‘Friendly fraud’ at the root of almost half of merchant chargebacks, study finds

Only a third (33%) of chargebacks came from criminal fraud, according to a new study.

More and more shoppers are filing bogus card disputes that frequently leave merchants holding the bag on chargebacks, according to new data from technology and consulting firm Chargebacks911.

The survey of more than 200 online, multichannel and mobile commerce merchants found that 56% of respondents saw an increase over the last three years in “friendly fraud,” which occurs when customers file fraudulent disputes with their card issuers for various reasons, such as to get something for free or for convenience.

Now nearly half (46%) of merchants’ chargebacks came from friendly fraud. Only a third (33%) was from criminal fraud, the data said.

Many merchants don’t fight the chargebacks, and those that do often lose, according to the study.

 

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