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Chargeback Fraud Prevention

The better we get at preventing fraud the harder fraudsters try to take our hard earned money. The new term you will start hearing about is “friendly fraud”. The short explanation of this is a customer orders product via the internet. The customer takes delivery. The final step the customer reverses the charges claiming they never received the product when in reality they have. I know you are thinking that is impossible and no one does this let alone gets away with this. Well I am here to tell the have can and will continue to get away with this nonsense if retailers don’t protect themselves and fight the good fight.
So what can you do to cut down on and hopeful stop “friendly fraud”?
First thing is having a clear and concise 30 day return policy and make sure your customers know about it. This makes them more likely to contact you rather than the credit card company when disputing a charge. When having only a couple day return policy consumer fraud tends to be much higher. Plus having a clearly written policy may deter a fraudster as it will give you more of a “we have our act together” type business. Keep in mind fraudsters, like any crook, will pick the easier mark or the path of least resistance.
Second make sure you send a delivery confirmation –email after an item arrives at the customers home or business. This is simple a paper trail that may come in handy down the road should the customer dispute the fact that they received the product.
Third if it is a recurring sale or membership perhaps, makes sure it is very easy for customers to end or opt-out. If they can’t and they call the bank and complain about the charges most times the bank will side with the consumer leaving you with another reversed charge.
These are just a few tips for things you can do to protect yourself. Another resource or service to help prevent chargeback’s is For a monthly fee they will manage chargeback’s and have an excellent record of reducing them. As always feel free to call the team here if you have any questions. 1-800-699-0820 ext 2

eCommerce Fraud: Preparation and Prevention

Fraud is common in retail, regardless of the interface used, but when it comes to the world of e-commerce, there is a greater risk of fraud for three main reasons.

First, and most important, is the fact that you are not handling the payment method. Think about it – if you walked into a gas station with a piece of paper that had all of the right credit card information on it, they still wouldn’t accept that as payment. You would need the physical card in your hand to use it. It’s different in the e-commerce arena. There is no way to be 100% certain that you are dealing with a real person or if they are using real information.

Second, you are not in charge of your merchandise throughout the entire transaction. At the gas station, the cashier decides when it is ok for you to pump the gas, but when someone is shopping online, you ship the order out in good faith, trusting your preventative measures and hoping that you didn’t just ship it out at a loss to your business.

Lastly, there are several different types of fraud that can occur in an e-commerce marketplace. You have to watch out for counterfeit credit cards and gift cards, but also you have to make sure that you aren’t being taken advantage of by chargeback fraud. The internet is a vast space that allows criminals to take unprepared shop owners by surprise.

So how can you take the proper measures and secure your site to the best of your abilities? There are actually quite a few ways that are simple and effective when it comes to preventing e-commerce fraud and fraudulent activities. Make sure that you have a procedure that you follow every time you get an order and keep it consistent. You should be checking the shipping and billing addresses and security codes or CVV2 codes on all orders. If the shipping address and billing address are different, call the customer to verify the order. These are two steps that can go a long way in preventing fraud. You can also check the email that was given with the order to see if it is from a free email site. If an order is large compared to your average dollar sale, you should be calling or emailing that customer to verify the order and be sure it was correct.

In the end, it is better to have called and double checked an order than to be at a loss. No customer who has legitimately placed an order is going to be mad at you for calling. It shows that you are offering the best customer service possible, because your costs go up if you are constantly losing money to fraud.