The history of chargebacks is pretty straightforward; however, the current use of chargebacks is quite different from lawmakers’ original intention. Find out how the history of chargebacks has evolved into friendly fraud.
The most common types of chargebacks are merchant error, criminal fraud and friendly fraud. Do you know how your involvement in each of these chargeback situations affects your bottom line?
Is it possible to take chargeback prevention too far? It is essential for merchants to do all they can to protect their profits, but legitimate chargebacks are a form of consumer protection. Merchants shouldn’t use chargebacks as a bargaining chip or justification of harsh punishments.
Chargeback fraud is an expensive problem for card-not-present merchants, and it’s a growing problem too. Visa estimates friendly fraud costs nearly €12 billion each year.
Ideally, merchants will prevent friendly fraud before it happens. However, that is easier said than done!
The digital revolution has brought about increased growth opportunities. However, with the enhanced profitability has come an increase of deceptive behaviours in the form of chargeback fraud.
One of the greatest profit-boosting tools has also become a friendly fraud liability.