How To Turn False Positives Into Positive Sales

Jul 22, 2016

At the recently held CNP Expo in Orlando, Florida, false positives were among the most talked-about subjects. Attendees were also highly interested in issues concerning measuring and preventing negative impacts on legitimate customers from companies trying to prevent fraud.

Fraud Prevention

In the past few years, more advanced fraud prevention systems emerged to ensure fraud can successfully be fought. Still there are many legitimate customers who are being wrongfully declined by those systems.

With years, fraudsters have developed certain behavior to look more legitimate. On the other hand, there are real customers who use their own cards for orders that seem risky. As a result, some fraud orders get completed successfully, while some legitimate sales get held for several hours or just canceled. This could not only lead to the loss of the immediate sale, but also to customer retention.

It is critical for merchants to find a reputable payment processor like eMerchantBroker to apply for a reliable merchant account for their company. EMB, #1 high risk processor in the US, boasts an A+ rating with the BBB and offers unmatched protection to prevent fraud and reduce chargebacks.

The Impact of False Positives on Your Business

Identifying false positives is the biggest challenge to deal with. If fraud orders are not canceled, they usually result in chargebacks. False positives, however, are always revealed.

It is important to note that not all companies alert the fraud department even if a customer contacts them to ask about the cancellation and prove his/her legitimacy. Below you can find the best practices some merchants apply to identify and measure the impact of false positives on their business:

  • Work with Customer Service to forward customers’ calls to the fraud team. Do this either at the time of the call or flag and get back to the cardholder later.
  • Prepare a Report on Customers whose orders were canceled because of fraud but who placed a 2nd order during the next week that was not canceled due to a suspicion of fraud.
  • Have the Fraud Team’s Senior Member Review The 2nd order should be canceled if it was fraudulent. The customer should be added to a white list and the volume should be tracked to figure out the false positive rate.
  • Have an Additional Fraud System or some other additional means to review the orders that were canceled. Do this for a certain period of time to find out if those orders were truly fraudulent.

 

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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