Growth is supposed to strengthen e-commerce businesses. More orders. More repeat customers. More revenue to reinvest. 

But growth also widens the gap between what merchants can see and what can hurt them. 

As order volume rises, so do delivery exceptions, claims, disputes, and chargebacks. A lost package is no longer a one-off service issue. A chargeback is no longer just a cost of doing business. Together, they can quietly erode margin, burden operations, and weaken the customer experience that made growth possible in the first place. 

That is the hidden cost of growth: not demand itself, but the post-purchase risk that comes with it. 

One growing apparel brand, Buru, experienced this firsthand. As the company expanded across DTC ecommerce, retail stores, pop-ups, and wholesale channels, post-purchase issues stopped being a narrow customer-support problem and became a broader operational challenge affecting margin, team workload, and customer recovery speed. 

What is friendly fraud, and why does it increase as you grow? 

Friendly fraud happens when a customer disputes a legitimate charge with their bank or card issuer. Sometimes it is intentional. Sometimes it is confusing. Either way, the merchant absorbs the damage. 

The problem worsens as a business scales because each new order adds exposure. More shipments mean more chances for delays, delivery confusion, package-loss claims, and disputes filed after a product arrives. And as teams get busier, it becomes harder to spot risky patterns early or respond fast enough to prevent losses from piling up. 

For growing merchants, friendly fraud is rarely a single dramatic event. It is death by a thousand cuts: lost revenue, dispute fees, manual review time, and unnecessary strain on support and finance teams. 

In Buru’s case, the team estimated it had previously lost roughly 75% of its chargeback disputes — a stark reminder that post-purchase risk can quietly eat away at margin if it isn’t managed deliberately. 

Why are chargebacks more expensive than they look? 

Most operators think of chargebacks as reversed payments. That is too narrow. 

The true cost includes the order value, processor fees, operational labor, and the downstream friction created when teams have to stop what they are doing to investigate. In some cases, funds are pulled , leaving the merchant to prove what happened after the fact. 

That puts pressure on margins fast. But it also creates a second problem: overcorrection. 

When merchants cannot clearly tell which orders are truly risky, they often slow fulfillment, hold orders, or apply blunt fraud rules that frustrate legitimate customers. That protects against some losses, but it can also hurt conversion, retention, and lifetime value. 

In other words, poor visibility does not just increase the risk of fraud. It can make sustaining healthy growth harder. 

For example, Buru found that its previous claims workflow could absorb 20–25 minutes of manual work per claim and stretch across multiple handoffs over several days — operational friction that scaled with order volume. 

Why is shipping insurance only part of the answer? 

Shipping insurance matters because post-purchase problems start before a dispute ever reaches the bank. 

Packages get lost. Items arrive damaged. Deliveries go missing in transit or after drop-off. When that happens, merchants need a fast, reliable way to make the customer whole without turning every exception into a margin-killing fire drill. 

That is where shipping insurance earns its keep. It helps merchants resolve problems quickly, replace inventory with confidence, and protect the brand experience when something goes wrong. 

But shipping insurance alone does not solve friendly fraud. 

A merchant can recover from a shipment loss but still lose money due to a chargeback after delivery. That is why growth-stage brands need both physical shipment protection and digital visibility into order risk. One protects the package. The other helps protect the transaction. 

When Buru improved visibility into its claims workflow, the team gained the ability to act faster during customer recovery. Claims that once took days to work through could be filed in minutes and were typically resolved within about 24 hours.  These results are from one merchant, Buru, and actual results may vary.

That speed matters operationally. According to Buru’s leadership, faster claims visibility means the team can act while the customer relationship is still recoverable rather than waiting for a slow process to finish. 

How does order visibility help prevent friendly fraud without slowing growth? 

The best fraud strategy is not to decline everything that looks unusual. It is to make better decisions with better context. 

Order visibility provides operators with stronger signals about the transaction, the delivery, and the customer record. Instead of treating every flagged order the same way, teams can assess risk more intelligently and choose the response that fits the business. 

That matters because not every suspicious-looking order is bad. A high-value order may come from a new but perfectly legitimate customer who could become highly valuable over time. Blanket friction can cost more than the risk itself. 

Improved operational visibility can also unlock smarter service recovery. In Buru’s case, roughly 20% of affected orders could be replaced once the team had faster claims confirmation — an option that was effectively unavailable under its previous workflow. 

What should merchants look for in a post-purchase protection strategy? 

Merchants need a strategy built for the real economics of growth. 

That means shipping insurance that supports fast claims and customer recovery. It means order-level visibility that helps teams identify and manage friendly fraud risk. And it means keeping merchants in control of the resolution process, rather than pushing critical decisions into a black box. 

The goal is not just loss prevention, but doing so with operational confidence. 

When merchants can see more clearly across shipping, delivery, and post-delivery disputes, they can protect margin without sacrificing customer experience. They can move faster, recover smarter, and make risk decisions that align with their own growth goals. 

As Buru’s experience illustrates, the real challenge is not just shipping the order successfully. It is maintaining visibility and control over what happens after the order leaves the warehouse. 

That is the real advantage.In retail, what happens after the sale is becoming a strategic advantage. NRF reported in 2025 that reverse logistics is now a strategic advantage for merchants. Moreover, McKinsey found that in 2026, modernizing returns can convert significant return-related costs into business value.

Statistics and performance figures cited in this article reflect the individual experience of the featured merchant and may not be representative of all customers. Individual results may vary. Claims processing data is based on information provided by the featured merchant. The chargeback statistics cited are derived from Mastercard and Datos.  
 
This article is based on an interview with Brett H., owner and co-founder of Buru, conducted by UPS Capital. Buru is a UPS Capital customer. The views expressed are the interviewee’s own and reflect Buru’s individual experience, which may not be representative of all customers.