What Are Friendly Fraud Chargebacks?

As a merchant services professional, if the businesses you serve are encountering friendly fraud chargebacks, how can you help them?

But first, what are friendly fraud chargebacks? 

Friendly fraud happens when a cardholder uses the chargeback process incorrectly:
· As an intentional attempt to get something for free -or-
· An innocent misunderstanding.

Here are a few examples:
· Someone uses the card of a family member without letting them know. The cardholder sees the transaction and does not recognize it since they didn’t make the purchase.
· A cardholder doesn’t recall a transaction because the billing descriptor shown on their statement doesn’t seem familiar.
· Someone signs up for a service with a free trial, forgets to cancel before the free trial ends, and then calls their bank to complain once the charges hit.
· Someone makes an online purchase, receives the merchandise, misses the return window and then files a chargeback instead.

Why should merchants care whether a chargeback is friendly fraud vs. malicious fraud?

Friendly fraud is a chargeback that they have a chance of winning, which means they can recover the revenue that is rightfully theirs.

Malicious fraud is not.

That’s a big difference.

If your merchants are encountering friendly fraud, we dive into the specific ways to help them in this post.


Visa Dispute Monitoring Program

The Dispute Monitoring Program is Visa’s version of discipline and consequence for merchants who exceed the chargeback thresholds they deem as acceptable. If merchants aren’t careful, they can ultimately end

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