Almost 8 out of 10 merchants have seen an increase in ‘friendly fraud’ over the past three years.

Chargeback fraud, also known as ‘friendly fraud,’ is when a customer makes an e-commerce purchase with their credit card and then asks for a chargeback from the issuing bank following receiving the product.

According to new research from Chargebacks911, the dispute technology platform, 68 per cent of those surveyed said that the pandemic has caused a growth in their chargeback rates.

The company said that rapidly rising e-commerce volumes had contributed to the threat of friendly fraud.

94 per cent of merchants said that they consider friendly fraud an issue for their business, while less than three in 10 merchants are taking steps to combat it.

“Merchants in every sector have faced unprecedented pressure over the past year, with shifting regulations, an uncertain economy, and the need to diversify sales strategies and channels,” said Monica Eaton-Cardone, chief operating officer and co-founder of Chargebacks911. “This has had a major impact on chargeback and friendly fraud rates.”

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