Friendly fraud costs retailers $11.8 billion according to Daily Finance. They also note that it poses a difficult battle for merchants since it can be intentional or accidental. The issue is compounded by the proliferation of identity theft and the subsequent protections banks have put in place to ensure consumer confidence: “With identity theft at an all-time high and banks eager to reassure consumers that their identity (and their money) is safe with friendly fraud protection guarantees, it’s become increasingly easy for cardholders to use these protections to commit fraud.”
If the correct precautions are not taken, fraudsters can order goods online, receive them by shipping service, claim they did not receive them, and initiate a chargeback, keeping both the goods and money. This costs merchants double. These sort of orders often have telltale signs of fraud that you can spot if you look for them.