Friendly Fraud - Customers who are looking to keep the item and get their money back opt for chargebacks, stating that the product never arrived or that the product is faulty.It’s easy to abuse it - Due to banks operating under the assumption that the customer is always right, the chargeback process is often misused since it is easier to request a chargeback than to request a refund.It’s outdated - Chargebacks were introduced before the internet era and the regulations do not address the possible threats adequately.It’s subjective - Since the process and the outcome are determined by human beings, chargebacks are prone to judgments that are often subjective.The failure of the chargeback systems is that it did not evolve with the coming of the internet, making the system exploitable. Flaws of the Chargeback ProcessĬhargebacks were introduced back in the 1970s to protect the customers from shady merchants. Merchants can take customers who abuse chargebacks to court, and most jurisdictions will pursue criminal charges against those customers. Fraudulent chargebacks are seen as a form of fraud and have landed some unethical buyers in jail.
Chargebacks were introduced to protect buyers from shady merchants who would abuse their personal and financial information.
