Friendly fraud is a top offender during the holidays, where consumers claim they did not receive an item that they legitimately purchased. Friendly fraud can be intentional and accidental. With intentional friendly fraud, a customer intentionally lies about not receiving an item (or says they received a damaged or wrong item) to receive a refund from their credit card issuing bank. Sometimes this happens when a customer is dissatisfied with a merchant’s return policy and finds it easier to obtain a refund from the bank, bypassing merchant.

Accidental friendly fraud happens when a customer becomes confused about a purchase. She may not recognize the billing descriptor on her monthly statement, for example. In other cases, a relative may have borrowed the card and not told the cardholder about the purchase. In any event, the customer does not have nefarious intentions.

Fighting chargebacks requires end-to-end considerations and fraud controls. Merchants looking to beef up their fraud prevention for the holidays can read the full article here.

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