Read Monica Eaton’s Insight on the Scope of Friendly Fraud Threat
The Financial Post is just the latest in a long line of publications to acknowledge the growing threat of friendly fraud in recent months.
In their recent piece, ‘Friendly fraud’: Online Retailers are Grappling With New Forms of Digital Deception, Financial Post’s Hollie Shaw consulted with several industry experts, including our own Monica Eaton, on the ever-rising friendly fraud threat.
More than 80% of Chargebacks are Fraud, But Merchants Only Fight 20%
Eaton suggested that, according to the most recent figures for Q1 2016, friendly fraud accounts for 72.4% of all ecommerce chargebacks so far this year. However, that figure is expected to rise as the year progresses, especially as we move closer toward the holiday shopping season:
“We have found that over 80% of customers who contact the bank to get a refund never bothered to contact the retailer first,” Monica explained, referring to research released last year suggesting that as much as 86% of all chargebacks are actually fraudulent.
“The majority of them are not trying to steal or shoplift online, they are actually just doing it because they have been trained that this is an acceptable and easy option for getting a refund.”
Despite the fact that chargeback fraud is so widespread, however, merchants dispute fewer than 20% of all chargebacks. Rather than fight back, merchants tend to passively accept chargebacks as just another cost of doing business, believing that they are too costly and time-consuming to challenge.
A Friendly Fraud Solution Within Reach
The average merchant simply doesn’t have the time or resources to devote to manually reviewing every transaction dispute. Without professional expertise and cutting-edge technologies, merchants have little choice but to accept friendly fraud losses. Luckily, Chargebacks911® can help.
Armed with our unparalleled technologies and services, merchants can focus less energy on risk detection and more on growing their business while retaining more revenue.
Contact Chargebacks911® today to learn more.
