Chargeback Fraud
Overview
Chargeback fraud, also known as “friendly fraud,” occurs when a customer disputes a legitimate transaction to get a refund. While chargebacks protect consumers from fraud, abuse of the process hurts merchants with financial losses, higher fees, and reputational damage. E-commerce, online gaming, and digital services are frequent targets.By combining fraud scoring, delivery confirmation, and transaction monitoring, businesses can reduce exposure to chargeback fraud.
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Related Terms
FAQ
What is chargeback fraud?
When a legitimate transaction is disputed falsely to claim a refund.
Why is it a problem?
It creates revenue losses and penalties for merchants.
Who is most affected?
E-commerce and online service providers.
How can it be prevented?
With proof-of-delivery, fraud detection, and transaction scoring.