Why Friendly Fraud is On the Rise

No matter how friendly it might seem, fraud is theft of goods or services that can prove debilitating to the financial health of an online merchant. It’s steadily on the rise for a variety of reasons. Keep reading to find out why it seems to be a bigger problem every day.

Explosion of Internet Shopping

The network of online shopping merchants is extensive and covers the entire globe. Very few people have not at least purchased one item online at some point in their total shopping history. Business is definitely booming, but so is the rise in friendly fraud. Friendly fraud is when a cardholder files a chargeback to get money returned for a product or service while benefitting from the service or keeping the product in question.

Ease and Convenience of a Chargeback

Customers often gravitate towards friendly fraud chargebacks as an easy means to recover their money, rather than spending the time and effort to try and get a refund with the original merchant. The reasons vary from simply wanting an easy out, to the knowledge that a successful refund may not be had by approaching the merchant.

The Problematic and Enabling Banking Institutions

Competition is high for banks in both getting and retaining credit card customers. Many banks turn the other way and enable the continued abuse of the chargeback system. Many times lines of communication are non-existent between merchants and issuing banks. No investigatory efforts are ever made to determine if the chargeback is for legitimate reasons. It leaves the merchant continually holding the bag in their rush to make the banking customer happy.

Chargeback Regulations Leave Loopholes

When it comes to chargebacks by a customer, they happen frequently because they are allowed without any real proof of why it’s necessary to circumvent the merchant. The loopholes in the regulations of this activity make it hard for an online merchant to protect their revenue.

Limited Ability for Online Merchants to Fight the Problem

In an attempt to keep moving forward and generate revenue, most online merchants avoid the hassles of trying to fight the scourge of friendly fraud. Little has been done to make it easier to detect problems with chargebacks and friendly fraud before Ethoca came on the scene. You now have a way to combat this type of “cyber shoplifting” and keep those dollars in your pocket. You can join a strong network of card issuers and merchants that alert one another to this ever-increasing problem.

Don’t settle for financial losses that are preventable through networking services that can resolve disputes faster and not leave you constantly losing revenue from fraudulent chargebacks. Ethoca can change the landscape and put you in a better position to fight fraud.