Friendly fraud, a significant contributor to the $32 billion annual payment card fraud worldwide, poses a substantial challenge for merchants, as detailed in the PaymentCloud article “Friendly Fraud: What is it and How Can You Prevent it?” This type of fraud occurs when a cardholder disputes a legitimate charge, often leading to costly refunds for products or services already received.
For instance, a customer might order sneakers online and, after receiving them, falsely claim they never arrived, thus receiving a refund while keeping the product. Identifying friendly fraud involves looking for signs like claims of non-receipt, disputes over not receiving refunds, forgetting specific purchases, or late chargeback disputes.
The consequences for merchants are severe, including financial losses from refunds, resource-draining dispute processes, and potential fees. Additionally, excessive chargebacks can endanger merchant accounts, leading to higher processing costs or account termination. For consumers, engaging in friendly fraud can lead to increased product prices, difficulties in processing legitimate chargebacks, and even criminal charges in severe cases.
Kombatix emerges as a crucial ally in this context, leveraging data from an advanced fraud screening network to help merchants identify and challenge these fraudulent disputes effectively. To learn more about how Kombatix can transform your approach to handling friendly fraud and to join the network of businesses effectively managing these challenges, click here. This step could be the key to securing your transactions and upholding the integrity of your business dealings.
