No matter what chargeback prevention tools or chargeback alert services merchant use to avoid chargebacks, it is next to impossible to attain 0% chargeback rate. There are many reasons or reason codes due to which chargeback can occur. Maintaining and reducing chargeback is always the top priority for every E-commerce merchant. Dissatisfied customers have a big contribution to chargebacks and they might choose to file a dispute than accepting a refund or an exchange. Below is the list of 11 chargeback statistics that every merchant should go through to understand the actual picture.
1. Increase in the rate of friendly fraud is up to 40%
2. Friendly fraud cases have been increased and have become a reason for more than 70% of chargebacks.
3. Card Not Present (CNP) frauds has increased by 40% and according to recent studies it will rise to $7 billion by 2020
4. Instead of resolving issues directly with the merchant, 8 out of 10 customers choose to file a chargeback.
5. Product not meeting customer’s expectation or the ones that do not match website description lead to 8% of the chargebacks.
6. Wrong item received contribute 15% of chargebacks whereas product not received contributes 26%. Together these reasons contribute 41% of
7. 49% of chargebacks happen due to miscommunication between the customer and the issuing bank. In a lot of situations, especially when it comes
to canceling subscriptions, misinterpretation by banks may lead to chargebacks.
8. For a nominal loss of every dollar, merchant, in reality, loses around $2.5 (this includes chargeback fee and merchandise replacement, in some
9. Successful fraud attack has increased by 33% whereas fraud attempts have increased by around 34%.
10. According to a recent report, if no action is taken against friendly frauds, 4 out of 10 customers (friendly frauds) commit fraud again
within 60 days.
11. By 2020, Friendly frauds will cost e-commerce business as much as $25 billion.
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Things to remember
- Customer committing intentional digital shoplifting provides the same reason for their conduct.
- Friendly frauds will never follow the proper process of requesting a refund or an exchange.
- Chargebacks have negative economic and operational impact on E-commerce operations.
- Customer not satisfied with the product or service contributes to chargebacks. So every business should know the tactics of good customer handling.
- To prevent chargebacks, stellar service is proved to be helpful.
Best practice to win chargebacks and frauds
- Use of Multiple Advanced Screening Technologies
- Use of Artificial Intelligence
- Chargeback Services
- Coordinating Real-Time Fraud and Risk Data
- Chargeback Alerts and Prevention Tools
- Automated Risk Scoring
- Minimal Software Downtime
For more assistance, please feel free to call us on +1(855) 465-4723. Our well-qualified executive will answer as many questions as you may have and resolve your queries in minimum time.