Chargeback Fraud
In addition to the prevention measures outlined above, you should be aware of chargeback fraud and how to protect themselves. One of the fastest growing types of chargebacks is what’s known as “friendly” fraud — when consumers purchase products with the intent of initiating a chargeback in order to get free merchandise.
The person committing the fraud will often claim that a product was not delivered, was not as described, or that they simply did not order a product. Especially since the recession, this type of fraud is on the rise, and is prevalent for card-not-present transactions. Check out our article on
friendly fraud for a thorough explanation and steps you can take to protect yourself and your business.
Unfortunately, chargebacks are one of the “costs of doing business” when accepting credit cards.
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