FRAUD AND CHARGEBACKS

Merchants who conduct transactions and transfers online or otherwise via merchant accounts most fear the term chargeback or fraud. Chargeback literally means the opposite of making a transaction with a customer. In other words, a chargeback is a reversal of a transaction that has taken place, the difference here being that money is deducted from the merchants account rather than the payment being added to the account.

The reasons for the occurrence of a chargeback are many. It may be due to the processor double charging the customer by error. It can be due to the credit card expiration date going over. It may occur due to an error on part of the bank, or even due to disputes made by the customer claiming fraudulent charges. Whatever the reason for the chargeback may be, a merchant always tries his best not to get involved in one. This is because, if a merchant gets too many chargeback’s against his account, then there is a possibility of the merchant account itself being withdrawn. If this happens, you might as well kiss your merchant account career goodbye, because your account will then be placed on a match list with Visa and MasterCard for many years. This means that all merchant account providers will have access to the details of the problem, and if they see that you are a part of the list, they will not issue another merchant account to you, not wanting to get involved in such a scandalous transaction area.

Chargeback’s however, can be eliminated or avoided if proper care is taken while processing online transactions. Some ways to prevent fraud and chargeback’s are:-

• Provide the customer your company name, number as well as email id on then order confirmation page, ensuring that it will appear on the customer’s credit card statement in the next month.
• Your company details should be mailed across to the customer in the same email that confirms their order being placed.
• Address verification can be used to check if the customer is genuine, as people using stolen cards will not be able to provide the address of the real billed owner of the card.
• Order that come from foreign countries especially must be thoroughly scrutinised, as they are the ones most liable to be fraudulent.
• When taking an order, if you feel that there is some suspicion or strangeness, make an attempt to contact the customer via telephone, email to make sure that they are who they claim to be. Do follow ups on orders that may not seem genuine.
• When shipping a product through to the customer, attach the invoice to the shipment, and save a copy of it to produce in your defence in case there is a dispute.
• When taking in orders from customers who use a free email account to place the order, such as Hotmail or Yahoo, make sure you double check on the customer information and card details. Tracking such customers is difficult, as those with email ids from their respective internet service providers will have all their details logged in.

There are many fraudulent claims cropping up all over the internet, and every merchant has to face it at one time or another. The best thing to do to keep abreast of such developments is to be informed of every happening and take the necessary precautions.

       Setup a credit card processing merchant accounts to accept credit cards today!