What is double dipping and are you a victim?

Jennifer Blake Posted on December 16, 2020

Chargebacks are a big enough issue for merchants, but when customers pursue multiple repayment options, it can end up causing unintentional harm to merchants.

What is double-dipping 

Double dipping occurs when a customer is seeking a refund while requesting a chargeback. Sometimes both get processed, costing the merchant not only two refunds but also the chargeback cost and any delivery lost.

For the consumer, this can seem like a savvy approach for getting your money back. Whether the claim is intentional fraud or just because one approach will always be quicker than the other, the client is not necessarily aware of the harm it causes to merchants.

What can/is being done about it

ABTA has brought double-dipping to the attention of Paul Scully, the Minister for Small Business, Consumers, and Labour Markets. The industry body is seeking an urgent meeting with the UK's finance representatives and government officials. ABTA wants the government to address doubling dipping and chargebacks, which is greatly affecting SMEs.

Further issues to be added to the agenda include chargeback claims where notifications are late and sometimes only arrive after the appeal deadline. The situation has been exasperated by huge volumes of COVID-related claims from the travel industry.

ABTA believes that the dispute resolution system is failing. Banks and payment merchants conduct insufficient checks and do not scrutinise payment disputes to ensure claims are justified.

Intentional friendly fraud

Consumer shopping behaviours have significantly changed during 2020, and merchants need to be prepared. What has and is happening in the travel industry shows signs of occurring in retail, as the holiday season and gift buying enter full swing.

In a survey conducted by Signifyd, a large portion of respondents admitted to making false claims to obtain full refunds or a discounted price on items they have kept.

36% of those surveyed in the UK said they had made a false chargeback claim, stating that the order never arrived or the product was not satisfactory. Also, 32% of respondents said they had broken promotion and discount rules to receive a price reduction they weren't eligible for.

Furthermore, 36% of those surveyed in the UK admitted to making a refund claim because the charge was fraudulent, even when they knew it was not.

With COVID consumer shopping habits here to stay, online is on a boom, and merchants need the government to reassess friendly fraud and double-dipping rules.

In the meantime

Chargeback management software from Payment Help interrupts user behaviour at the exact point in time where a chargeback or refund would be requested, reducing repayment costs for merchants. 

They do this by allowing consumers to identify and verify purchases they have made but either do not recognise or have forgotten about them, interrupting them at the exact point where a chargeback or refund would be requested. 

Our software can also be integrated with a variety of business management systems such as EPOS systems, CMS's, ERP systems & PSP's. Contact Payment Help today to learn more about the benefits of becoming a partner.