June 24, 2020
When many businesses and boarders closed due to social distancing and stay at home orders, card-not-present transaction volume surged, creating an additional catalyst for increased fraud and chargebacks. A sharp increase in the volume of ecommerce has grown globally as a result of COVID-19, with one report showing a staggering 40% increase since the declaration of U.S. state of emergency on March 13.
COVID-19 is fueling fraud and chargebacks, with the vast majority of merchants being ill equipped to manage current volumes.
According to Chargebacks911, chargeback volumes have increased by 23% with notable high risk sectors, such as travel and airlines, reporting three to four-fold increases compared to 2019.
Despite additional investment and attention by the card associations to help remediate chargeback growth; the payments industry has continued to experience trends in excess of predicted expectations.
With the unstable economy and rising job losses, cardholders are under increasing financial pressure – a notable and contributing factor to the present surge in illegitimate chargebacks known as friendly fraud.
In the wake of this pandemic, expanding opportunities to exploit loopholes in the chargeback process offers a timely reward to consumers, providing a ‘no-risk’ opportunity to recapture funds from their previous legitimate card purchases, primarily due to the lack of capacity merchants have to defend themselves. It’s one of the biggest pain points associated with chargebacks. Merchants forfeit all revenue if they fail to respond or lack the competency to defend themselves. The primary reason is because issuers aren’t getting the feedback they need to identify and correct behavior. Without more proactive action from the merchant, continued exponential chargeback growth will become a reality.
While there is definite need for chargebacks—especially during a crisis to help consumers recover losses from related issues, such as non-delivery or closed businesses— without equal attention from the merchant to rectify wrongfully received consumer refunds, unchecked behavior is at risk of becoming the new standard.
But there are products that can help: introducing Disputes Deflector and Disputes Defender. Merchants can take advantage of a chargeback prevention tool and friendly fraud defense management system, geared to proactively take action on behalf of the merchants; to prevent in-flight chargebacks and recover funds from those that are illegitimate – with near immediate results.
Leveraging our existing platform powered by Chargebacks911; merchants can access assistance without the requirement of technical resources or ongoing full-time employee support.
Benefits to the merchant include:
Reach out today to learn how to get started implementing a robust chargeback prevention and defender solution so you can protect your revenue.