There are many schemes used to defraud eCommerce merchants which range from buying goods with compromised identity and payment account information to consumers using their real information and later abusing either the merchant’s return policies or their issuing bank’s chargeback and dispute process in attempts to keep both the purchased good or service and their
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In response to an increasing number of consumers making erroneous chargeback claims that a good was never received or a transaction was never authorized, issuing banks have adjusted their chargeback procedures to demand more from consumers initiating the chargeback while also ruling in favor of the merchant more often than before. Read More
The National Retail Federation estimates that return fraud cost merchants $14.37 billion in 2011 up from $13.66 billion in 2010. In a survey of over 100 retailers the NRF found that return fraud affects an overwhelming majority of merchants through various types of friendly fraud schemes. Read More
Two U.S. brother’s, Andrew and Allen Chiu, we’re blocked from making purchases from Nordstrom.com after excessive chargeback claims and causing the department store significant losses in friendly fraud. The two then moved on to a scam in which they illegitimately earned commission payouts, but they have since been arrested and have pled guilty on charges
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In efforts to combat merchandise return fraud retailer Best Buy has instituted a system where they scan an identity document when someone makes a return in-store. If the person has suspicious return and exchange habits they may be blocked from making future returns for 90 days. Read More
