Frauds associated with online businesses have been on the rise in the past few years. This includes friendly fraud that has continued to hurt businesses in their day to day operation. But the big question remains, how does friendly fraud look like?
Friendly fraud, mostly known as friendly fraud chargeback refers to a situation when a customer contacts his or her credit issuer to dispute charges. This is after the buyer purchases a product in an online store. It is the aim of the merchants, therefore, to stop the occurrence of such frauds before they happen. Stopping friendly fraud, however, is not simple. It is so since the card numbers, names and addresses of the buyer look good, but what their intention is, remains in question.
Studies confirm that approximately 30% 0f all chargebacks are as a result of friendly fraud. Therefore, there is a need to minimize the occurrence of friendly fraud in your business as a merchant. This can get done through;
1. Implementing an All-Time Communication Mode with Customers
Customers who do shopping through online stores operate at any time of the day. As a result, your customer service should work the same way and be responsive regardless of what time it is. If your customers cannot reach to you easily, there is a probability that they will file for a chargeback. Being active with your customers increases their trust with you, creating loyalty towards your brand. This will help to lower the risks of friendly fraud occurring.
2. Incorporate a Payment Agreement
Having a payment agreement with your customers is very crucial and very beneficial. First, it will keep off fraudsters from purchasing anything from your store. And if they do purchase, it will give you as a merchant a chance to stand against any chargebacks they file.
3. Employ the use of Stringent Authorization
Employ the use of Stringent Authorization will need customers to submit full details about their credit card information. As a result, they need to verify and review their orders before the final purchase. In case of large purchases, buyers will be needed to send their email addresses for confirmation.
Phone call initiation may also be necessary to finalize purchases. As a merchant, you need to have as much information possible about your customers. These data should also be easy to access. By doing this, you will know whether a customer is known to make fraudulent chargebacks claim after making purchases frequently.
4. Improved In-Store Customer Experience
In-store customer experience gives buyers a reason to get off their computers and have a walk through the store. This helps to tackle friendly fraud chargebacks in online stores, in addition to increasing sales of a business.
5. Simple Product Return Process
It is advisable that you make it easy for customers to return items they had already bought in case they don’t meet their expectations. By doing this, it will be hard for customers to fill chargebacks claims with the banks. It will also be hard for them to claim that the product was not per the descriptions. It is good also to help customers print the pre-paid shipping labels. This label should also include a tracking code.
Friendly fraud eats deep into your investments and can lead to huge losses. Having a plan to solve it, therefore, is greatly recommendable. Resolving this issue, however, is not a simple task. Consider employing the above five tips, for a chance to help reduce the occurrence of friendly fraud in your business.