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Seriously, we do not accept cc anymore due to the charge backs. We ask for bank transfer or mailed check (which is a pain in itself - "The check is in the mail") and experience that approximately 1% of clients cancel their order because they are not able to pay with cc.
So we are loosing 1% of business due to not accepting cc. In our case that is a lot better than loosing 5% due to charge backs (plus the fines).
However, every industry is different and you may be loosing all your business if you do not accept cc.
I would love to accept cc if the cc companies would stop putting ALL the risk on the merchant. Unjustified charge backs border (at least) on fraud and cc companies are an active party of that due to their policy of doing charge backs without questioning. They don't give a damn if you can prove that you delivered the order (signed, stamped and faxed). Which leaves us with the option to sue the "customer" for a 3 digit ammount in a different country?
i am afraid if do not accept cc, it will have too much work to process check and talk to customer and sometimes they may forget to mail the check and lose sales.
I don't think that refusing credit cards is the answer, unless you are willing to take serious hit to your bottom line. You should definitely put some procedures in place so that when you get high money purchases, you will be more protected against possible fraud
"Your customer requested the charge back with his bank/cc company. Please contact your customer"
Every Charge Back I had to deal with was about customers "forgetting/misunderstanding yadda yadda" ... promising to redo payment and never living up to there promises. There was not a single issue of stolen/abused card or data.
There is a certain percentage of "faulty" people in this world and I don't want to deal with them. CC companies make it way to easy for those.
I, for one, do not accept credit cards!
My bottom line is not hurt by "lost" customers - who never have been or would be a customer anyway - but by throwing good money after bad one (charge back fees/workload/phone bills etc.)
Also, major third party credit card processing companies such as CCBill.com and iBill.com will handle all chargebacks, customer service and support. They are not the best option just because of this, IMO, however.
We also had a chargeback recently because the customer claimed that the goods received were not as described. He claimed that the equipment we sold him could not work with windows XP but this was not true. If he had contacted us, we could have told him where to download the driver. Anyway, he made no attempts to contact us or to return the goods before contacting his bank. We are disputing this chargeback at the moment.
Besides disputing the chargeback, you should try to recover the goods. Lodge a report with the police.
For orders of this size, we will do some more background check besides AVS. We will probably ship to businesses only rather than individuals.
But of course we never sell to Nigeria, Liberia and other strange countries...and learned our lessons the hard way.
The creditcard companies are not interested in the merchants security and do nothing to make this more safer for merchants.
Clever customers know this and know how to use this policy of the credit card company to get free merchandise.
I have never had one go in my favor. Basically you just have to be cautious about the orders you fill and try to filter out the ones from outside the country, overnight, and large ticket odd item orders.
I just had one last month with AMEX where the customer had it shipped to her house, signed for it with FedEx and then disputed it a month later. I called her and she said there must be some mistake because she didn't dispute it. Then the next day her phone number was disconnected/changed!
If you only lost $500 you are doing good. Most of the ones I have come through are $2000+
I had a $3500 order that was recovered by the PD in the city it was being delivered, luckily. That seems to be the best bet.
So now we go to the expense of actually calling the customer if they are using yahoo, hotmail or any of the free email accounts to verify whether they did make the purchase. Chargebacks makes you think hard of how you do business, because it can hurt.
I had been approached by it's primary vendor and it was an informative call, and they sent me some very educational material. It cleared up several gray areas that VISA really has let merchants know about.
After encounetring certain threads it's obvious many people have no concept of what Verified by Visa can do for a merchant. If you have the software in place on your site, you are protected on 100% of all US consumer Visa cards, regardless of whether the shopper is registered in the program. I have been told by people who have already been employing VbV for the last 3 months that 75% of their transactions are Visa cards, and they are ALL covered for protection. One customer of this vendor, whom they put me in touch with, said that he had not a fraudulent trx since he turned the service on and it has saved his company over $300K since Sept 03.
I will be begining this program, and authenticating by Feb 11. You must undertand all Visa cards are covered. Call your Visa rep, or I can put you in touch with my vendor, but don't listen to all the gossip that is floating around because it is no longer true. VbV is for real and will be hitting the merchant market directly in 2004, and it really does protect you.
After one month, worldpay contacted me, saying that those cards were reported lost/stolen. I lost my money and the goods and all my remmitence were suspended due fraudulent transactions.
Is there anything i can do in this situation?
Any help is welcome.
Not really. Did the security code match up?
A faxed copy of the card is not too useful. Anyone can create a card that looks good enough when faxed to be real, and if it was physically stolen then it is exceptionally simple.
One method is to ask for the customer services telephone number on the back of the card. You can ring the number and check if the card number belongs to that bank. The staff should know which number ranges belong to them, or they can look it up.
Always err on the side of caution if you can't afford to lose the amount. I have lost some big genuine orders because of this. But then the customer tries to argue that it is the statement address, AVS disagrees and the customer says they haven't moved recently. Loss of an order is often cheaper than loss of goods and money.
As far as you getting the signature, your processor should have asked for a copy of that to compare. if they matched, then it should have been a lot more difficult for them to do a chargeback.
We do of course take precautions, and check the address match, CVV etc. We also have other sources we can check, such as membership of a relevant society.
The UK Post Office take a lot of stick - but in eight years we have never lost a consigmant (packet or parcel) in transit. In a few cases long delays of 3 weeks + for a journey of 25 miles have arisen. Recently we did claim for a lost parcel 8 weeks overdue, and were paid compensation. A week later the parcel was returned to us as "not collected by addressee".
It is quite untrue that "millions of letters are lost each day". A claim that "our cheque was lost in the post" is believable once in 25 years.
There is really nothing you can do in this case, your fraud screening procedure was wrong in the first place.
1. You should have asked for a code 10 check (equivalent to a manual CVS check) from Worldpay, to see that the customer name and billing addresses match that of the shipping address.
2. Nobody in their right mind would agree to send front and back copies of their credit cards by fax or e-mail.
3. We would probably not have sent such an order under any circumstances given that it is for such a large amount from a high risk country. We would have insisted on 100% T/T or use an escrow service.
Besides the excellent fee structure, the processor has a "chargeback defense system" which automatically examines incoming chargebacks to see if they can be challenged in any way. If they can the processor automatically does so for you. Even if you can't beat it, you don't have to deal with any paperwork and the fee is only $10.
More interestingly, you can also add to your terms with the processor a requirement that all customers at your store have to check a checkbox or otherwise agree as they checkout to your own special terms. Then later if the customer tries to chargeback for a reason covered in your store's terms, this processor will automatically go to bat for you and defend against the chargeback.
It's worth checking out!
I think many merchants will agree that offering an online payment option generally leads to more incremental sales than the possible chargeback losses.
Digital good merchants are sometime less concerned about chargebacks since, unlike hard good merchants, they normally have no out-of-pocket loss (other than chargeback fees).
Another thing, look a this article done by the Internet News
It seems that PayPal was delivered a "$150,000 fine" for "misrepresenting the rights of account holders when an affiliated merchant fails to deliver merchandise."
According to this article, PayPal offers this chargeback defense at the expense of its consumers. The government has been "tackling complaints from consumers about denied billing credits or 'chargebacks' when merchandise ordered through PayPal, and funding with American Express of Discover cards, where not received as promised."
Just to be the devil's advocate; PayPal will protect its merchants by simply denying a consumer a chargeback when they were clearly a victim of bad business. This doesn't say very much about the credibility of PayPal or its merchants. Is this the type of behavior that is encouraged by PayPal. Is this why "PayPal has achieved one of the lowest reversal rates due to some of the unique attributes of the service?"
It would be a searchable database that contains information about customers who have falsely claimed chargebacks and all Online merchants could contribute to it. I realize there would be some legality issues to look into. The information gathered would most likely have to exclude financial details and contact informaton.
Probably not a feasible solution, but it would be nice.
every processor has different ways to handle chargebacks and buyer/seller disputes. typically most credit card companies and processors stick the merchant for disputes. PayPal is a little more balanced in providing coverage for both buyers and sellers in certain situations.
while PayPal may not eliminate all buyer or seller risk scenarios, we certainly do more than most to reduce the likelihood of fraud. also, our automated dispute resolution system also provides additional methods for buyers and sellers to resolve complaints: