Chargeback, the word that Internet merchants fear. A chargeback is what it’s called when a transaction is reversed. In other words, rather than adding money to your account it is deducted. Chargebacks can occur for a wide variety of reasons, such as double-charging, credit card expiration, bank error and customer disputes. If you get too many chargebacks against you, there is a possibility that you will loose your merchant account. Once you’ve lost your merchant account you are placed on the Visa/MasterCard MATCH list for several years which all Merchant Account Providers have access to, and if they find you on the list they won’t reissue a merchant account to you. If you are one of those merchants who have lost their merchant account, there is still hope. Bank Card Law specializes in helping companies who’ve lost their merchant account because of excessive chargebacks.
Here are some tips that can help you eliminate chargebacks:
1. On your order confirmation page provide the customer with the name, phone number, e-mail address, etc., of your company so that they will recognize it when it appears on their monthly credit card statement.
2. Include this same company information in the e-mail confirmation that your customers get when an order is placed (they do get one don’t they? If not, they should… it’s good for keeping records.)
3. Use Address Verification. People ordering products using a stolen card number will never use the real cardholder’s billing address, so this is your chance to stop the order before it’s too late!
4. Scrutinize orders from foreign countries. A large percentage of fraudulent Internet purchases are made from Indonesia, Russia, and other eastern block or developing countries.
5. If an order seems suspicious, call or email the customer and attempt to verify anything you can about them. Pay attention to strange orders and then follow up.
6. And lastly, if you ship a product, include the customers invoice. Always keep copies so if you’re ever challenged you have some kind of defense.
7. Be wary of accepting orders from people who used a free e-mail address when ordering (i.e. Hotmail, Yahoo, etc.). Tracking people who used a free e-mail address is almost impossible, it’s much easier for them to get away then if they used their Internet Service Provider (ISP) e-mail address.
Unfortunately, credit card fraud is very prevalent on the Internet. The best thing that you as a merchant can do to reduce the cost of fraud is to be informed. I highly recommend that you dedicate several hours to reading through the web sites below and implementing as many of the suggested strategies as possible into your e-business:
AntiFraud, includes a list of over three thousand domains that are used for free email which can conceal the identity of the real customer.
10 Ways to Reduce Chargebacks and Fraud
In almost all cases you will be responsible when a fraudulent credit card is used on your site, and you will be charged for the sale. Authorities are unlikely to get involved in a fraud case unless very significant amounts are involved. However, you should not hesitate to report each and every case of fraud that occurs.