Friendly fraud is a pricing problem
Every dispute channel has a price.
Returning a sweater costs a trip to the store, a box, a label, a week of waiting. Disputing the charge costs four taps in a banking app and a provisional credit by morning. Most customers will tell you they prefer the honest path. What they actually prefer is the cheap path — and when the bank's channel is cheaper than the merchant's, even honest customers route through the bank.
This is the uncomfortable core of friendly fraud: it is not primarily a detection problem. It is a pricing problem. The dispute exists because two resolution channels compete on cost, and the one designed as a last resort won on convenience.
Banks built chargebacks as consumer protection — a credible threat that keeps merchants honest. But a protection that costs the consumer nothing gets used for everything: buyer's remorse, forgotten subscriptions, a package that arrived a day late. Each individual dispute is small and plausibly legitimate. In aggregate, it is a multi-billion-dollar tax on selling online, paid by every merchant and ultimately every customer.
The industry's response has been to get better at telling guilty from innocent — device fingerprints, behavioral models, representment evidence. That work matters, but it treats the symptom. As long as disputing is the cheapest way to resolve dissatisfaction, demand for disputes will keep growing to fill the channel. Detection raises the cost of the obvious cases; the marginal ones just get more careful.
The durable fix is to reprice the channels. Make the legitimate path the cheapest one: instant refunds for low-risk claims, one-tap returns, proactive credits before the customer thinks to call the bank. And put a real price on the dispute channel: friction, consequences for patterns, and data shared back so serial disputers face the same merchant everywhere.
None of this requires believing customers are bad. It requires believing they are rational. Price the honest path below the dishonest one and most people take it. That has always been the whole game.