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10 Ways to Reduce Chargebacks & Fraud
Merchant concern about online credit card fraud and
chargebacks is rising at a significant rate. According to the
2001 Online Fraud Report, conducted by Mindwave Research, it
revealed that, "41% of merchants say the issue of online
credit card fraud is 'very serious' to their business." As e-
commerce continues to flourish the number of instances of
credit card fraud and chargebacks will continue to mount
higher. It should go without saying that the need to take
certain measures to reduce and virtually eliminate
chargebacks and fraud is certainly paramount.
Here are some ways you can greatly reduce the instances of
chargebacks and fraud, even potentially eliminate the risk
altogether:
#10 Interactive Voice Response (IVR) Terminals
IVR Terminals, developed by VoiceStamps
http://www.voicestamps.com, are a relatively new solution
that greatly reduces chargebacks and fraud by collecting a
"voice stamp" or voice authorization and verification from the
customer before the merchant ships the order. The voice
recorded order verification is then automatically e-mailed to
the merchant for filing in the event the customer tries to
dispute the charge on their account.
#9 Collect CVC2 and CVV2 Verification Numbers
This tactic alone can not only reduce instances of chargebacks
Marketing CampaignsCopyright 2005 Andy Murray Affiliate programs (also called Referral Programs or ..... by 26%, according to Visa, but also reduce any pass-through
fees that may be charged when a credit card order is
conducted. On the back of MasterCard, most Visa and
Discover credit cards is a 3-digit security code located right
after your credit card number. Requiring customers to give the
3-digit code acts as an additional verification measure.
American Express cards also have a similar security code that
is located on the front of the card right above the cardholder's
account number and is usually 4-digits long. Most online
payment processors support entering the security codes when
processing credit card orders. Check with your payment
gateway provider (i.e. Verisign, Authorize.Net, ECHO Inc., etc)
for details.
#8 Use Address Verification System (AVS)
AVS checks to ensure the address entered on the order form
matches the address to where the cardholder's billing
statements are mailed to. People ordering products and/or
services using a stolen card number will never use the real
cardholder's billing address, so this is your chance to stop the
order before it's too late. AVS only works with orders
conducted in the US. Failure to use AVS when processing
credit card transactions will always result in paying higher
credit card processing fees.
#7 Scrutinize orders from developing foreign countries
OikonomianOikodomian Terry Dashner''''''.Faith Fellowship Church PO Box 1586 Broken ..... A large percentage of fraudulent Internet purchases are made
from Indonesia, Russia, and other eastern block or developing
countries. Accept orders from such countries at your own risk
until a worldwide AVS system is developed.
#6 Let customers know what name will appear on statements
Many merchants who use 3rd Party Processing companies have
run into problems because the company name that appears on
cardholder's monthly statements is usually the name of the
3rd party processing company and not the company name of
the site the cardholder made their purchase from. This isn't
always the case, but in many cases it is. If you use a 3rd
party processor, and even if you don't, make sure the
customer knows what name will appear on their credit card
statement at the end of the month. This will help to reduce
any confusion that might would otherwise occur.
#5 Handle suspicious orders accordingly
If an order seems suspicious the best way to handle the
situation is to either call or e-mail the customer and attempt
to verify that they placed ......
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