Why Friendly Fraud Is on the Rise at Full-Service Restaurants

It’s been nearly five years since the coalition comprised of Europay, MasterCard and VISA (EMVCo) shifted the liability for payment fraud from the banks to the merchant.  In that time, chip cards have become ubiquitous. Payments made using a swipe have officially jumped the shark, and the face of fraud has become friendly.

“Friendly fraud” as it’s called, occurs when a cardholder disputes legitimate charges with their credit card provider, forcing a refund under the false pretense that the merchant made an error.  This happens when merchants are ill- equipped to accept EMV payments – meaning, they don’t use a chip-enabled card reader during the payment transaction.  If a restaurant guest, for example, argues the charges in the absence of a chip card reader, banks will reverse the transaction with no recourse by the restaurant operator.

Restaurants owe it to their guests and themselves to protect against friendly fraud.

This was once considered an issue only for…