Why Refund Abuse Has Skyrocketed

Why Refund Abuse Has Skyrocketed


eCommerce has boomed recently because of COVID-related lockdowns and social distancing. Restrictionshave made online retail orders grow by up to 200%.What about refund abuse? More than 50% of online merchants are witnessing a rise in refund abuse. This has to do with a growing number of customers benefiting from easy returns and extended refund periods. Are you suffering from refund abuse? Do you need help with a high risk merchant account? You’re at the right place.

Refund Abuse Is On the Rise: Why?

Refund abuse, which is also called return abuse, is a growing problem for merchants all over the world. It’s more critical than ever to be able to properly prevent the billion-dollar refund fraud problem, thus providing strong protection for your business.

When does refund abuse occur? Well, it happens when a customer uses your returns policy so much that the outcome becomes unprofitable. You can also find customers abusing refunds through fake returns/receipts, or by reselling merchandise.

In today’s increasingly digital world, you’re going to embrace more digital-related facts and realities. Customers aren’t going to stop their online purchases, which will result in an increased number of refund abuse cases.

In fact, now, 51% of merchants have reported a rise in refund abuse. 83% of shoppers state they won’t purchase goods/services from brands with return policies they don’t like.38% of merchants have witnessed a rise in friendly fraud, and more than ½ of merchants report growth in refund abuse.

Refund Abuse, Friendly Fraud, &High Risk Merchant Account

You might be interested in the difference between refund abuse and friendly fraud, might not you? The difference has to do with chargebacks. Friendly fraud is associated with chargebacks, which can’t be said about refund abuse.

Here are three types of refund abuse cases:

  • Customer entitlement to refunds with no concerns about the costs.
  • Customers thinking major brands have no problem bearing the costs, which isn’t true, especially now.
  • Customers knowing they can avoid prosecution.

With all this in mind, it’s more crucial than ever to use the right merchant processing services, including a high risk merchant account, for your eCommerce business. With a reputable payment processing company, you can successfully protect your transactions and avoid fraud.

Refund Abuse Growing Worldwide

eCommerce growth has resulted in a surge in almost all types of fraud. The situation has become worse after COVID-19 since the shift to the online space has accelerated. So, it’s no surprise that refund abuse has increased all over the world, with more customers trying to benefit from refund terms and conditions.

Author Bio:Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest-rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.