A dispute is the result of a customer contacting their bank or credit card company about a charge to their debit or credit card account that they are contesting. The dispute and its related information is then made available to the merchant, who will have the option to represent the charge and win the case. This process is known as dispute resolution. If the merchant is unable to represent the charge, the card issuer will typically rescind the sale and add fees on top of it. This process is called a chargeback.

So, how is fraud related to this?

Here are some of the reasons that a customer might use to open a dispute case with their card issuer:

  • Duplicate orders
  • Incorrect charge amount
  • Service(s) not provided
  • Product(s) not as described or defective
  • Etc.

However, a common reason — when a customer makes a purchase, then claims they didn’t — is widely referred to as fraud, and can be classified as friendly or criminal.

Friendly Fraud

This is usually just buyer’s remorse or forgetfulness — maybe the customer decided they really didn’t need that subscription, or simply forgot they signed up. Regardless, it’s not organized, and not always intended maliciously. A customer simply wants their money back, and they’ve taken measures with their bank to get it.

Criminal Fraud

The intention behind criminal fraud is the opposite of friendly. Someone wants to get something for free, or are after your money, and they are pursuing it in very creative, underhanded ways.

What Rebilly Can Do

We’ve identified that chargebacks come mostly from two types of fraud and that a dispute does not always result in a chargeback if addressed properly. The Rebilly app has some tools at your disposal to help you deal with this reality:

  • Risk scoring - to spot potential fraud before it happens.
  • Managing blacklists and greylists - to stop known offenders from generating disputes.
  • Recording disputes - to manage your chargeback ratios and dispute handling.
  • Automating the dispute process - to save you time and human errors.
  • Managing evidence - to help you win disputes.

Explore these articles to learn more about how to use Rebilly to help with disputes and fraud, or chat with us directly.

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