Consumers Increasingly Seeking ‘Double Credits’ in Dispute Cases

Consumers Increasingly Seeking ‘Double Credits’ in Dispute Cases

May 13, 2021

The number of non-fraud dispute cases exploded in 2020 as a result of the Covid-19 pandemic and instances of consumers seeking “double credits” (getting a refund through a merchant and initiating a chargeback through a card issuer), rose up to 20 percent, according to new research from the Emerging Payments Association (EPA).

The U.K.-based trade association said non-fraud disputes rose 333 percent in 2020 compared to 2019—not surprising, particularly as travelers sought refunds for millions of canceled trips and as new services like online food ordering and delivery proliferated.

The report outlined several reasons for the troubling increase in this more pernicious and, to merchants, costly form of friendly fraud. Many online merchant verticals experienced a huge spike in transactions once global stay-at-home orders began appearing in March of 2020. More volume means more disputes and less time for merchants to address them.

“Delays and poor customer service by merchants in processing refunds can swiftly lead to many double refunds. Many customers can feel that they are being ignored or are not receiving their money back quickly enough,” the authors wrote in the report. “High customer frustration in these situations leads to a chargeback request being lodged before hearing a decision on a refund from the merchant. Between this and time pressures faced, it is clear that the overlap between refund and chargeback timelines is one of the primary causes of double refunds.”

The report makes several recommendations merchants can implement to address the problem including better communication between all involved parties, process improvements and clearer guidelines for paying refunds. For more details on the problem and the recommendations for improving a growing problem, download the free report here.

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