Friendly fraud, also called chargeback fraud, happens when legitimate transactions are disputed by customers who claim that they did not receive their purchased goods or did not authorise the transaction. This issue is particularly prevalent in online shopping, where the convenience of e-commerce is accompanied by vulnerabilities in delivery and payment systems.
Why is friendly fraud increasing?
The rise in online shopping has created more opportunities for friendly fraud to occur. Deliveries left unattended or in designated “safe places” without requiring a signature are particularly susceptible to fraudulent claims of non-receipt. Economic factors, such as the cost-of-living crisis, have also contributed to its prevalence, as financially strained customers may see this behaviour as a way to save money or acquire items for free.
Peak shopping periods, such as Christmas or Black Friday, exacerbate the issue. During these times, the sheer volume of deliveries overwhelms couriers, increasing the likelihood of unattended parcels. High demand and tight deadlines may lead to errors or insufficient tracking, further enabling dishonest claims.
According to Mastercard, implementing enhanced tracking technologies, such as GPS or photographic evidence of deliveries, has proven effective in reducing disputes by providing concrete proof of receipt. Using a same day courier Glasgow service from All About Freight, for example, may also mitigate this risk.
Mitigating friendly fraud
Retailers and couriers are adopting proactive measures to combat friendly fraud. Secure delivery options, such as parcel lockers, ensure packages are collected in a controlled environment. Enhanced tracking solutions, including photo evidence and precise timestamps, offer additional safeguards against false claims.
For high-value items, requiring a signature or identification upon delivery can deter fraudulent activities. Furthermore, predictive analytics can identify suspicious patterns, allowing businesses to flag repeat offenders and adapt their delivery processes accordingly. Even industries reliant on efficient logistics must consider these measures to maintain trust in their services.
Friendly fraud poses significant challenges to retailers and couriers alike, impacting profitability and customer trust. However, with robust systems and preventative strategies, businesses can minimise its effects while maintaining a seamless shopping experience for honest customers.
