Dealing With Fraud (Verified By Visa?)

Advice on handling high chargeback rate and the Verified By Visa Solution.

[jjk2000]

My chargeback rate has been rising (I'm not sure whether it is customer's changing their mind or fraud)to the extent that it is threatening my business survival (above 2%). I don't deliver physical goods. A friend suggested that I use verified by visa to ensure that I am covered against chargebacks.
Is my chargeback rate exceptionally high?
Does anyone have any experience of Verified By Visa? (It seems to good to be true)

[Raymond]

In terms of preventing chargebacks, VBV has proven to be very effective. My experience with VBV is, it is also a very effective way to stop people from buying from you as well. A good percentage of my customers have no idea of their VBV information or they have somehow forgotten it. Most of my VBV customers just give up because of the trouble they have to go through to get the VBV right.

I haven't done an estimation on how much business I've lost due to "legitimate" failed VBV, but I receive complaints about VBV problems almost every day.

[5stars]

What is vbv? Is that the 3 digit number on the back of the card?

My merchant company has been pushing me to do the 3 digit thing. Our chargeback rate isn't in danger but they are encouraging all their clients to move that way.

Thanks in advance

[Tsuren]

jjk2000, 2% is too high even for non-physical merchandizes. Adult sites can have about 1%. It's the highest result.

If you have affiliate program you had better to check it with attention. May be all chargeback are result of the particular affiliate's job.

VBV is not three digits on the back of the cart. Those three digits are "CVV" which means "Card Verification Value" VBV is based on another idea. Cardholder's bank issues additional PIN for VBV transaction. Customer inputs the VBV PIN during payment process into the bank's site. Actually VBV is not the widest supported thing :) Customers have no idea what it is, they do not know that they can to ask for the VBV PIN... so VBV seems a dead-born child. Forget about it.

[derekwong28]

I have got another concern about VbV. My bank has enrolled all its customers in it without telling us. I have just received a PIN code which I thought was for use in an ATM machine. If I had been asked for a VbV PIN, I would not know anything about it since I did not know I was enrolled.

I suggest that you do reverse IP checks on all your orders, and refund immediately all those whose whose countries do not match the one specified in the invoice address. Try this first and see whether you could cut your chargeback down to an acceptable level.

[Morocco]

Raymond,

I'd be curious to see those statistics on how many transactions you are losing to VbV. When I approcahed Visa concerning the pre-enrollment rates I was told that banks must directly market to their card holders a total of 5 times and 90 days before pre-enrollment. I was also under the impression that a VbV pin had to be created by a cardholder, not the bank. My customers who are prompted for pre-enrollment aregiven the option to decline and I'm still protected.

Derek,

I'm curious to know what bank you have.

[Tsuren]

derekwong28, it was "3d secure" what you are talking about. But it is based on the same idea as "VbV"

[derekwong28]

My bank is DBS. The pin supplied was clearly marked as for VbV, not 3D secure.

I understand that 2CO has implemented VbV recently, can anyone tell us whether it has affected their conversion rate or not?

[Morocco]

Conversion rates are not necessarily affected. The checkout process is completed by the time VbV initiates. If a cardholder is enrolled and has a pin and they clsoe the browser window we can still accept those transcations. It didn't fail VbV so we usually contact them by email or phone. If they fail VbV and fail to use the password reminders and 800 number we usually prompt them for another form of payment. They have four tries in order to get it right.

I am still curious to see 2co's conversion rates though.