From Policy Abuse to Friendly Fraud: Retailers Face Billions in Revenue Loss
David Jimenez, CRO of Chargebacks911, was recently interviewed by the Fashion United blog. In his interview, David warns merchants that digital fraud is growing year-over-year. At the same time, disputes are becoming less and less difficult for cardholders to initiate.
FashionUnited offers the latest fashion news, archives, display advertising, trade statistics, career center, employer branding, and events calendar. In addition, the FashionUnited Network provides a platform for fashion professionals to connect, discuss, and share ideas.
Consumers and brands alike have settled into the new modes of approaching commerce. In effect, businesses have been facing a rising volume of fraudulent activities. From account takeover to policy abuse, to chargeback and friendly fraud, retailers are looking for ways to mitigate different types of fraud costing them billions in revenue annually.
“Friendly fraud is probably trending because of how easy it is to raise that dispute with the banks [given] the probability that the bank is going to look out for my interest,” David said, when asked to weigh in on the phenomenon. “Nowadays, I can log into my phone and I'm two clicks away from pushing a dispute button. And the bank doesn't even challenge the reason why I'm disputing the transaction. They just put the burden onto the merchant to be able to respond to that chargeback.”
Fashion United cites the 2021 Chargeback Field Report from Chargebacks911, which quantifies a year-over-year 21% increase of friendly fraud between 2018 and 2021. Of further note, this was in addition to the 25% increase in chargeback issuances due to COVID-19.
