Mastercard’s Ethoca subsidiary predicts that by 2026, there could be 337 million chargebacks annually, an increase of 42% from 2023 levels. That’s a major problem for retailers and online merchants, one the credit card company is tackling through a new partnership with Salesforce.
Mastercard said its integration with Salesforce FSC (Financial Services Cloud) will help customers speed up the resolution of transaction disputes and reduce costs associated with resolving them. The integration with Mastercard’s dispute resolution services will provide a one-stop-shop for intake, managing disputes, reporting and preventing chargebacks.
“Technology is helping to speed up and improve the checkout experience, especially when shopping online,” Mastercard executive Johan Gerber said. “However, every disputed transaction can create stress for the consumer as well as resource pressures and increased costs for merchants and financial institutions.”
Another company that helps merchants deal with disputes, Chargebacks911, said chargebacks are a federally mandated consumer right designed to protect credit card users. “However, over the last 50 years, loopholes have allowed abuse of the system, leading to a rise in friendly fraud attacks,” it reported. It compiled a list to help merchants better understand the causes, costs, and consequences of chargebacks on its website, Chargebacks911.com.
The report cited data from Visa suggesting that 75% of all chargebacks are likely cases of friendly fraud, estimating that a third of consumers claim non-delivery or damaged merchandise as the reason when committing friendly fraud.
Almost every single chargeback I’ve received has fallen under one of two categories.
1) They claimed they purchased the item but there was an item on their credit card statement they didnt so the bank did a ‘blanket’ chargeback for all transactions around the same time.
2) They have openly admitted that it was a partner/cousin/child that made the purchase. Or that they have the item there but never purchased it (so apparently someone stole their credit card details and purchased something, and then sent it to the credit card address – how to fail at being a crook 101?).
The banks don’t seem to even investigate chargeback claims. They just pay the money back and then get the money reimbursed from the seller.
The whole thing has turned into a veiled ‘buyer remorse’ refund.
If the banks bothered to actually properly assess the claim – ebay messages stating “yes that was my daughter” – surely that is a family matter, not a bank matter?! And charged those that put in fraudulent claims, then there would be a lot less of them…. you would think.