Credit card chargebacks are a common and unavoidable occurrence for any business that accepts credit cards, especially if you have a high-risk merchant account. When you think about the prevalence of fraud in today’s digital world, it is understandable how your customer service can still be excellent but not enough to keep customers from taking their money back out through this dispute process.
But what does research show?
Research shows that most merchants believe they will have some degree of chargeback disputes as they consider it just “part of doing business” with customers. This means we need a way to protect ourselves against these types of losses if we want our businesses to survive while satisfying all parties involved!
Every successful company needs excellent products or services—but only one aspect: providing outstanding customer feedback on those aspects won’t necessarily help fend off chargebacks. Unfortunately, some merchants make the silly mistake of focusing only on delivering a superb product or service. At the same time, others rely too heavily on customer satisfaction as the key to chargeback protection. Still, neither can really help your ecommerce business against this necessary reality of doing business with credit cards.
According to a 2018 study, four basis points of Visa’s $11 trillion in annual volume translated to an estimated loss of about $4.4 billion that year alone for the company and its cardholders alike . This doesn’t account for indirect losses like merchandise fees or other threats such as data breaches which are exponentially higher than just chargebacks themselves.
In the age of digital shopping, chargebacks have become an increasing problem for small businesses. It takes time and effort to recover from a successful fraudster’s attack on your business, but you can fight back through representation if need be. The best way to prevent fraudulent purchases in the first place is by implementing these 50 actionable steps outlined here – many are common sense. In contrast, others come from industry insiders who know what they’re talking about. Implementing any or all of them will deliver a significant impact sooner rather than later, so start where it’s easiest and work towards improving yourself as quickly as possible before this becomes too much trouble that someone else has to do for you (and then bill).
- Using the Tools available
- Address Verification Service
- Credit Card Security Codes
- Use 3D Secure
- Stay on alert
- Network Automated Response
- Order Insight
- Customer Service is key
- Make Sure Your Contact Information is Available
- Be Available
- Providing Instant Email Responses
- Monitor Social Media
- Follow up on Complaints
- Don’t Ignore Negative Reviews
- Take Down Any Fake Reviews
- Reevaluate Customer Service Hours
- Keep Communication Open With Customers
- Update Customers With Order Status
- Communicate Delays
- Communicate Shipping Information
- Follow up
- Review Your Policies and Procedures
- Tighten Up Your Shipping Policies
- Revisit Your Return and Cancellation Policies
- Eliminate Error
- Follow Best Practices
- Review your Processes
- Watch Out For Patterns
- Dispute Fraud
- Tighten Up Your Marketing Strategy
- Make Sure Your Product Descriptions Are Detailed
- Make Sure Your Listing Has Multiple Images
- Include Videos
- Make Sure Size Specifications Are Included
- Exclude Industry Jargon
- Pay Special Attention To Recurring Payments
- Always Be Transparent
- Utilize An Electronic “Sign Off”
- Make Cancelling Subscriptions Easy
- Complete Cancellations Quickly
- Notify Your Customers of Any Changes In Rates
- Remind Your Customers of Any Recurring Billing
- Be Vigilant When it Comes To Fraud
- Make Sure you’re Looking Out For Red Flags
- Investigate Any Questionable Orders
- Keep An Eye On Repeat Customers
- Make Sure you’re Blacklisting
- Create a Whitelist
- Utilize Velocity Checks
- Use 3rd Party Fraud Prevention
- Protect Your Business From Account Take Over
- Ensure Your Customer Data Is Secure
- Make Sure You Stay PCI Compliant
- Make Sure you’re Following Best Practices When It Comes to Data Storage
- Take Every Precaution
- Consider Tokenization
- End-To-End Encryption
- Friendly Fraud Does Happen
- Always Use Delivery Confirmation
- Make Sure Your Billing Descriptor Is Recognizable
- Keep An Eye On Any Suspicious Activity
- Monitor Any Digital Goods Sold
Using the Tools available
Fraud is an ever-changing and complex task that requires a dynamic, evolving approach to reducing risk. For chargebacks to be prevented successfully, there needs to be a variety of strategies in place. Therefore, it’s essential not only to use the tools at your disposal but also to make sure they are updated as technology changes so you can adapt accordingly with fraudsters who never sleep!
Address Verification Service
Address Verification Service helps reduce risk by automatically checking the billing address listed in the transaction against the address registered with AVS. If they do not match, you could be looking at a fraud situation. Therefore, always request shoppers provide both their billing and shipping addresses when purchasing anything online to cut down on potential problems before processing transactions!
Credit Card Security Codes
Card security codes are another way to ensure the shopper has physical possession of their card. These cards can’t be stored by either merchant or processor and must have a code re-entered every time they want to make a purchase so that it is always available on the card rather than somewhere else like in an account. This makes it much more unlikely for someone who does not have access to your information, such as how you use them, to complete transactions because they don’t know this personal detail about you! Always ask customers for these digits during checkout before proceeding with any payment processing since there’s no other way possible without physically having direct contact with the person themselves.
Use 3D Secure
3-D Secure Protocol (3DS) provides yet another level of fraud authentication by asking customers to enter a predetermined security code. Fraudsters would have no way of knowing the security code, so the transaction is stopped without the code. This protocol was introduced in 1999 and, while effective, did not work as well with newer technologies like mobile commerce leading to updated 3Ds2 that allows cardholders to validate their identity more easily across different devices for an even smoother payment process.
Each card network has its own branded 3DS2 payment product: Visa Secure, Mastercard Identity Check (this was formerly known as SecureCode), American Express SafeKey, Diners Club International/Discover ProtectBuy. J/Secure for JCB cardmembers is also available to protect your business against fraudsters and hackers when they try to steal information from your customers’ credit cards at checkout time. Your processor can help get you started or upgrade you to the latest version of this security feature called 3D Secured 2.0 that will keep pace with evolving threats better than ever before!
Stay on alert
Chargebacks can be prevented before they happen through the use of alerts. By receiving notice when a customer intends to file for chargeback, merchants can issue refunds and stop these disputes without any penalty fees or ratio consequences being incurred on their end. The Enriched Alerts from our solution will allow you to save time by not having an extra step in your process while also saving money because you’re avoiding costly penalties.
Network Automated Response
The automated response programs used by card networks can help clear up customer confusion and invalidate provable cases of chargeback fraud. For instance, if a credit cardholder does not recognize the transaction on their account but needs some more information to recall it, the bank may provide that data to remember what happened with the purchase. However, suppose this is unable or unsuccessful. In that case, an automated system will contact both parties involved -the purchaser’s issuing bank (i.e., your own) and the issuer. This is done to understand why there are conflicting reports of events between you two before determining whether or not there was fraudulent activity at play here.
Visa Order Insight is a plugin for the Visa Resolve Online platform that provides automated, real-time merchant transaction data between cardholders and participating merchants. The app collects information about purchases made with credit or debit cards at retail stores around the world and allows users to track those transactions in an easy-to-use dashboard.
Visa has recently launched two new updates:
- ‘Merchant Purchase Inquiry’ which automates payments within eCommerce sites
- ‘Order Insights,’ which tracks all of your purchase activity across multiple devices so you can easily keep tabs on how much money was spent without having to check each account individually manually.
Mastercard’s Eliminator has been a powerful and much-needed tool for MasterCard, providing the same service that Order Insight does for Visa. Similar to its counterpart, it connects bank agents with merchant purchase data to resolve inquiries without resorting to chargebacks.
The installation process can be daunting at times. Still, many experts will help you navigate this complex program while partnering with you during the implementation or operation of either (or both) programs.
Customer Service is key
Every good merchant knows that providing outstanding service is the best way to make customers happy. When it comes to preventing chargebacks, however, you may want to consider ramping up your customer service even more—before, during, and after the sale.
To proactively fight chargebacks, merchants need a multi-dimensional approach for communicating with their consumers so they can keep them satisfied before or at any point in time of purchase. The hard truth is contented customers usually don’t dispute charges when it happens, which means your line of defense against friendly fraud is keeping these people happy.
Make Sure Your Contact Information is Available
The ultimate goal of customer service is to make sure disgruntled customers talk to you instead of the bank. To do that, customers need easy access to your business’s contact information. They know this can be found on almost every page of your website. Be sure social media accounts are included as well, so no one feels left out when posting complaints if needed.
It’s hard to get in touch with many merchants these days. With a lot of contact information and phone numbers, it can be difficult for customers ever to reach someone on the other end – even if they want to! If your customer doesn’t call within three rings or less, you may never hear from them again. So make sure that when people do try contacting you, there is an answer waiting at all times, so no one hangs up out of frustration before getting anywhere.
Providing Instant Email Responses
With the rise of eCommerce, consumers have come to expect that they can get what they want as soon as possible. However, it is important not only for customers but also for businesses to provide these expectations in a timely manner if problems arise! For example, suppose you’re unhappy with your purchase or need assistance after having purchased something online and attempted contacting customer service via email from their website’s contact form. In that case, there should always be an automatic response sent back letting them know when someone will respond.
Monitor Social Media
Social media can be used for many purposes, but it is also an important communication channel and a great source of continuing information. So when someone reaches out to you via social media, make sure that you’re ready to respond as soon as possible—you should aim for within the hour if they contact your business on any platform.
Contrary to popular belief, responding quickly doesn’t mean being afraid or shying away from acknowledging criticisms; in fact, thanks are largely dependant on how well we address those grievances. Ensure that every single comment – whether praise or grievance- gets acknowledged by checking all accounts regularly.
Follow up on Complaints
No one wants to hear the words “I’m sorry!” But when your customers are unhappy, you must find out why. Do not assume they’ll tell someone else or try and work things out themselves. They may just need a simple solution from you! If there is anything more serious going on with their account, don’t be afraid to call them up for a quick chat about what happened – even if this means getting personal over the phone!
Don’t Ignore Negative Reviews
Consumers are more likely to trust online reviews as much as a personal recommendation, research shows. 84% of consumers believe that they have the same weighting on their decision-making process for products or services recommended by friends and family members versus those found on review sites (3). This is because it’s easier to identify with someone who has similar opinions than an unknown author. However, negative feedback can do severe damage if not monitored regularly. Make sure you check popular review sites like Yelp! Better Business Bureau reports, Facebook pages; even Google searches will show results of your company from all over the internet which may contain bad reviews – plus these might be complaints filed against other companies but still relevant enough since people use them to determine whether or not they want
Take Down Any Fake Reviews
If you’ve had a legitimate conflict with someone who posted what they thought was their honest opinion, there is nothing wrong in asking them to take it down. But as the creator of your product or service, don’t let false reviews stay on that could make potential customers think otherwise about your company and its products. Just because one person might have given bad feedback doesn’t mean all will feel like this, too- if anything, most people would prefer not to have any negative comments at all!
If you’ve had a legitimate conflict with someone who posted something they felt was an honest review but has now resolved itself (or vice versa), then ask them kindly to remove those posts from public view before posting again online – we know how much some people.
Reevaluate Customer Service Hours
Customer service in a card-not-present environment means expectations that differ from brick and mortar businesses. For example, online shoppers can place orders at any time, day or night; unfortunately, they often demand the same level of accessibility from your customer service department.
If you want to make sales 24 hours a day, seven days a week, then your customer service should also be open at all times. A recent study found that nearly 100% of surveyed consumers expected an answer within 48 hours, while 80% wanted their inquiries answered in less than 24 hours. Only 4% would accept answers from longer than two days which means if they don’t hear back soon enough, there’s no chance of convincing them and converting the sale.
Keep Communication Open With Customers
With all the different things that can go wrong, it’s important to be available for your customers and respond quickly with a solution. Imagine how frustrated you would feel if an order was never fulfilled or turned up late! Customers tend to understand when there are delays, but they don’t want their wait prolonged unnecessarily – so let them know what is going on as soon as possible.
Update Customers With Order Status
Today’s shoppers have become accustomed to having a high level of transparency regarding their order status. With 97% of customers expect and shops like Amazon, eBay, etc., it is no surprise that third-party fulfillment services would also include this capability with available apps or plugins providing visibility during each shipping stage.
To ensure a positive customer experience, businesses must take the time to stay in touch with their customers. To do so means sending updates, including shipping dates and estimated arrival times. This helps keep your customers informed about what’s going on with their orders while also providing reassurance that they’ll receive them when promised!
At the very least, you should send confirmation emails after every transaction and include an estimate of how long delivery will be taking place between receipt by the carrier (e.g., “The package left our warehouse today”). Continue emailing for any other point-of-contact information like being logged into inventory or leaving distribution centers until the shipment has been completed from end to end – this is important because not only does it provide.
When an item is not available or must be back-ordered and cannot ship immediately, it’s important to let the customer know as soon as possible. In this case, they should have the opportunity for a refund if desired instead of waiting around for delayed arrival. Of course, as long as all parts are in stock, there should never be any need to substitute without their agreement first. Only when part of a purchase is unavailable, offer them another consolation prize that can cover some aspects while still ensuring maximum satisfaction.
If an order doesn’t arrive on time, make sure that someone contacts both parties involved, so neither has worries about missing out on anything during negotiations.
Communicate Shipping Information
Shipping is one of the most important elements of an eCommerce customer’s experience, so you must keep your customers informed throughout the process. Send out an email when their order begins its journey and include all relevant information like tracking number or estimated delivery date. Update them with any changes in the process as they happen by updating feedback on their account about shipping status every time something has shifted from “en route” to a different location along the way!
Chargebacks will never be entirely avoided, but it is not a lost cause. One way to forestall chargeback disputes with buyers is by reaching out to the customer once you know that the shipment has been delivered and asking if there are any issues they have encountered. If so, try resolving these problems immediately before going through your return policy or providing your customer service department’s primary contact information.
The goal here is to reassure purchasers that you care about their business and will do anything to make sure everything goes smoothly- even after the sale! Hopefully, this reassurance of good faith on behalf of both parties will lead to customers feeling comfortable enough calling when an issue arises instead of automatically taking legal action against them.
Review Your Policies and Procedures
What are the most effective policies for your store? Do you know how to keep customers from asking for refunds later and stop chargebacks altogether? The key is being clear, concise, flexible. Your shipping policy should be communicated on your website so that buyers can see it before they make their purchase decision. To avoid confusion or disappointment when ordering a product online (or returning one), mention all costs upfront in plain language; don’t hide them halfway through an email message after delivery has already taken place. Be honest: inform shoppers of any hidden fees like duty charges right at checkout – do not wait until five days into transit! If there is ever anything unclear about what will happen with returns or cancellations – let people know now.
Tighten Up Your Shipping Policies
Your fulfillment and shipping policies must be as prominent and easily accessible on your website’s checkout page. For example, take a look at the following items:
- Openly state the timeframes for order processing.
- Provide a suggested drop date.
- Offer customers different shipping options with pricing information to make it more convenient for them.
- Include important cut-offs dates when an option is no longer available due to slowdowns in production or delivery delays from annual holidays.
Your company should prominently display what timeframe they expect orders to take after being placed so that potential clients can decide whether there will be enough lead time before their deadline arrives. Give special consideration if you have longer than industry standard expected times between placing an order and receiving shipment – like 48 hours instead of 24.
Revisit Your Return and Cancellation Policies
Deliver your return policy in clear, simple language. Avoid negative phrases and focus on what you will do for the customer: how long they have to make a decision; options of returns (store credit, money back); reimbursement policies – when customers are reimbursed or their purchase is repaired/replaced).
Many people are frustrated when they return an item, only to be told that there is nothing the store can do. If you want to keep your customers satisfied and come back more time and again, it’s important not to give them a hard time during their returns process. You need something in place that lets those who have been wronged know how things work before making any purchase with your company not to regret what happens later on down the line.
Suppose items cannot be returned or exchanged due to quality concerns. In that case, this information needs to be conspicuously posted along with links explaining why these products were exempt from our standard policy of refunding purchases within 30 days after receipt by the customer (if such conditions exist). This way, potential buyers will know.
No one wants to believe that they could be causing part of their own problem, but the sad truth is that this isn’t always true. 40% of chargebacks can be attributed to merchant error which may seem surprising at first glance. Merchants are often surprised when we tell them about these numbers as it goes against everything they’ve been told in school and from other merchants who have never experienced a high number like this before themselves – though now with help you’ll know what mistakes need remedying!
Follow Best Practices
One of the best ways to reduce risk is by ensuring your policies and procedures align with proven best practices for accepting payment cards in card-not-present situations. The following tips are designed to help you minimize chargebacks caused by merchant errors:
The first step is understanding what exactly constitutes a “merchant error,” as different businesses may define this term differently; you need to identify whether an account has experienced any problems that could classify it under these terms (e.g., no order or shipping information on file). If so, double-check their records immediately because many merchants will cancel orders without checking them before letting them know they have withdrawn. In contrast, others will automatically issue refunds upon cancellation even though those funds should.
Review your Processes
Self-examination is one of the most challenging yet crucial actions merchants must take to eliminate internal errors that trigger chargebacks. An exhaustive evaluation will identify policies and practices within your business that create friction among customers who may not be satisfied with their purchases. Despite this being an arduous task for any passionate entrepreneur, it poses the only way to solve problems quickly. Furthermore, this process will allow you to provide accurate information about what went wrong so changes can be made accordingly before more damaging mistakes happen again down the road.
The merchant is the last line of defense against chargebacks. Unfortunately, this can be frustrating, as merchants often don’t fully understand their own processes or know what to look for to identify potential problem areas from the start. For example, companies that have been around longer and more experienced with their procedures may not explore an area thoroughly if they believe it’s safe enough because familiarity breeds complacency and saves time on top of fulfilling orders.
Watch Out For Patterns
Historical data can be instrumental in locating unnoticed merchant errors. It’s a good practice to regularly audit customer service logs and listen for patterns or recurring complaints that would identify operational missteps. Still, merchants will need to build up their own system of order history and transaction information as well as an error-monitoring system. This is another area where it’s wise to consider employing a reputable third-party provider with experience with this type of work already under their belt.
This may seem counterintuitive: how does fighting existing fraud prevent chargebacks in the future? But, instead, it has to do with reputation and how banks view you.
In most customer disputes, the bank will initially side with cardholders. Fair or not, merchants are usually considered “guilty until proven innocent.” Not contesting a chargeback can easily be interpreted as an admission of guilt, making it easier for banks to perform less due diligence each time.
However, when you dispute every illegitimate chargeback through the representation process (or any other appropriate means), you send a different message that your company is committed to upholding their customers’ rights while keeping legitimate charges on file so they won’t have issues down the line.
Tighten Up Your Marketing Strategy
Customers’ decisions are typically heavily influenced by whatever information the merchant supplies when making a purchase online. It’s up to you as the merchant to provide accurate details and specifications for products and services they sell if your product description content doesn’t incentivize them into buying. There’s not much point in having any at all because, without incentive, people would be more likely just browsing through goods that have been reviewed or recommended by other buyers. Suppose your information is insufficient, misleading, or just plain wrong. In that case, this could lead to unsatisfied customers who will most probably end up with chargebacks which can hurt both parties involved in such transaction since money has already exchanged hands. Still, no good was received on either end of the bargain so instead, make sure everything is upfront.
Make Sure Your Product Descriptions Are Detailed
Ensure that your product descriptions are always accurate and factual, anticipating any questions the customer may have before they arise. An appropriate word count is between 350-400 words; however, complicated products might need more than what this average length can provide. Keeping the word count at 600 or less will ensure a better chance for success in selling whatever you’re providing to customers.
Make Sure Your Listing Has Multiple Images
To prevent “item not as described” chargebacks, provide multiple pictures of your product from different angles and close-ups. Many manufacturers include various shots in their marketing materials to make it easy for consumers to know what they’re buying before they purchase the item online. If you take product photos yourself, use good lighting so that detail is clearly shown in the color and construction of each piece you sell.
A video is an important tool for marketing products online. Shoppers who view a video are 1.8 times more likely to purchase than non-viewers, and buyers of videos made fewer returns as well! Videos should highlight the most pertinent features and, if possible, demonstrate the product in action; don’t get too carried away, though, because large files can slow down your site.
Make Sure Size Specifications Are Included
It’s hard to tell the size of something by just looking at it on a blank background. This is especially true for items like jewelry which may require extreme close-up shots that illuminate details but can misrepresent how large they are in reality. Luckily, adding photos with measurements helps customers understand exactly what will fit and where things fall off their shoulders or earlobes, etc.
Exclude Industry Jargon
The importance of marketing is evident, but be careful not to get carried away with industry catchphrases and jargon. Two chargeback reason codes you’ll want to avoid are “not as described” or “services not rendered.” Your customers must see the item in a realistic light from their first encounter with it, so use down-to-earth descriptions instead of vague slogans.
Pay Special Attention To Recurring Payments
A recurring payments business model offers many benefits for both merchants and customers. On the merchant side, it creates a more predictable cash flow which improves payment timeliness, reduces processing costs, and lowers the risk of error by avoiding manual data entry or credit card swipe errors at checkout. Customers enjoy greater affordability and the convenience of automatic billing that saves time while reducing problems associated with forgetting to pay bills like cable services or utility bills on their due date. The use of this kinder type of transaction also presents its own set of risks. Still, we can reduce these dangers if we take precautions such as disclosing information like expiration dates in our communications to consumers so they know what is expected from them should they wish to cancel service before renewal deadlines arrive.
Always Be Transparent
You know the feeling of checking your credit card statement and seeing an unexpected charge. It can be a frustrating situation for both you and the customer! To avoid any surprises while looking at your statement, it’s best to take care in setting up customers on recurring billing plans from day 1 – because there are so many potential pitfalls along with all their benefits. For example, let’s say that monthly charges change based on what type or amount plan is chosen at sign-up time (e.g., if they opt into one tier instead of another). If you decide not to tell them about these changes when taking payment information upfront, you head down the wrong path. In addition, customers may notice later down the line due to fluctuations in price between two tiers in a case where no explanation was given as to why those prices differ.
Utilize An Electronic “Sign Off”
Even when you have a clear, concise list of expectations for your readers to follow, there will be some who do not read the fine print. These customers must be made aware of their obligations upfront and with zero ambiguity by posting them in a prominent area such as near checkout or on the first page after signing into your site. In addition, require subscribers to check off agreements before proceeding so they know what they’re getting themselves into while also knowing where all those recurring payments go.
Make Cancelling Subscriptions Easy
You may not realize it, but churn is a crucial issue to tackle in any company. The cost of acquiring new customers can be daunting, and those costs rise exponentially when existing customers leave the fold (putting you behind on revenue). Most companies have complex cancellation procedures, which only lead to more chargebacks due to increased customer attrition rates. A flexible policy with no strings attached to contracts is essential for retention.
Complete Cancellations Quickly
When a customer asks to discontinue service, be sure to take the request seriously. Send an email or text as soon as possible and let them know that their wishes will come into effect immediately upon receipt of the communication. If it is too late in the billing cycle for cancellation, but you still want your services discontinued before next month’s bill arrives, contact us to ensure this process goes smoothly.
Notify Your Customers of Any Changes In Rates
If there will be a change in the payment rate, give your customer ample warning. If they do not wish to continue with the plan due to this price increase, make sure you cancel it soon after so that any charges incurred would still count towards their subscription time before cancellation takes place.
Remind Your Customers of Any Recurring Billing
If you’re like most people, it’s easy to forget about a subscription service. Especially one that bills quarterly or annually! Sending out reminder emails before processing charges is an excellent way of ensuring subscribers don’t miss their next payment deadline and get charged for additional months. Set your reminders close to the renewal date but far enough out, so they still have time to cancel if needed.
Be Vigilant When it Comes To Fraud
Card-not-present fraud is the most common type of credit card fraud. As opposed to physically scanning a piece of plastic and entering digits from that into an online checkout page, this form of payment acquisition requires more effort on the part of criminals who are constantly looking for ways to do it faster or sneakier than before. Therefore, if you feel something might be off with your order’s legitimacy, even if you’re not sure what exactly triggers this feeling, then there should always be ample time spent checking over everything thoroughly before submitting all information. If you don’t do this, you risk being taken advantage of by unscrupulous individuals searching for easy profits at your expense. There are several chargeback laws for high-risk merchants that you should reference as well.
Make Sure you’re Looking Out For Red Flags
Fraud doesn’t announce itself, but there are slight hints that could give it away. Here are five potential fraud red flags8 to watch out for:
- The customer is a repeat purchaser who has made many purchases and had no issues with prior payments or deliveries.
- A fake shipping address was used when making an online purchase.
- There were multiple changes of contact information—address, phone number–in one transaction.
- Someone attempted to change your billing amount from $100 per month to 1 million dollars without permission. This excessive overpayment might be considered fraudulent if you have not agreed to such terms before giving them access to your account.
Investigate Any Questionable Orders
If you find yourself questioning a customer’s order, it is important to validate the information by getting in touch with one of their representatives. In some cases, this may be done via email, and if so, providing specific details about your concern will help speed up the resolution time. If asking for additional information or calling them directly does not resolve the issue, reaching out to whoever handles refunds should do the trick!
When something feels fishy on an e-commerce site, the best practice is to get in contact with a representative from that company right away before any money has changed hands. Most customers would prefer having someone they can speak openly to talk through what happened rather than have all communication go through another channel like emailing questions back and forth, making people feel more.
Keep An Eye On Repeat Customers
Repeat customers are not only a way to generate revenue; they also help identify potential fraud. Monitor transactions with repeat customers and validate when the current order deviates from what’s typical for them. A discrepancy could be anything from wildly different products ordered or new shipping details that you need to check before processing any further orders.
Make Sure you’re Blacklisting
Work with your processor to create a blacklist that bans incoming orders from known or probable fraudsters. The list can block specific information such as an individual IP address and generic data like the purchaser’s country of origin in order to protect you from fraudulent transactions. It is worth noting that this could result in discrimination against those who originate outside our borders but are not bound by any prior criminal history or other negative profile attached to their name; however, without some type of vetting process for international buyers before they’re allowed into checkout – we should be concerned about losing sales altogether.
Create a Whitelist
A whitelist is the opposite of a blacklist but more or less accomplishes the same thing from a different angle. Rather than banish select bad actors, you start by blocking everyone except for pre-approved users. So, for example, if your list only included US or Canadian customers, it would be limited to them, and they could access all areas without restriction.
A WhiteList is an intense “no-fly zone” that blocks anyone, not on it – this includes both people who are blocked in one place as well as those appearing on any other blocklists with their IP addresses flagged.
Utilize Velocity Checks
Fraudsters are sneaky. They will often steal credit card numbers and max them out by using the card repeatedly until they get caught or someone notices unusual behavior on their account. These frauds can be detected through velocity checks which identify suspicious patterns in transactions submitted at a high frequency, typically indicating that an individual is trying to use stolen cards for multiple purchases before getting caught.
Use 3rd Party Fraud Prevention
Some services can provide automated reviews to evaluate the trustworthiness of a shopper, filtering out suspected fraud before the transaction. Artificial intelligence and multiple trusted sources analyze data, then assessed by an algorithm with a risk score for each purchase. This process happens almost instantaneously, so merchants do not have time for manual review in all cases. The transaction will either be approved or canceled based on this system’s evaluation. Still, there may also need to be some human interaction depending on how customized these parameters are from merchant-to-merchant.
Protect Your Business From Account Take Over
Customer accounts are a tempting target for fraudsters. Account takeover (ATO) fraud is the new form of identity theft where malicious third parties access your customer’s account as if they were them and change important details, make purchases, withdraw funds, or more. Once you find out that there has been an ATO on one of your customers’ accounts, then it will be necessary to file chargebacks against fraudulent transactions made by hackers who stole their information from various places online to update any stolen debit card numbers with those belonging to someone else so that unauthorized payments can’t continue happening without somebody noticing something fishy going on. When used judiciously, 2-factor authentication checks like email links also help deter these types of attacks.
What if you could use your fingerprints to get access and log in securely? That’s what a third-party product called onekey, does. One key is an app that can be downloaded on any device (phone or computer) which uses fingerprinting technology with other tools such as geolocation and IP tracking to learn where transactions originate from.
In the digital age, account hacking is a constant risk for businesses. But there’s hope! There are third-party products that can help by identifying legitimate logins and denying access to unauthorized users. In addition, these products offer “fingerprinting” (identifying core electronic markers) with other tools such as geolocation and IP tracking to learn where transactions originate, all of which put an end in sight.
Ensure Your Customer Data Is Secure
Keeping cardholder data on file for future purchases can benefit everyone, but the privilege comes with responsibilities. Storing your customers’ personal data requires extra measures on your part to secure those files and prevent them from being breached by hackers or lost in a natural disaster.
Both you and they expect credit cards stored online will not become compromised- this is because if there are any issues, it reduces fraudulent transactions, which may affect more than just one business; stores that use third-party payment providers like PayPal also have less risk of fraud chargebacks. One way of preventing these potential problems is through implementing robust encryption protocols such as SSL/TLS (Secure Socket Layer). This protocol provides security against malicious attacks when information is sent over the internet.
Make Sure You Stay PCI Compliant
The Payment Card Industry Data Security Standard is a framework designed to safeguard cardholders’ personal information and facilitate consistent data security measures worldwide. PCI-DSS helps protect sensitive information while it is being stored, processed, or transmitted.
As merchants, you must ensure your business complies with the standards of PCI-DSS to serve your customers better. Although however, adhering can be both time-consuming and expensive, the benefits are worth any drawbacks that may come about because you want only the best for those who trust you enough to provide them with financial assistance when needed most.
Make Sure you’re Following Best Practices When It Comes to Data Storage
The best way to safeguard your customers’ credit card information is by following these easy steps. First, only store the credit card numbers if needed for future orders and never write them down on paper! Next, make sure you access secure servers and don’t ever save that data in customer profiles or CRM databases. Finally, to be extra safe when taking payments over the phone, do so over a secured line instead of an open audio connection like Skype with no encryption.
Take Every Precaution
Data breaches may be becoming more common as we see them happening with increasing frequency – and without a reliable solution like PCI-DSS that offers complete protection, it is no wonder why business owners seek out other ways of securing themselves against these attacks through additional methods such as encryption or cloud storage services.
Tokenization is a way for consumers to protect their financial information. A third-party service substitutes sensitive data with temporary, non-sensitive tokens that are easily replaced without compromising the original card and its associated account number or bank details. These tokens can only be used once to complete one transaction; they have no real value of their own because they’re there as a placeholder until we need them again.
End-To-End Encryption (E2EE) is a security technique that blocks third parties from accessing information in transit. Sensitive data is encrypted on the sender’s system or device, and only the designated recipient can decrypt it. Thus, End-to-End Encryption complements PCI DSS compliance by protecting sensitive data. At the same time, it’s being transferred between systems without storing this information insecurely somewhere else where an attacker may be able to get access to it if their goal was malicious intent, such as identity theft.
Friendly Fraud Does Happen
There are many ways people can commit fraud. One prevalent example is friendly fraud which occurs when an authorized cardholder files a chargeback to recover their money instead of obtaining one from the merchant via refund or credit adjustment. Friendly fraud may arise from innocent situations such as believing that filing for a Chargeback and getting your funds back will be like receiving cash in return. Still, it could also indicate malicious intent where customers use this method “to get something for nothing” by pretending there was some kind of error on behalf of the seller’s end (Cyber Shoplifting).
Always Use Delivery Confirmation
Delivery confirmation is an effective form of friendly fraud prevention. It’s difficult for the customer to claim they never received their package if you have tangible evidence proving that they were delivered and signed. Of course, delivery confirmation isn’t always enough because sometimes people refuse or forget about deliveries without opening a dispute with the carrier service. However, when used in conjunction with other corroborating evidence like a signature required upon receipt, then this can be very helpful against false claims from customers looking for refund money after receiving what they ordered but didn’t want or need anymore.
Make Sure Your Billing Descriptor Is Recognizable
Can consumers easily identify your business by the name that is listed on their credit card statement? There are two parts to a merchant’s billing descriptor: the soft descriptor, which is used. At the same time, transactions are being authorized and only appear for about an hour after authorization (if you’re lucky), and then there are the complex descriptors. The latter will remain on customers’ statements indefinitely if they don’t log in with their banks or disputed charges within 60 days of purchase.
There should be no room for confusion when it comes to account activity. Vague descriptors can lead cardholders astray and make them think they are being charged with fraud when in reality, the transaction is valid. Therefore, when setting up your security descriptors, keep this point in mind: any descriptor that isn’t clear will cause problems if not changed immediately.
When it comes to account transactions, one would hope that every single detail of a situation could be made crystal-clear. But, unfortunately, though vague descriptions can confuse consumers into thinking fraudulent charges have been placed on their accounts even when these claims might be valid – all because they weren’t aware of what was going on at first glance or couldn’t read between the lines fast enough.
Keep An Eye On Any Suspicious Activity
Cyber shoplifting has made its way into the retail industry. Unfortunately, fraudulent cyber shoppers have found a new, easy, and risk-free mode of theft for themselves. Several indicators suggest an online customer might be trying to commit fraud in their purchase:
- Incongruities between the shipping address and billing address
- Large purchases or multiple orders with different sizes from one customer
- Inquiries about order status outside timely response timeframes established by retailers’ policies – if you notice any of these signs, please validate your suspicions so we can stop this abuse before it becomes widespread.
Monitor Any Digital Goods Sold
Digital goods and services are easy targets for chargeback fraud. There is a solution, though! We can limit the sale of digital items purchased in bulk by capping daily sales volume per cardholder or requiring memberships to buy these types of products/services. This will significantly reduce our risk because it limits the amount that any person could have at their disposal when they decide to commit this type of fraudulent activity.
Implementing these do-it-yourself prevention steps will reduce certain types of chargebacks. DIY efforts are typically able to address the “low hanging fruit”—that is, the easily preventable chargebacks caused by apparent mistakes and mismanagement. However, most types of chargeback can only be countered with intensive management effort that surpasses what a person could put in on their own – this includes addressing more than just “the low hanging fruit.”
Technology is constantly evolving in the world of eCommerce. This means new chargeback threats are appearing daily, making it challenging to maintain a successful strategy for managing them. To deal with this issue, you need an adaptive approach that evolves and stays ahead of changing environments. Your strategy should be able to identify any emerging trends or techniques and find ways to counteract these changes quickly so they don’t have time to take hold and stay there long-term because your goal will always be keeping up with those ever-changing landscapes.
The newest and most up-to-date trends are often not within the scope of a smaller business to keep updated. In addition, it can be time-consuming, tedious, or confusing for merchant owners who want to maintain their own boutique online store without paying someone else substantial sums of money each month – this is why they must invest in an affordable third-party technology provider!
Staying on top of all your latest regulations may mean significantly less work down the line, but making sure you’re aware of what goes into providing safe transactions will also make things easier as well when specific changes happen, so having outsourced policies would help save both time and effort while still being able to provide fast service.
Have you been frustrated with the number of chargebacks your business has recently been experiencing? If so, then spend some time learning about our professional-level solutions. We offer various services that will help reduce these numbers and improve customer satisfaction at all levels in just around 24 hours!
When faced with an influx of unexplained chargebacks, it can be difficult for any company to recover from their effects on profit margins. Fortunately, some experts specialize in overseeing this process; get in touch today if you’re interested.