How e-retailers can cut their losses from ‘friendly fraud’ chargebacks

An expert shares tips for online merchants.

Amy Dusto

Over the last two years, the rates of “friendly fraud” incidents—when customers make a purchase, receive the item or service, then dispute the charge and get an unwarranted refund—have grown 40%, says Monica Eaton-Cardone, CEO and co-founder of Chargebacks911, which helps e-retailers fight back against and this type of fraud.

There are a number of simple steps retailers can take to prevent fraud by normally law-abiding consumers, as opposed to professional criminals. However, in order to curb its growth, merchants must fight back when it happens, she says. Dismissing it as not worth the time to address only makes the problem worse, she says.

“The merchant has to take responsibility to help reverse these statistics by righting the wrongs out there,” Eaton-Cardone says. “Merchants have to realize they’re not in a bubble by themselves, they’re operating in a whole industry and what they do affects other merchants as well.”

In the meantime, here are three steps retailers can take to cut down on friendly fraud:


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