What is causing the rise of chargebacks for small businesses? Find out more.

1. Chargebacks and Friendly
Fraud: Who’s To Blame?

2. Chargebacks and Friendly Fraud: Who’s To Blame?
• Let’s face it – no merchant wants to be hit with a
chargeback.
• Not only can a chargeback put a merchant out of money,
but can also be a lengthy and complicated process.
• Chargebacks occur when a consumer disputes specific
charges from their account and are ultimately protected
from receiving responsibility for the charge.
• Recently, merchants have been hit by a plethora of
chargebacks, causing damage to some businesses.

3. • What is causing this rise of chargebacks? Experts feel EMV
has played a role in this trend.
• Since the rollout of EMV, many merchants who lack EMV-
capable equipment have become overwhelmed with an
increase of chargebacks.
• If a chip card is swiped at a non-compliant terminal, the
merchant is held fully responsible in the instance of a
fraudulent or a non-fraudulent chargeback.
Chargebacks and Friendly Fraud: Who’s To Blame?

4. • Another issue is that not all EMV-capable terminals
currently have the applicable EMV certification and
software ready and installed.
• This has caused a rise in friendly fraud instances, where a
consumer can initiate a chargeback against a merchant
as their terminal was not EMV-ready and could not
process their chip card with EMV.
Chargebacks and Friendly Fraud: Who’s To Blame?

5. • Interestingly enough, women are responsible for more
chargebacks than men.
• When dealing with online purchases, women were held
accountable for 76% of online chargebacks.
• Experts found that with regarding online sales, women
tend to be pickier than men with the purchases they
receive and were more apt to ask for a refund on a
product.
Chargebacks and Friendly Fraud: Who’s To Blame?

6. • “If a company caters to a female-dominant
demographic, they should proactively plan for
chargebacks,” said Monica Eaton-Cardone, co-founder
of Chargebacks 911.
• “This means using ultra-precise language when
describing products, posting up-to-date images from
various angles, investing in high-end customer service,
and creating a clear and transparent refund policy.”
Chargebacks and Friendly Fraud: Who’s To Blame?

7. • However, not all chargebacks are a result of a fraudulent
transaction, and friendly fraud is the perfect example.
• In fact, over 75% of chargebacks are a result of friendly
fraud – most instances occurring online.
Chargebacks and Friendly Fraud: Who’s To Blame?

8. • Many times consumers will commit friendly fraud and
dispute charges related to the following:
– The consumer didn’t receive the item on time
– The consumer never received the item they purchased
– The consumer felt the service or item was misrepresented of
what was offered
– The consumer received the product but deliberately disputes
the charge to get it for free
Chargebacks and Friendly Fraud: Who’s To Blame?

9. Chargebacks and Friendly Fraud: Who’s To Blame?
• “Friendly fraud happens when you as a consumer make
a purchase, where nobody saw you in person -- over the
phone or online -- and you received the merchandise or
the service, and then you got a refund from your bank,"
said Eaton-Cardone.
• Regardless of the friendly fraud situation, the merchant is
the one held liable for not only the cost of the product,
but also for shipment costs as well as chargeback fees.
• Visa revealed that friendly fraud causes an estimated
$11.8 billion in losses and is one of the main e-commerce
threats behind phishing scams.

10. • Since chargebacks can be a costly endeavor to handle,
those merchants who experience a chargeback should
handle it quickly and begin the claim process as soon as
possible.
• Merchants who wait around could end up being issued
the chargeback, ultimately resulting in a loss of revenue.
Chargebacks and Friendly Fraud: Who’s To Blame?

11. • Chargebacks are unfortunately a situation merchants of
all sizes could be faced with.
• The emergence of EMV technology brought on an
increase of chargebacks due to a lack of EMV-capable
solutions and necessary software.
• Friendly fraud incidences have also spiked,. All in all,
merchants who do experience a chargeback should take
the necessary steps to handle it as soon as possible to
prevent further damage and revenue loss for their
business.
Chargebacks and Friendly Fraud: Who’s To Blame?

12. Looking to prevent Chargebacks and Friendly Fraud?
Contact First American Payment Systems and get started today!