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After Checkout: Reducing Chargeback Fraud

November 18, 2015 Published by

Chargeback fraud or “friendly fraud” occurs when consumers initiate unwarranted credit card chargebacks for items they knowingly purchased in an attempt to avoid paying for them. Chargeback fraud tends to increase around major sales and promotions – without wanting to miss out on a good deal, a consumer may overspend or purchase items they don’t need. Compelled by buyer’s remorse, they initiate a chargeback. [more] Fortunately, there are a few easy ways you can reduce your website’s exposure to chargebacks:

Make the returns process easier

A customer-friendly returns process with clear instructions and minimal penalties can encourage customers to return an item, rather filing a chargeback.

Clearly indicate pricing

Hidden fees and add-on charges may make a customer decide to file a chargeback. Make sure your checkout process uses full transparency to indicate prices for the order, shipping, and additional fees.

Streamline shipping times

Delivery delays can result in chargebacks if consumers feel the wait is too long. You’ll want to find and eliminate any inefficiencies in your shipping process, and keep customers updated on the status of their orders.

Take chargeback disputes seriously

Even if a chargeback is filed, there are still things you can do. Make sure each transaction is thoroughly documented (ID verification during checkout, delivery confirmation, etc.) so you have supporting evidence to file a dispute.