Friendly Fraud and U.S. Cities with High Chargebacks

Fraud continues to plague the ecommerce industry.

Chargeback911 released a new study that reveals which U.S. cities had the highest rates of chargebacks for credit card disputes (see below).

Researchers analyzed records of 500,000 chargebacks and relative transactions for ecommerce purchases made in 2013 in order to illustrate the growing trend of transaction dispute chargebacks and their potential link to friendly fraud, noted company co-founder Monica Eaton-Cardone. 

Chargebacks (as retailers are likely all too familiar with) may be processed for a number of reasons, including identity theft, overcharges or failure to receive a promised product or service. However, Eaton-Cardone asserts that a growing number of chargebacks are due to a practice known as friendly fraud, in which consumers authorize a purchase and receive the goods or service but subsequently attempt to reverse the charge.

See the cities (and postal codes) for those U.S. cities with the highest chargebacks below:

+ 2.2% chargeback rate: Show Low, AZ 85901 
+ 1.7% chargeback rate: Port Washington, NY 11050 
+ 1.5% chargeback rate (3-way tie): San Jose, CA 95131; Astoria, NY 11105; and Miami, FL 33145 
+ 1.4% chargeback rate (2-way tie): Chicago, IL 60646 and Sherman Oaks, CA 91423 
+ 1.3% chargeback rate (9-way tie): Sarasota, FL 34234; Los Angeles, CA 90057; Woodland Hills, CA 91364; Orlando, FL 32836; Whittier, CA 90603; Alhambra, CA 91801; Plainview, NY 11803; North Hollywood, CA 91602; and Houston, TX 77067