Merchants Trying to Distinguish Fraud from Legitimate Pandemic Purchases

Jun 29, 2020

Since the COVID-19 lockdowns began, shopping habits have changed dramatically. Consumers are turning to online shops to purchase everyday items like groceries, medications and other basic supplies that people would normally purchase at their local, physical store. The uncertainty around the situation has also led to panic buying and larger volume purchases than previously seen before the pandemic.

This has presented merchants with more than one challenge. They have had to shift to remote work environments to ensure the safety and health of their teams. They have had to deal with delays in supplies and materials, adjust their payment processing options and provide new services like delivery and curbside pickup. And they have also had to deal with more fraud.

Fraud? Or Legitimate Online Purchases?

As the frequency and volume of online shopping has drastically increased, it has become difficult for merchants to distinguish between their good and loyal customers and the attempts of fraudsters. So, how can merchants tell the difference as these out-of-character buying behaviors become a new “quarantine norm”?

While there are still many things that point to fraud even during the pandemic chaos (identity attribute mismatches, burner phones, throwaway emails, etc.), merchants are having to be even more cautious and watchful of other key indicators. Here are a few best practices merchants should try to mitigate fraud online purchases and ensure a seamless customer experience:

  • Evaluate customer contact details, such as name, phone, email, etc. Using data from multiple sources is the best way to find unique markers and ensure there is an actual human behind a digital identity.
  • Always pay attention to and analyze new patterns as they emerge. This will shed some light on why customers come to your platform, resulting in fewer chargebacks and an improved customer experience.
  • Work with a payment processor that can help you mitigate risk. A reputable provider like EMB will provide you with the tools, resources and support you need to prevent and manage chargebacks.

Prevent and Manage Fraud and Chargebacks with EMB

EMerchantbroker.com has created a system that helps merchants break the stressful chargeback cycle and focus on running their business. EMB has partnered with Verifi and their new Cardholder Dispute Resolution Network (CDRN), as well as Ethoca’s alert system to give merchants direct control over resolving credit transaction disputes. By offering merchants both chargeback resolution networks, you can achieve the highest rate of chargeback resolution.

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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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