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Credit Card ChargeBack Fees

 12:08 am on Apr 22, 2005 (gmt 0)

Received a few Chargebacks on a Bank Statement today. When reviewing the Chargebacks I noticed that the transactions occurred during a time that:

1.) I use AVS
2.) I use (2 or 4 digit) Security Code
3.) I do not accept transactions from a certain segment of IP's (from certain countries, they are banned)

As an online Merchant I am curious what more I can possibly do aside from not accepting Credit Cards at all? Go into dispute, which wastes even more time?



 12:23 am on Apr 22, 2005 (gmt 0)

What was the chargeback reason? Unauthorized charges, or something else?


 12:38 am on Apr 22, 2005 (gmt 0)

Fraud or Stolen Credit Card Number.

What does not add to me is the fact that the fraudster must have had:

- The Name
- The Address (AVS)
- Three digit Security Code

All the major details I check against. And there is not just one. Their are a few on my statement!


 12:57 am on Apr 22, 2005 (gmt 0)

Did you get a signature?

FYI, not everyone reading this thread will be using the information as a merchant. I think it is better to discuss the chargeback in private, offline, or with your merchant account representative.


 3:51 am on Apr 22, 2005 (gmt 0)

Did you ship to the address you got the AVS match on?

If so, you may try and dispute it if you got a signature. We have been successful in this about 50% of the time (with or without signature).

I have also had success when shipping to the billing address by sending an email to the fraudster telling them I would inform the local authorities of their "theft" if they don't call their credit card company and remove the chargeback. One of the times we got a panicked phone call, within 15 minutes of hitting send, that he had already called American Express. ;)

Corey Bryant

 12:07 pm on Apr 22, 2005 (gmt 0)

A lot of hackers have all that information. Never assume that they do not.

A few other ways to help alleviate this. if they order a high amount & request it be shipped overnight. They are relying on greed that you will not check the CC out.

Also it could be friendly fraud - where by the child uses the credit card but it is shipped to the same address.



 1:07 pm on Apr 22, 2005 (gmt 0)

If so, you may try and dispute it if you got a signature. We have been successful in this about 50% of the time (with or without signature).

You still have to pay the chargeback fees even though you are getting the chargeback reversed because your customer made a mistake and it's not actually fraud. It's legal theft from the banks.


 3:39 pm on Apr 22, 2005 (gmt 0)

My situation is a bit different than most. Instead of products or merchandise I offer a classified listing service. Therefore I do not collect signatures; maybe I should start collecting digital signatures?


 3:58 pm on Apr 22, 2005 (gmt 0)

To report credit card fraud or internet fraud go to www.ic3.gov this is the Fed's web site and they do look things quickly. I bought an item that had to be shipped by semi truck and got tired of delays and excuses from the seller...went online completed the information ...had one phone call and next thing the Fed's were at the sellers home 3 days later! It got results, suddenly it was shipped.

Corey Bryant

 6:22 pm on Apr 22, 2005 (gmt 0)

It will somewhat help - but honestly, the customer can say he/she was not happy with the service and depending on the issuing bank, they might refund the money



 12:24 pm on Apr 26, 2005 (gmt 0)

What card types were they on?


 4:17 pm on Apr 26, 2005 (gmt 0)

I have experience of a customer charging back, saying he didn't authorise the payment even though he clearly used the service (checked into the hotel, signed the registration form and everything). Still our bank won't challenge it, even though it's clearly fraud that he claims he doesn't want to pay for something he's clearly used. They say it's up to us to challenge it with him directly, they can't do any more because he signed a legal disclaimer saying it was unauthorised. But of course he doesn't want to talk to us.


 4:32 pm on Apr 26, 2005 (gmt 0)

Charge backs normally happen when customers dispute the transaction, you should approach your bank with the necessary evidence, product purchased, proof of shipping and email exchanges with the customer, IP address from where the transaction was received etc. to resolve the dispute in your favour.



 7:01 pm on Apr 26, 2005 (gmt 0)

It still really doesn't matter in most cases of fraudulent chargebacks. If you recieve a chargeback for fraud you're out of luck.

depending on the card type and where you're from there may be a few solutions which we run religously


 10:49 pm on Apr 26, 2005 (gmt 0)

You may want to make sure that your website and DBA are the same. This information should be on the customer CC statement.

We do have customers claiming chargeback 'cos our website name does not appear on the CC statement. A hard way to learn a lesson.


 3:27 am on Apr 27, 2005 (gmt 0)

This may be a little bit off topic, but does Verified by Visa help prevent chargebacks to merchant due to unauthorized charges?


 2:19 pm on Apr 27, 2005 (gmt 0)

Here...you decide:


Merchants who use Verified by Visa are protected from fraud-related chargebacks on all personal Visa cards—credit or debit, domestic, or international—whether or not the issuer or cardholder is participating in Verified by Visa, with limited exceptions.


 5:58 pm on Apr 29, 2005 (gmt 0)

OK, anyone has any personal experience w/ Verified by Visa?


 6:29 pm on Apr 29, 2005 (gmt 0)

Bottom line is there is no level of AVS, CID, CSC or Verified by Visa that will stop fraud because stupid people supply their information to Phishing sites all the time. I've also seen one ecommerce server breeched where the hackers just inserted a tiny script to email all the credit card details during checkout process.

When I was part owner of an ecommerce fulfillment business a couple of years back we set a threshold of pain on orders and any orders above that dollar threshold get manual verification. We check the name + address in Google or some online phone books, most of them show up with the phone number. If we can't verify them easily online, we call (AREACODE) 555-1212 and verify the phone # and address for the order. If something still doesn't pass the sniff test, or the order is somewhat large, we call the number at that address and ask them if they placed the order, "verifying the transaction for your protection".

Craziest chargeback I ever had was at a university, the receptionist signed for the package, the recipient did a chargeback because SHE claims she never got it. I'm sorry but if someone signs for it, it's delivered, what happens at that point is NOT MY PROBLEM so we disputed it with UPS records to prove it.

If it's not a flat out fraud I'd dispute it because a lot of people see chargebacks as legal shoplifting.

At a minimum they should return the merchandise.


 6:52 pm on Apr 29, 2005 (gmt 0)

Fraud will always be an issue. The main concern is who should be liable for that fraud. vbv is the only way to move that liability off a merchant's shoulders. I don't care about fraud as long as I'm not payin for it.


 8:40 pm on Apr 29, 2005 (gmt 0)

vbv is the only way to move that liability off a merchant's shoulders.

If you only use Visa for that reason you also lose mastercard, american express, diners clubs and debit card sales. I'm not sure there's a win/win solution yet but VBV is a definite start.

I'm curious is anyone using VBV reading this thread has been hung out to dry on a fraud sale yet?

What about a spurious meritless chargeback which is as good as fraud?


 4:42 pm on May 1, 2005 (gmt 0)

I guess no one here ever used vbv....


 12:50 pm on May 6, 2005 (gmt 0)

I use it in conjucntion with MasterCard SecureCode.

Works great. Be careful on the vendor you choose to recieve it from.


 3:32 pm on May 6, 2005 (gmt 0)

vbv has no acceptance in europe yet. the idea behind it is great, but the implementation from some european banks is laughable.


 5:35 pm on May 6, 2005 (gmt 0)

that's what I've heard

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