What is friendly fraud?

Friendly fraud occurs when a customer pays with a valid card, but then claims their order never arrived, that it was damaged, or that it was substantially different from the product description on the website.

Most often friendly fraud is unintentional and can happen for a number of reasons:

  • The customer forgets they made the purchase
  • Another family member authorizes the purchase
  • The customer forgets they agreed to recurring billing
  • The customer misunderstands the merchant’s return policy

While this type of fraud may be considered “innocent,” it’s still costly. Friendly fraud accounted for 29% of U.S. ecommerce losses in 2021.

Preventing friendly fraud

Ecommerce companies can’t necessarily change consumer behavior, but they can take action to prevent friendly fraud with clearer information on their websites and follow up communication. Here are some ways to do that:

  • Include as much detail as possible in product descriptions
  • Opt for high resolution product photos , multiple angles, and consider 3D options
  • Overcommunicate shipping details and make sure to manage expectations about timelines
  • Consider packaging choices for long shipments and seasonal deliveries in inclement weather
  • Offer customers real-time package tracking
  • Include historical friendly fraud trends in your fraud analysis algorithm

Related Topics

Ecommerce Fraud Basics

Chargeback Management

Related Resources

Friendly Fraud vs. Chargeback Fraud: Can You Tell the Difference?

Friendly Fraud: What Ecommerce Merchants Need to Know

Why Friendly Fraud May Be a Problem for Your Fraud Protection Solution

5 Types of Ecommerce Fraud Schemes You Should Know About

ECommerce Fraud Protection for Online Merchants: The Ultimate Guide