5 Ways to Combat ‘Friendly Fraud’
3. Keep in communication with your customers, and document any customer interaction. A monthly newsletter will remind them you're there to assist with any resolution they may require and are willing to work to help lessen the necessity for them to contact their bank. Proper documentation of your interactions can also make the difference between winning or losing a chargeback case.
4. Monitor suspicious activity. Multiple product orders using the same shipping address but different credit cards, or IP addresses that don't match the billing address are typical indicators of friendly fraud.
5. Fight illegitimate chargebacks. One of the best ways to reduce friendly fraud is to make sure customers are educated on the consequences involved with the crime. Without taking responsibility to fight back as a legitimate merchant, you're inadvertently endorsing this behavior. In addition, you'll win back some of the revenue you initially lost as a result!
Friendly fraud isn't always attributed to criminal or malicious intent. It's more likely than not that merchants end up victims of these incidents due to consumer ignorance or negligence. Customers don't want to take the extra time to contact the merchant, they can't find the information they need to reference for their order, they forgot to return a product within the time frame, etc. A call to their credit card company is a quick solution with seemingly no consequence.
It's taken years of education on the chargeback process to educate consumers about its existence. The good news is there are a lot more merchants than there are credit card companies; working together to correct this problem is key.
Monica Eaton-Cardone is the co-founder of Chargebacks911, a company established to provide solutions to merchant chargeback issues.