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.
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