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Faxed signature as chargeback protection?

does this really not work?

5:01 pm on Jul 12, 2004 (gmt 0)

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I can't believe this. What are your banks' stance on this?

My merchant bank informed me that with ecommerce transactions, even if I receive a faxed order form with signature, drivers license, and front and back of credit card, I can't use that as 'proof of purchase' in case a charge is contested. In other words, even if I have a signature on file, I will still lose the chargeback because it isn't a manually imprinted or signed sales slip.

Was my agent just an idiot or is this really how lopsided banking policies are?

5:25 pm on July 12, 2004 (gmt 0)


WebmasterWorld Administrator rogerd is a WebmasterWorld Top Contributor of All Time 10+ Year Member

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Banking policies are skewed against the merchant. If a customer claims they didn't buy it, the bank will almost certainly take the money from you first and ask questions later.

The kind of documentation you describe should be very helpful when you are laying out your case for the bank, however. Merchants CAN win chargeback disputes if they have good documentation.

10:38 am on July 13, 2004 (gmt 0)

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8 years of ecommerce and i still dont know how to stop a chargeback. Scanned ID, passports, faxed credit card copies, they dont care.

[edited by: DaveAtIFG at 12:48 pm (utc) on July 13, 2004]
[edit reason] Removed off topic comments [/edit]

3:50 pm on July 13, 2004 (gmt 0)

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The 2 types of transaction are defined differently by the merchant bank, one is a customer present transaction the other is a customer not present transaction. You could have a sample of their DNA mailed to you and it would still make no difference, the bottom line is if the customer was not physically in your presence at the time of the transaction then it's a customer not present transaction, end of story.


10:34 am on July 21, 2004 (gmt 0)

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My experience is that if it is really a case of fraud (signature is forged) then you will lose, but having a signature tends to protect me from all of the cases where they send a fraudulent reason code (83, 37, 57) but the actual cause of the chargeback is not fraud or is just that the customer forgot/wanted to cancel/didn't recognize it. Then we tend to win. I find that most of my chargebacks are not due to real fraud, so usually the signature works (It's card not present but if we are suspicious or it's a large order we might request a signed fax saying they authorize the order). Again, it does depend on whether your merchant bank is on your side or not.
11:17 am on July 21, 2004 (gmt 0)

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Jeeze, what bank are you guys with? I know that merchant banks all have similar policies, but I've never lost a dispute when I had a copy of the card, faxed or other.

Just tell your bank that the card was present but as an Internet merchant you don't have a terminal or a way to imprint it for a "Card present" transaction so you photocopied it yourself while the customer was in your store. The bank will take the money from your account first, they always shoot first and ask questions later - but I've never had a case where I didn't get it back if I had a copy of the card and a signature.

It's not like the customer is going to say "They didn't photocopy it, I faxed it to them!" because that would certainly land you a "win" as they just admitted to a purchase :)

5:49 pm on July 21, 2004 (gmt 0)

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no doubt... what banks are you processing though? we send the customer a product and get an esignature confirmation from the USPS. any chargeback from discover is overturned with a signature and almost all my other chargebacks are won.

the killer is that you get dinged for a chargeback and whether you win the dispute or not, visa/mastercard just see the chargeback.


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