What is the MOST effective method for preventing 'friendly fraud' chargebacks when selling digital goods?

The most effective method for preventing 'friendly fraud' chargebacks when selling digital goods is to implement robust delivery verification and authentication measures. 'Friendly fraud' occurs when a customer makes a purchase and then falsely claims they didn't authorize the transaction or didn't receive the goods. For digital goods, delivery verification means ensuring that you have proof the customer accessed or downloaded the product. This can involve requiring customers to create an account, log in to access the download, and tracking download activity with timestamps and IP addresses. Implement strong customer authentication measures, such as two-factor authentication (2FA) during the purchase process. Clearly communicate your refund policy and delivery process to customers before they make a purchase. If a chargeback occurs, promptly provide this evidence to PayPal to demonstrate that the customer received the digital good and authorized the transaction. By combining delivery verification, strong authentication, and clear communication, you can significantly reduce the incidence of friendly fraud chargebacks. This multi-layered approach provides strong evidence to dispute fraudulent claims and protect your revenue.