The Loyalty360 Perspective
According to a recent Bloomberg report, more consumers are turning to "friendly fraud"—disputing legitimate credit card purchases through their bank rather than working directly with the merchant—to recover money from transactions they believe were misleading, frustrating, or difficult to resolve. While some disputes involve intentional abuse, many are driven by customer confusion, poor service experiences, or unclear billing practices.
A consistent theme from Loyalty360's Lunch & Learn sessions—including insights shared by Ryan Draude of Giant Food—and discussions throughout the 2026 Loyalty Expo is that some level of fraud and chargebacks is simply a cost of doing business. Leading brands recognize that attempting to eliminate every fraudulent transaction can introduce unnecessary friction that negatively impacts the customer experience.
The challenge is finding the right balance.
Organizations need effective fraud prevention, but they also need transparent communication, customer-friendly policies, and experiences that make it easy for customers to resolve issues before resorting to a dispute. The strongest loyalty organizations understand that protecting revenue and protecting customer trust are not competing priorities—they must be pursued together.
As Loyalty360's research continues to demonstrate, trust is becoming one of the most valuable drivers of customer loyalty. Brands that reduce uncertainty, communicate clearly, and remove unnecessary friction will be better positioned to strengthen relationships, increase advocacy, and deliver sustainable long-term growth.
Why It Matters to Customer Loyalty Leaders
1. Every customer interaction influences trust. Confusing billing descriptors, difficult returns, fulfillment issues, and poor service experiences can increase disputes and weaken customer confidence—even when no fraud has occurred.
2. Fraud prevention and customer experience must work together. Protecting the business shouldn't come at the expense of creating unnecessary friction for loyal customers.
3. Trust requires cross-functional alignment. Loyalty, customer service, payments, finance, digital, and operations all play a role in creating experiences that are both secure and customer-friendly.
Key Takeaways
1. Friendly fraud is often a symptom of broken customer experiences. Many disputes stem from frustration, confusion, or a lack of clear communication—not just malicious intent.
2. Transparency is a competitive advantage. Clear policies, recognizable billing, proactive communication, and responsive support help reduce disputes while strengthening customer trust.
3. The brands that earn trust will earn loyalty. Organizations that balance effective fraud prevention with frictionless customer experiences will be better positioned to increase retention, advocacy, and long-term customer value.