Friendly fraud
what it is and how to fight it.

What friendly fraud looks like

Friendly fraud (also called first-party fraud or first-party misuse) is a chargeback filed by the person who actually made, or allowed, the purchase. It comes in several forms:

• Descriptor confusion. The customer doesn't recognize the charge on their statement and reports it as fraud.
• Household use. A partner or child used a saved card, and the cardholder didn't know.
• Forgotten renewals. A subscription renewed and the customer disputes it instead of cancelling.
• Buyer's remorse. The customer would rather dispute than return the item.
• Deliberate abuse. The customer received the goods and claims they didn't, or claims fraud to keep both the product and the money.

The dispute often arrives as a fraud claim (Visa 10.4, Mastercard 4837) or an item-not-received claim (Visa 13.1). Unlike true fraud, the evidence that the cardholder was involved usually exists in your own records.

Warning signs

• The customer has ordered before from the same device, IP or address without problems.
• Tracking shows delivery to the address on the order, and the customer contacted support about the item after delivery.
• The customer opened a refund or return request and then filed a chargeback on the same order.
• The account logged in or used the product after the disputed charge.
• The same shopper has chargebacks at other stores.

How to prevent it

1. Use a descriptor customers recognize, and send an itemized receipt.
2. Make support easy to find and reply quickly, so a question doesn't become a dispute.
3. Confirm shipment and delivery by email with tracking.
4. For subscriptions, send reminders before renewals and offer easy online cancellation.
5. Record customer messages, logins and device data so they're ready if you need them.

How to fight it

Answer with evidence that ties the cardholder to the purchase, matched to the reason code:

• Fraud claims on Visa (10.4). Under Visa Compelling Evidence 3.0, effective April 2023, a merchant can remedy a card-absent fraud dispute by showing two prior undisputed transactions from the same card, made 120 to 364 days before the dispute, with matching identifying data such as IP address, device or shipping address. Visa's FAQ notes it is not available for first-time buyers, and that it works for recurring transactions. See Compelling Evidence 3.0.
• Not-received claims. Carrier tracking with a delivered scan, a signature where available, and the customer's own messages after delivery. See item not received disputes.
• Refund-then-dispute. Show the refund already issued and the date. See refund abuse.

Visa's CE 3.0 FAQ also states that when a dispute is remedied this way, the associated fraud record is removed, so it doesn't count against you in Visa's fraud metrics. If the cardholder genuinely didn't make the purchase, accept the loss and tighten screening instead.

How Verdikx helps

Verdikx is a fraud, chargeback and dispute platform for e-commerce and SaaS merchants, built by Verdikx LLC (New Jersey, United States).

• Visa CE 3.0 in the packet. For Visa fraud disputes (10.4), the evidence packet lists prior undisputed transactions from the same customer when Verdikx has them.
• Contradiction finder (every plan). Looks for records that contradict the cardholder's claim, such as a delivery scan or a message about the item. You approve each finding before it goes in the packet.
• Customer conversations as evidence. Forwarded customer emails on every plan; Gorgias, Zendesk and other helpdesks in beta on Growth and Pro.
• Verdikx Network (Growth, opt-in). Once your store joins, flags shoppers with chargeback history reported by at least three other participating merchant accounts, before you ship.
• Block a customer. Blocking tags their orders in Shopify so you can act on them; Verdikx never edits the Shopify customer record.

Plans start at $29/month (Starter) with a 7-day free trial.

What Verdikx does not do

• It cannot prove intent or guarantee a win; issuers decide.
• It never invents evidence. Drafts cite the records they are based on.
• CE 3.0 depends on qualifying history Verdikx can see; it can't apply to first-time buyers.