A financial technology company is offering tips to protect against chargeback, which it says has climbed steadily during the pandemic.
Chargeback occurs when a customer disputes a card purchase and successfully has the payment refunded, but is often a fraud.
Moneris‘ vice-president of customer experience, Yale Holder, says they recorded over 300,000 instances in 2021, costing Canadian businesses tens-of-millions-of-dollars.
Holder said “It could be legitimate because the cardholder had the card compromised, and therefore it was a fraud charge.”
“However the concern we were seeing is there has been an increase in what we call ‘friendly fraud.’ So these are actual cardholders using lax security measures by businesses to dispute actually receiving the goods and services.”
Holder’s wanted to advice businesses not to accept card purchases over the phone, since it’s incredibly difficult to verify the person on the other end is the actual cardholder.
Holder continued by saying “(The) first thing we want to encourage is that once you get notified of the chargeback, take steps early to get all your information, get your receipts, get proof of the transaction, and you can (beat) a large number of these chargeback attempts,”
Moneris also recommended simple steps that can be taken to lower the likelihood of chargeback in the first place.
This includes ensuring policies related to returns and cancellations are clearly stated, and watching for suspicious purchases that might appear random and expensive.
Online sales are generally safer, Holder says, but can be made even more so with the use of authentication tools.
Despite how prolific chargeback has become, only 15 per cent of small businesses attempted to dispute the claims last year.
This article was originally sourced by www.globalnews.ca.