Friendly fraud is more than an insult—it’s the main type of chargeback that small business merchants have to deal with, making it a big expense, in addition to the headache that it causes. Even the best credit card processing company can only do so much to protect merchants from chargebacks. It takes effort, and know how.
Generally speaking, friendly fraud happens when the merchant did everything right, but something leads the buyer to feel that they were not treated fairly. In the worst-case scenario, the business transaction is completed as usual, the product is shipped and delivered, but after, something goes wrong. Either the customer realizes something that they didn’t beforehand, or some other such circumstance causes the customer to have a complaint. If they feel it can’t be resolved adequately, they feel that the only recourse is to request a chargeback from their financial institution. If it’s charged back as the customer requests, it’s at a loss for the merchant.
Finding a strategy to minimize the effects of this type of chargeback can be difficult because there is nothing you really did wrong, and therefore, not much you can change to make them go away. While it’s a challenge to oppose a chargeback and get a positive outcome, it is possible. You’ll need to throw as much documentation as possible at the case to state your case for the legitimate completion of the transaction. Cover the basics, such as documentation of the transaction and delivery, especially tracking numbers and documentation from the delivery company. From here, branch out with real pictures of the product compared to the pictures that are posted online, and anything else that adds legitimacy to your case.
The best way to reduce chargebacks, by far, is to prevent them. Here’s how:
Creating a culture where chargebacks are less likely takes time and effort on a variety of fronts. As Moolah aims to be the best credit card processing company for your needs, we lead with education. In the end, you probably won’t be able to prevent all chargebacks, but if you’re doing your best to serve your customers at every step of the relationship, odds are, you’ll minimize them, and you’ll be winning over return customers in the process.