By Karisse Hendrick, Editor-at-Large, CardNotPresent.com
As retail merchants celebrate and recover from record-breaking sales in the 2015 holiday season, consumers are starting to receive their credit card statements, revealing their generosity and, perhaps, rethinking and regretting their holiday spending. While most consumers simply will resolve to spend less in the New Year and move on, many will call their credit card companies to dispute the charges in the form of chargebacks. The industry has dubbed this “friendly fraud,” though merchants know it’s anything but friendly.
Friendly fraud chargebacks can occur for several reasons beyond buyer’s remorse, though many merchants believe that is the main cause. They also can occur when a friend or family member borrows a credit card or if a customer service issue is not resolved to a buyer’s satisfaction. Because the “I don’t feel like paying for this” chargeback reason code doesn’t exist, merchants typically will see “goods not received,” “credit not processed” or “unauthorized transaction,” among others, as reasons for a friendly fraud chargeback. A fraud chargeback reason may be used in cases of friendly fraud, though a review of the original order can typically determine if the transaction was a result of true fraud or friendly fraud.
To Respond or Not to Respond
Managing chargebacks can be overwhelming for some companies. Because it can be time intensive to research the original transaction, determine the right course of action and create rebuttal documentation, some merchants choose not to review or respond to their chargebacks. There are benefits, however, these merchants may not have considered.