Fraudulent Chargebacks Could Be Growing Problem in Travel

Travelers are falling victim to fraudulent chargebacks, often when they make legitimate purchases. With the help of blockchain technology, this issue could be eradicated in the near future.

The travel industry, which is only starting to recover as the epidemic fades, might be harmed by false chargebacks.

According to a recent analysis by Chargebacks911, a firm that specializes on chargeback risk mitigation and fraud elimination, a chargeback reversal rate of only 10% may drive travel merchants out of business.


“The whole business is painfully aware of the strain it has been under for the last two years,” says one executive “Airline Information co-founder Christopher Staab said. “However, there are obvious and positive signals that the industry will see not just a return to normalcy, but a rush of customers eager to travel the globe once again. This is why we applaud Chargebacks911’s findings and advise airline and travel merchants to continue to be proactive and cautious in their efforts to prevent fraud and chargebacks.”

Chargebacks911 and Airline Information both said that awareness is essential in the fight against fraud, particularly at this time.

“The tourism sector has taken the brunt of the pandemic’s economic toll,” said Monica Eaton-Cardone, COO and co-founder of Chargebacks911. It continues to lose money; refunds are being demanded in droves, and the growing number of chargebacks threatens the survival of numerous travel companies throughout the globe. After COVID-19, there was a noticeable structural shift in chargebacks. Chargeback activity will follow suit as travel returns to a new normal. We’re witnessing an increase in chargebacks connected to travel, which might signal the start of another cycle of ‘dispute contagion,’ which is a clear evidence of changing behavior patterns. This is a concern that merchants cannot afford to ignore.”

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Many merchants in the sector want chargebacks to be more regulated. To assist detect growing fraud and chargeback tactics, 62% of respondents desire more industry cooperation, including integrated technological solutions and data exchange. Due to a lack of resources and knowledge, only a small percentage of merchants were able to properly detect friendly fraud, according to the report.

“The absence of resistance against friendly fraud is one of the causes for the rising number of chargebacks,” says one expert “Eaton-Cardone said. “Most business owners don’t know that if they let it go, they’re admitting fault–and indirectly promoting bad conduct.

Eaton-Cardone further cautioned that individuals who get away with the deception are likely to repeat it.

We’re seeing a lot of highly inventive ways to commit fraud and chargebacks. Merchants must have their wits about them. “It all boils down to getting to know your consumer and having more data to be able to spot suspicious behavioral patterns,” she said.

Another issue travel merchants should be aware of is “double-dipping.” This happens when a client requests a refund from both the firm and the credit card provider.

According to Chargebacks911, 60 percent of responders have seen a surge in double refund rates since the epidemic started.

Companies like Chargebacks911, as well as technology, may assist.

“Any retailer should concentrate on their core skills, such as enhancing the customer experience and providing excellent customer service,” Eaton-Cardone added. “I’d want to urge merchants to think about how they might make better judgments and identify the tools that can help them do so.” Everyone benefits in this manner.”