Chargeback and Friendly Fraud in the Jewelry Industry - Black Diamonds New York

Chargeback and Friendly Fraud in the Jewelry Industry

Friendly Fraud: The Growing Problem in Jewelry Industry

The jewelry industry is a lucrative target for fraudsters. Jewelry is a high-value item that is often purchased as a gift, making it difficult for the recipient to return or exchange it if they are unhappy with it. This makes it easy for fraudsters to file chargebacks on jewelry purchases, claiming that they never received the item or that it was not as described.

Chargebacks are a major problem for ecommerce businesses. In 2022, the average ecommerce business lost $17 for every $1,000 in sales due to chargebacks. One of the most common types of chargebacks is friendly fraud.

Friendly fraud is when a customer makes a purchase with a credit card and then disputes the charge with their bank, even though they received the product or service they ordered. This type of fraud is called "friendly" because the customer is not actually stealing anything. They are simply taking advantage of the chargeback system to get a refund for something they no longer want.

There are a number of reasons why customers might commit friendly fraud. Some customers do it because they are simply trying to get something for free. Others do it because they are unhappy with the product or service they received. And still others do it because they think they can get away with it.

Whatever the reason, friendly fraud is a serious problem for ecommerce businesses. It can cost businesses a lot of money in lost sales and fees. In some cases, it can even lead to the closure of a business.

Why is Friendly Fraud Considered a Crime and a Felony?

Friendly fraud is considered a crime because it is a form of theft. When a customer commits friendly fraud, they are essentially stealing money from the ecommerce business. This is because the business has already paid for the product or service, and the customer is simply taking it without paying for it.

In some cases, friendly fraud can also be considered a felony. This is because it can involve a significant amount of money. For example, if a customer commits friendly fraud on a $1,000 purchase, they could be charged with a felony.

How to Prevent Friendly Fraud

We consulted with the legal team of Black Diamonds- New York, a premier jewelry store in downtown Manhattan. Their gothic rings for example are all over the internet, many brides and shoppers worldwide shop their one-of-a-kind collections of affordable engagement and wedding rings. It is evident that their unique wedding rings are trending online because of their quality and affordability.  They are also aware that every purchase can be at risk with friendly fraud so they have a great system how to prevent them. Some of these things include:

  1. Require customers to create an account before they can make a purchase. This will make it more difficult for customers to commit friendly fraud, as they will need to provide their personal information, such as their name and address.
  2. Use fraud prevention tools. There are a number of fraud prevention tools available that can help businesses to identify and prevent fraudulent transactions.
  3. Have a clear and concise refund policy. Customers should be aware of the business's refund policy before they make a purchase. This will help to reduce the number of customers who try to commit friendly fraud by claiming that they never received their product or service.
  4. Respond to customer complaints promptly. If a customer does complain about a product or service, the business should respond promptly and try to resolve the issue. This will help to reduce the number of customers who try to commit friendly fraud by claiming that they never received their product or service.

By taking these steps, ecommerce businesses can help to prevent friendly fraud and protect their bottom line.


For customers who are unhappy with their orders, contact the store directly and ask for help. Refrain from filing a chargeback if the issue can be resolved directly with the merchant. Keep in mind that it takes at least 70 days for your bank and the merchant to come up with the final conclusion about who will win the case. Chargeback cases go through investigations to check the legitimacy of every claim. Do not commit fraud. If you want the product but cannot afford it, don't buy it. It's that simple! Or maybe you'll be in luck and come across merchants like Black Diamonds- New York which has a 'Free Ring For Your Wedding' program where they ship free rings for those who can't afford one. Merchant like them appreciates honesty- rumor has it that if you ask them nicely, they'll even give you their product for free- a refund without returning the item. How awesome is that? No wonder they are known in the industry for their generosity. 

Written by: Tim Bard
Bard Fraud Prevention
Researched by: Janice Pollack


1 comment

I agree! So many frauds out there and it’s ridiculous how people can be! On a side note, Black Diamonds- New York has the best customer service and their jewelry are nothing but unique and high quality! They make the most unique wedding rings and I am in love every time I look at mine! I admire how friendly and professional they are. They make shopping online and in their store in New York so much fun and easy! It’s rare to find a store that actually cares about you and not just your money. Back in 2021, my fiance and I purchased our wedding rings with them. Fast forward to today, my husband purchased my anniversary ring with them. I was so happy to receive a ‘hello’ note and a thoughtful gift from the company with my second purchase. My husband and I feel like a very valued customer! We didn’t expect they will remember us 2 years later. Thank you for the great experience!

Ben and Janice Stanton July 17, 2023

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