Merchants Say Delivery Woes Increased Chargebacks in 2020

Merchants Say Delivery Woes Increased Chargebacks in 2020

August 26, 2021

Nearly 60 percent of online merchants say their chargeback rate has increased since March 2020 and the most common reason was delays in delivery, according to the results of a new study. Digital Payments in 2021: Opportunities and Chargeback Risks is a detailed look at chargeback trends and pre- and post-authorization payment risks undertaken by antifraud technology provider Kount.

In addition to the 45 percent of survey respondents who identified delivery delays, companies identified several reasons they think their chargebacks have increased during the course of the Covid-19 pandemic over and above fraud. Issues with customer service (43 percent), not enough staff (41 percent), merchant error (38 percent) and interrupted supply chain (29 percent) were all cited more often than fraud (26 percent for criminal fraud and 11 percent for friendly fraud) as the key driver of increased chargebacks.

"The report reveals an opportunity for businesses to elevate their fraud prevention to better protect from the growing risk of chargebacks and the fees associated with them," said Brad Wiskirchen, senior vice president and general manager of Kount, which was acquired by Equifax in January of this year. "By having the proper tools in place, businesses can save time and money and improve brand reputation while avoiding costly fraud monitoring programs."

Other key findings include:

  • 70 percent of companies have been in a fraud monitoring program in the last 12 months.
  • 15 percent of respondents say their companies don't use post-authorization chargeback tools.

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