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I'm a novice here and also a novice at e-commerce.
I've purchased a domain and going to run my own business through internet.
As it means acceptance of credit cards I've got plenty of questions, but one of them borrows me much more than others - a question of my chargeback levels.
I suppose I've studied all possible methods of combating online fraud (CVV code checking, AVS, geolocation etc.) and the method of telephone verification (voip) seems to be the most reliable and cheap.
I've found a couple of companies providing it.
Have you tried telephone verification and what do you think about it?
I'd be grateful for any comment, because it's very important for me.
This has helped tremendously and has also increased his business because his customers are very surprised that the owner of the site is calling them to verify the transactions
[edited by: lorax at 9:14 pm (utc) on Feb. 18, 2006]
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Some ARE fraud in a sense - the customer has this idea that they can just dispute any charges and not have to pay for it, but that eventually usually backfires.
We get very few chargebacks, and we almost always pursue them to the end, and we end up getting about 60% back, and another 20% or so "partials" (that is shipping costs etc).
I noticed that the ones who made "validation" calls usually also then screwed up my order--they shipped to the billing address, or they couldn't get the credit card processed (and when I telephoned my card issuer I was told the wrong code had been sent), or they took several days to ship, or they shipped by the post office when I had specified only UPS/Fedex, and so on.
Eventually I realized that the "validation call" merchants were the ones that were likely to be amateurish, undercapitalized, overworked, trying to get by without a proper merchant account, didn't have a UPS account, etc.--in short, apt to cause me problems.
Now, when I get such a "validation" call, I just tell the merchant to cancel my order immediately. There's nothing I can't order from someone else in about five minutes.
Since we began this policy, we've had a surprising number where the cardholder hadn't known about the purchase. Those usually turn out to have been relative/friend/roommate who decided to "borrow" the card. It's not all that unusual for us to be told that the person had absolutely NO permission to use that card, ever (card stolen by supposed friend or ex). However, most of the others would have probably done a chargeback because they wouldn't have recognized the charge and could have legitimately said they hadn't placed the order. We feel the effort is worth it because even mistaken chargebacks really add up in time and money.
As I can see there are plenty of opinions over the usability of telephone verification.
I've compared all pros and cons and decided to include this service into my payment routine.
Now I face the problem of provider's choice.
Network_Pay recommends Maxmind. But as I've discovered, they specialize in IP geolocation and telephone authorization is just an additional service.
I've also found Fraudgate (their web site seems to be neglected, so I doubt in company's reliability) and Varilogix. But the last one is too expensive... There's also Proveout - a company with attractive price but probably a new player on the market.
Can your give a piece of advice - what company to choose? Have you ever cooperated with one of them?
Thanks once more.
But like others have said, this only covers true fraudsters, not the regular customers who change their mind. Your product and service is the only remedy for those.
I continue to doubt. Maxmind's verification costs 0.20$ per call for a US situated client and 0.38$ per call for a customer from UK. For comparison, Proveout's verification costs 0.15$ for both US and UK. Varilogix prices an approved call at 1,25$ (!).
Of course the company's prestige makes sense. But if the service is the same - why should I pay more?
There's an interesting thing I've found about this new company. They declare that they provide an opportunity "to record customer's voice in order to prove that he/she has actually made a purchase and won't decline it as it sometimes happen". It probably targets dishonest customers who potentially can change their mind and decline the purchase.
Do you know if anyone else provides such service?
Thanks for your time.