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Protect Yourself from Chargebacks

Here are some suggestions to be considered in order to avoid chargebacks caused by online transactions:

  • Make sure that the same card is not used in a short period of time for numerous and different orders.
  • Check out if delivery address matches the country where the credit card has been originally issued. Preventing fraud is up to you. No matter you sell high or low-cost services/products a charge back can cost you a lot. You are to decide how much risk you are going to take in case you cannot verify your customers.
  • Be cautious with orders of large amount of goods, especially if there is no specification for color, size, model or cost. This means that the buyers have no intention to pay. Verify suspicious orders!
  • Have your customers confirm the orders. Call them to assure they are not trying to obtain goods fraudulently.
  • Find out more about your customers before finalizing any transaction. Consult companies that list customers with chargeback habits.
  • Be cautious of foreign orders.
  • Don't accept card payments unless you have obtained a signature at the time of the sale. A delivery signature will help you in case of any dispute and it will give you a better chance of winning.
  • Respond immediately to legitimate complaints (at least within 48 hours) and try to reach a resolution. This will prove you respect your customers and that you are always willing to improve your business and client relationship.
  • Make sure the name of the product on your website/mail-order/advertising coincides with the name that appears on the customer's bill. Chargebacks procedures may appear if the customer doesn't recognize the name of the requested product. For instance, if a customer buys from "Macy's" and the charge on the statement says "Macy's Utility Store" he or she may charge back the purchase before realizing the product is delivered by the same source.
  • If you are in doubt of the transaction, ask the customer to send you a copy of the credit card in order to verify its authenticity. Also remind him/her to cover the credit cards numbers when the copy is sent.
  • Deliver your products as soon as possible. This may prevent you from possible chargebacks from the client caused by delivery dissatisfaction or unfulfilled delivery.
  • Do not release goods to a third party, such as a taxi drivers or messengers, allegedly sent by the cardholder.
  • Arrange delivery through registered or reputable carriers.
  • If you are delivering by ground carrier, instruct your delivery agent to obtain a signature as you may be asked for this information if the transaction is charged back to you.
  • Don't allow the carrier to receive instructions to change the delivery address.
  • Keep records of all sales and receipts of orders and delivery fulfillment. Customers may charge back up to 180 days, so invoices and sales drafts are your best defense Sometimes only the card number is provided in a charge back (MasterCard and Visa), and you need to discover the customer's identity.
  • Pay attention to Discover and American Express credit cards when a transaction is solicited. For these types of cards there is no chargeback fee requested.
  • Use software to check addresses against high risk areas (e.g. blocks of flats).
  • Use fraud detection tools when involved in any type of credit card transaction sale ( For example Address Verification Service, Card Verification Value. For more details, please visit http://usa.visa.com)

In case you have any reason to believe a charge is fraud, call in a "CODE 10" authorization. This will alert the voice call center that you suspect fraud. The authorization center can verify if the card is stolen, or the card holder's authenticity.


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