. Friendly fraud can also include cases where the card holder forgets about a payment or subscription, calls their Issuer to chargeback a wrong delivery, or blocks an unsatisfactory subscription through their bank. And fighting friendly fraud can be exceptionally difficult without burden of proof, intent, and transaction details.     

You can thank the boom of ecommerce and ease of submitting chargebacks for the influx of friendly fraud. Ecomm makes it easier than ever to shop, but the removed nature of Card Not Present (CNP) also makes it hard for card holders to track purchases and easy to chargeback payment. Submitting a chargeback is now as easy as calling up your bank and saying “nope, I didn’t buy $4,000 in Candy Crush tokens.”

You can’t 100% stop friendly fraud. That’s because friendly fraud is not always malicious. It tends to be card holders thinking their card was stolen or forgetting that they made a purchase/subscription.

8 ways to reduce the chances of friendly fraud:

1. Use clear and transparent product descriptors and descriptions
2. Make contact info easy to find
3. Use clear and concise billing descriptors
4. Publish refund and return policies
5. Always provide multiple customer support channels, respond to all inquiries and concerns, and provide tracking numbers
6. Keep detailed transaction records and customer service interactions
7. Use AVS, 3D Secure, and AVV codes
8. Fight every single chargeback!

Read More About Friendly Fraud

March 25, 2024