9th January, 2023
Cardholders intentionally or inadvertently disputing authentic transactions remain areas of concern for merchants.
The industry continues to highlight issues when we think of friendly fraud. While customers have become smarter, looking at what’s happening with address fronting, muling and de-shopping, travel merchants continue to be wary of what is called chargeback fraud. There is also discussion around chargeback alerts and real-time responses. Not only data but time is also of essence. It is vital for merchants to ascertain instances when a chargeback is filed without a valid reason to do so.
Specialists point out that transaction muddle or slip-up has risen in the last couple of years as consumers shop and pay digitally more often now, plus there is also the case of an array of connected devices. Also, the dispute process is being exploited. When there is a deliberate first-party fraud, the cardholder is fully mindful of their activity and how they might benefit in the end. They also tend to repeat such acts, and when they witness no corollaries, they might be lure to go for it again.
According to an estimate by Chargebacks911, shared last year, friendly fraud will represent 61% of all chargebacks by 2023. At the same time, the average chargeback costs $191, with merchants bearing more than two-thirds of the financial impact.
Controlling it
Data analysis can help in understanding the case of a friendly fraud, as the shopper isn’t going to admit it. Create accurate first-party fraud definitions specifically for the travel industry. Label cases as red flags and then prepare a response. Also, an ongoing area of focus is count on data and information shared by the merchant and issuer cardholder data in attempt to gain visibility into transactions and disputes. For a merchant, progress is being made in terms of assistance and alerts in near-real-time and take appropriate action.
By Ritesh Gupta, Ai Events
