COO Monica Eaton-Cardone Gives Context for Friendly Fraud Fears
Friendly fraud causes more than half of all chargebacks, and the problem is only getting worse, as revealed in a recent feature by Card Not Present. Citing research by Chargebacks911, the article notes that a lack of knowledge and resources are the primary obstacles to preventing chargebacks.
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As Chargebacks911 COO Monica Eaton-Cardone points out in the piece, the core problem is that merchants can’t identify true chargeback sources. “During our research, we found that identifying friendly fraud topped the list of the hardest things about managing chargebacks,” she says. “If a merchant can’t detect friendly fraud, it will refund the customer to resolve this dispute. This means that merchants are refunding unjust disputes a lot of the time—opening themselves up for future attacks by looking like an easy target.”
Merchants, banks, and consumers need a better understanding of chargebacks. Achieving that demands considerable energy be dedicated to education and additional resources, though. Merchants need to learn how to identify chargebacks by their source, and how to fight back based on that insight.