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I'm sick of just giving into charge backs. If they continue to get worse the could put my quite profitable little website out of business. When we have a chargeback we give them all the info that they want (address verification, tracking info, copy of invoice) and we still lose every time!
What can be done to further combat against chargebacks? What does your website do? What percentage of orders get charge backed for you?
It really <makes me very angry> that everyone gets made whole in these things except for the merchant! While some <expletives deleted> gets a free $600 jacket at my expense! Police, FBI, Secret Service, nobody seems to care unless the fraud goes over $300,000.
[edited by: buckworks at 5:53 pm (utc) on Aug. 5, 2009]
[edit reason] Language [/edit]
For a fee or for free, you can query their database and if you find that a person or card that has placed an order on your site has issued charge backs in the past then you can decide if you want to fulfill the order or if you want to cancel it.
Also you get to put a "seal" of sorts on your pages that indicates you look this info up.. kind of a deterrent for people who abuse the charge back system.
The free service you can only perform 2 searches a day... The paid service is unlimited searches.
However ANYONE can report people who have issued charge backs to the database for free.
Notice to Vendors............ reporting these "people" is very important since, as pointed out, other agencies aren't interested in assisting us. Our only power is information.
Will this service stop it completely? No, however if you report this person then you may at least save someone else from being his next victim.
[edited by: lorax at 9:05 pm (utc) on Aug. 5, 2009]
I'm looking for ways to fight chargebacks due to credit card theft where someone steals your credit card info, places an order, gets it shipped to Miami, loaded on a boat and it's out of the country in 3 days.
Sigh. Talk about an endless loop to keep people from using your site...
I've had a couple chargebacks that were legitimate (stolen info) that I did not contest because they just purchased gift certificates that were never used.
I get fraudulent orders weekly, but 99% of these can be detected and deleted in less than 10 minutes.
You may need to tighten up your approval process.
99.9% of chargebacks I have would fall under that "Friendly fraud" category, so it's nice to have a site like that available.
I would still accept an order from someone whose chargebacked another vendor in the past, but I would just know I should demand every proof of delivery/signature service required. (I cannot afford to do this with every purchase, especially the low-baller ones.. but to avoid that potential chargeback fee and headache from a known CB-friendly customer, it would be worth it)
With the amount of legitimate orders that we have shipping to addresses other than the billing this usually doesn't raise a red flag. What raises red flags for you?
Best way to explain it: If someone buys a Bryan Adams CD, it's highly unlikely they'd buy an ICP, 2pac & Biggie CD to compliment it.
I don't force customers to give me their phone #. A lot will not, because they don't want to be telemarketed. If they're a new customer to you, you've got to minimize the "requirements" you force them to have.
How can we stop someone who has all of your credit card info, places a order and ships it to a different address.
There are ways to also verify that by having in the shipping or payment form of your store an edit box for the customer to enter the bank issuer phone number as printed on the card. Then you should be able to verify.
And I am not sure about the other recommendations to pay some "protection service" in order to avoid chargebacks sounds like spam, because the payment gateway is going to do that anyways and you pay commission to them in the first place.
The other thing I notice is that frauds rarely contact you before the order is sent except to ask for faster shipping. I don't do any overnights anymore because of fraud.
I did make 6 exceptions over the first year year we did this and all 6 turned out to be fraud. I have VERY tight profit margins so I can't take the chance to lose money on any order.
How can we stop someone who has all of your credit card info, places a order and ships it to a different address
Our situation is a little different than many, in that we have a relatively small # of orders (less than 20 per week), but the average value is close to $1000, with a number of items that are in the tens of thousands of dollars (US). So, we have time to investigate each order.
Orders that raise no flags get only cursory attention. Orders that raise multiple flags get deleted, while others get the full treatment:
Name search, reverse address and phone look-up, card issuing bank, and email address verification. Phone confirmation.
Our model allows this kind of attention, while the high volume low margin model will not.
How much do you want to write off?
My ecommerce site gets charges all the time to ship to another address. 90% are fraud easy to check and see the other 10% a Simple check is verify the cc by phone number. If the number matches the card then call the number and ask them "Did you Place this Order" somethimes we get a yes sometimes we get a no.
I am seeing fraud orders with the card owner name, address, telephone number, cvv number, and zip coming in.
Fraud is getting harder and harder to detect and you need to put more effort into verifying the order otherwise you will continue to get more and more of them.
The CVV number is not as secure check now as it use to be and more work on your end is required to deter future fraud orders that are sure to come.
The best way is call the owner of the card "if" anything is fishy and any order shipping to another address is an automatic check to verify the charge with the card holders phone number.
Our items are in about the same price range as yours. But, we WIN almost every time there is a chargeback, not lose.
If you are verifying everything you need to and defending yourself, then it is time to check up on your merchant account or whoever your merchant account contracts out to mediate chargebacks. There is actually a middleman between you, the customer, and the bank in a chargeback who is responsible for asking for and assembling your defense. If you are using some mass online processor, or worse a PayPal or some processor down the food chain you probably won't get any service to justify that slightly cheaper processing rate. They are not all the same, some handle things better then others. We work with Merlin Solutions for payment disputes and they have always been extremely fair.
I out and out refuse to send to any address other than the card holders. I have had a few stolen cards used over the years but because they go to the card holder address the parcels always get returned as "not called for" by the legal owner of the card who knew nothing about it.
This is by far the best answer.
We get orders from Miami transshipper warehouses that forward goods overseas, usually to Latin America. That's a huge red flag of course but even in those cases the great majority are good sales, Those warehouses are easy to spot if you look up the address (which usually has a box or "suite" number) in Google.
You'll find similar overseas forwarders in large port cities, like Oakland, LA and New Jersey.
Our fraud losses due to chargebacks and otherwise are microscopic. Incredibly, they AREN'T rising. As others have said, it's easy to spot the scammers and we are staying well ahead of them with improved technology.
Yes, when in doubt phone the customer. A buyer named Pat O'Mally in Des Moines shouldn't have a thick African accent. Actually, from my experience, scammers almost never answer their phones.
I out and out refuse to send to any address other than the card holders
About 10% of our orders use separate ship and bill addresses. We suffer almost no fraud.
eg, I buy stuff on my business CC and have it shipped to my home. All computers, for example, go first to my house where I set them up and load software.
Things bought on the personal card go to business address sometimes. I don't want extremely high value items left outside our door all day. And kids use CC's away in college. etc. etc.
But it looks like a neverending work!
We are close to team up with other eCommerce vendors, who also have a lot of traffic and fraud problems to run one central server to combat these schemes...
All of those are based upon 1st time buyers to your site. Established buyers may have all those issues at some point but you probably know who they are...
Its not unfair to ask for more info on a suspicious order if you've never dealt with someone before. If they balk refer them kindly to your favorite competitor.
1. Web ip is really good, email ip is often better.
2. is a flag but not a reason to deny, I travel 100% and often have things shipped to the city I am in not my mail service in Seattle. And often banks dont have a place to put temp addresses.
3. is another good flag, but not an end all.
4. no phone is a full flag, so email for phone number or you will cancel order. On the first few orders you have no business relationship and need training wheels for each side of the order.
5. Depends on the item... I order K9 supplies next day, as well as other things I need for things that way with my screwy addresses, emails and the like. But I work both ways with my suppliers.
The ONLY way you will ever win a chargeback dispute is to prove that you shipped the items to the billing address on the credit card, and you'll have to decide for yourself the size order that makes sense to spend the money requiring a signature.
(In my experience, both UPS and USPS are not consistent when it comes to doing what they are supposed to do with restricted deliveries/signatures/etc.)
Small orders I don't sweat any of this stuff, because it's not a problem (luckily) in my industry.
But for larger orders, you have to trust your instincts, have a plan, and stick to it...sometimes losing a sale here or there is worth not gambling on potential chargebacks.
When we call, the phone number doesn't work, or isn't who it's supposed to be.
Two strikes and they are out.
This is one reason I HATE systems that automatically process credit card transactions. If you catch a fraudulent large order and the card was automatically run, you're still going to be zapped for the merchant fees.