We Fight "Friendly Fraud"

Chargeback fraud, or "friendly fraud" is when a customer makes a purchase online with their own credit card, then contacts their card-issuing bank to dispute the charge.

Some examples of this type of fraud include:

• The customer claims the item wasn't delivered when it was.
• The customer claims the item doesn't match the description.
• The customer claims they returned the item, but didn't get a refund.
• The customer claims they canceled the order but it was sent anyway.

Roughly 71% of chargebacks are from bad customers.

A 2019 study estimated that as many as 71% of chargebacks are not from stolen or compromised credit cards, but from bad customers who use one of the above excuses to reverse their credit card charges. If you've been running your online store for any length of time, it's likely you've encountered one or all of these excuses for a chargeback. All shoppers have to do is contact the bank to dispute a purchase and claim whatever falsehood best serves their purpose.

You know you sent the goods, you know they were delivered, you know the product works exactly as it was advertised, and you know the customer never once contacted you to indicate there was a problem. Yet, in these instances, the bank does little to no investigation; they take their customer at their word, take the sales proceeds out of your bank account, and return the money to the customer.

When this happens, you lost the sale, the goods, your shipping costs, and to make matters worse, the customer's bank charges you a "chargeback fee" for the reversal. And there's nothing you can do about it.

Other anti-fraud tools, which use machine learning to search for suspicious behavior, are great and you should absolutely use them. But the reality is they're only helpful when you're dealing with cards that were actually stolen. When the person committing the fraud is the cardholder themselves, anti-fraud tools won't detect any problems. Since there's nothing suspicious about a customer who buys something and ships it to their own address, tools that identify suspcious behavior will never catch them!

Bad Customer works differently.

Our platform doesn't try to guess whether or not a transaction is suspicious. Instead, we collect chargeback reports from millions of online transactions and identify the "bad customers" by looking at their chargeback history with other sites. If a lot of chargebacks are associated with a customer, or the address they're sending their goods to, we'll warn you so you can decide if you still want to ship the order or cancel it.