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I heard somewhere that you can report the chargeback to their credit report as an outstanding debt.. is this possible? would this work?
any other suggestions?
(edited by: Marcia at 4:00 am (utc) on May 8, 2002)
Then again, im not sure if a little lawspeak would supercede the preferences of the card companies and whether they choose to redeem chargebacks.
Our thought was 1) We have the Purchase Order that requests the part, 2) Placing a CC number on the PO tells us the want to pay for the order by CC and 3) Signing the order gives us authority to debit their card.
Do you think this is foul-proof enough?
Or would you suggest something different?
Even with a signature, it is shakey.
If after getting the chargeback, you report a fraud, the police go there, and cannot find who lives there, the signature is unreadable, everyone denies receiving the goods etc, then they get on with dealing with GBH and rape cases etc, rather than a bit of "petty" fraud.
I would make the same decision, but all I say is that trading online, you have to be prepared, I can get up to 25 frauds put through my account each day. Most are easy to spot, but You cannot trust anyone. Forget credit cards, ask for direct transfer of funds! :)
With that said you can eliminate the amount of fraud with good practices. Using AVS is one way. We actualy only get an authorization when the sale is made. The next day we then do a manual review of the AVS results. If something does not match an email is sent to the consumer. If everything matches then we submit for payment.
We also now use a delivery method that requires a signature.
if you are trading from a website, you MUST have an internet merchant ID either issued by your bank or by an internet card processor. you must also state "INTERNET TRANSACTION" clearly on payment receipts - this is a card issuer rule. without doing these 2 simple things, every legitimate transaction via the net can be charged back as the retailer won't have a signature.
internet transactions do not require a signature. if a card issuer asks for a signature and you don't have one, state that the sale was via the internet and provide your internet merchant ID (and say who provided it) and a copy of the transaction receipt showing "INTERNET TRANSACTION" - the card issuer will normally accept that in place of the signature.
however, it still won't cover you against the real reasons for the disputed transaction. make sure you provide whatever other evidence you have to show that the transaction was legitimate and that you provided the goods or services in good order and on time. if you can provide all this, then you MAY be able to prevent the chargeback from going through.
a few other things you can do to prevent chargebacks:
how many times have you looked at your credit card bill and thought "what's that charge for?"? chances are most of us have at some point. credit card bills come through the post several weeks after the transaction was processed and cardholders don't instantly recognise the transaction they've made, expecially if it doesn't have your company name on it. of course, this leads to chargebacks. make sure you give information on your website and in your transaction receipts about what company will process the transaction or what will be displayed on the customer's credit card bill.
only deliver to the cardholders address - NEVER have separate billing and shipping addresses. if you only deliver to the cardholder's address, then there is little point in a fraudster making a purchase as he won't receive the goods. NEVER ship to PO Box numbers and ALWAYS get a signature for delivery.
NEVER sell intangibles unless you have no other choice. it's very tempting to save time and money by providing software, music, documents etc as downloads, but that just makes it easy for fraudsters. they can give any card number and address to obtain the downloads and they will be totally untraceable. by providing goods as tangibles (CDs and printed docs), a fraudster would have to give a genuine address to obtain the goods - again, they won't give their own address and no point giving the cardholders address as the fraudster wouldn't receive the goods. sure it costs money to print documents or to burn CDs, but it's only a few pence and the costs are easily passed on the the purchaser. it also looks more professional and could generate more sales to offest any losses due to slightly higher prices.
ensure that you provide accurate product or service information (including terms and conditions) prior to purchase - it's so simple to do, yet many businesses still fail to do this. of course, when customers receive goods that don't meet their expectations, they can charge back. you may think your descriptions are fine for the average person, but half the world's population are below average intelligence. idiot proof your site.
and of course, fraud checks. check names and addresses match details listed on the white pages / yellow pages etc. check infobel.com or 192.com (UK). for other countries, search on google for "country" + "white pages" then check the cardholder details. if you're suspicious, call the purchaser - a phone call only costs a few pence and is much cheaper than a chargeback.
AVS is good in that it shows the given details match the cardholder details held by the card issuer - not much good in the case of stolen details. CVV theoretically shows that the purchaser must be in the possession of the card, and card issuer rules are that CVV numbers must not be stored, but some retailers are already adding CVV fields to their order forms and storing CVV numbers - in a couple of years, CVV could be worthless as sites get hacked and cardholder details (with CVV numbers) get stolen. don't rely solely on these - they are very useful, but they are not a guarantee that the transaction is genuine.
i could go on and on, but i need sleep ........
Unfortunatly, my business is service orientated and very minimal tangible items are sold. I feel lucky to have only experienced the total of 2 chargebacks in over 75K in sales.
I'm going to look further into the internet transaction Id in place of a signature. Thank you..
I was told without a SSN i can not report to credit services. But a friend of mine who is a cop said that i can file a report of Theft of Services- i think this is a police report i will find out more. He said in the state of Tenn, charging back of services rendered (i would need to show proof) is considered theft against the business, and the person could be held for that.
Am i going to far out on a limb? Am i getting too petty? Do normal business just drop it?
A thief can give you a stolen credit card. Not only are you out the product and the purchase amount, but you also get a $15 fine for the chargeback.
but if you take precautions as outlined above, then goods will be sent to the cardholders address (verified by AVS). goods or payment will always be recoverable.
if the cardholder signs for the delivery, you have a signature to satisfy the card issuer, thereby preventing the chargeback. if the cardholder refuses to sign for the goods, you get them back (you do put a return address on packages don't you?) and you refund the cardholder, thereby preventing a chargeback.
sure some chargebacks will occur no matter what precautions you take, but you can easily prevent the vast majority of them just by following simple precautions.
In a perfect world, this is true. However, we all have different situations.
In my case the precautions don't always work. My web page products are delivered via email. So, I have no signature, or address. Sure, I could send a CD, but I would lose about 90% of my sales to my competition. Granted, I could require address verification on my credit card processing, but I have found when i do this, I lose more sales than I do from Chargebacks. When I had address verification on my site, it made my customers mad because they didn't understand why they had to give an address when they were receiving the product via email. Chargebacks, and Fraud are something that can't always be avoided in my business.
Secondly, we own a brick and mortar store. Quite often we will get someone who makes a credit card purchase in person, then does a chargeback later. If we send the slip in with the signature, we will get the money back. But, once in a while the person will claim they didn't sign it, and their card was stolen. Sometimes their card really may have been stolen, or sometimes they just lie about it. Poof, we are out the money.
I could really go on and on with examples.
Unfortunatley with credit cards, the retailer is ALWAYS liable. Some of these we later recover, but many of them just aren't worth taking someone to court over, and some really were stolen cards.
All we can do is take every precaution we can, or not take cards at all. I am at the mercy of the credit card services. Either I live with the chargebacks, or lose a large portion of my sales.