The holidays bring payment spikes … and friendly fraud
Holiday shopping and big daily events such as Black Friday and Cyber Monday can undoubtedly do wonders for revenue, but what many merchants fail to realize is the increased headache and costs associated with friendly fraud.
Otherwise known as chargebacks, friendly fraud occurs when consumers receive their credit card statements and the reality of their expenditures triggers buyer’s remorse.
As a result, the consumer contacts their issuing back to reverse some charges. Fearful of losing valued customers, and often without detailed transaction information, issuers tend to offer refunds or initiate chargebacks.
Adding fuel to the fire, some customers dispute legitimate transactions due to billing confusion, such as the merchant’s name not matching their trading name, or forgetting about a purchase made. Consequently, merchants face loss of revenue and merchandise, plus fines and fees applied by acquiring banks.
To prevent severe losses, merchants and issuers must collaborate and share transaction information to resolve issues at the earliest possible stage.
With overwhelming sales ringing through the registers on Black Friday and Cyber Monday and throughout the rest of the holiday shopping season, merchants need to ensure they deliver the best customer experience while arming themselves against chargebacks at an already frantic time of year.