TIPS FOR MERCHANTS TO IDENTIFY AND FIGHT CHARGEBACK FRAUD

Feb 20, 2016

Merchants may have difficulty identifying and preventing credit card chargeback fraud. Steps below will help merchants detect chargeback fraud and prevent it.

  1. Know Your Risks Better

Online merchants can’t see the credit card being used and check the identification or signature of their customers. Understanding your risks and knowing the degree of your vulnerability will help you track fraud.

  1. Use Verification

To prevent fraud, you should use all available verification components related to a transaction. Ask for identification if the card is present, and if not, take other steps.

For credit card transactions, the billing address should match the credit card billing address. As for the shipping address, it can be different, but, at least, the knowledge of the billing address should be available. Without this verification, the transaction can’t be approved.

  1. Detect Unusual Activities

Find out if there is anything unusual. This refers to high-volume orders or a large amount of expensive items of the same type/brand. If the billing and addresses are different, contact the customer to verify the transaction. Make a threshold and ask for a signature on the package for shipment having more than the amount set.

  1. Stay In Touch With Your Processor

Payment processing companies have the necessary resources to help you fight fraud. They can offer enhanced security and means to verify transactions. Make sure you are using the advanced services to prevent fraud. With EMB, you can enjoy the latest merchant chargeback protection and prevent chargebacks.

  1. Don’t Neglect Notification Codes

Chargebacks received have a reason code that varies based on the card network. Each code indicates the reason for the chargeback like “counterfeit magnetic stripe” or “fraud, card not present environment.” As soon as you have this code, look for irregularities associated with the transaction.

  1. Pay Attention To Nonfraud Chargebacks And Declines

Scan not only your reason codes for fraud but also other reason codes and decline rates. High decline rates may indicate a fraud problem. Some codes may signal that transactions aren’t recognized by customers.

If these codes come across regularly, turn to your credit card processing company. If possible, add a telephone number to the descriptor. This will help customers contact you easily in case they need help.

  1. Turn To Your processor For The Information You Need

MasterCard issuers must report fraudulent transactions to SAFE (the System to Avoid Fraud Effectively) at least on a monthly basis. Reports for issuers and acquirers are generated by SAFE. Then, other merchant audit, risk management and security programs receive data from the system.

Credit card processing companies can access this data. Ask your processor to provide the information you need.

  1. Provide Verification Records In Time

When your bank asks for verification records related to chargeback, don’t fail to provide them in time. In-person transactions may require terminal records, signatures, and more. Online transactions may require address and CVV verification, IP address information, and product delivery records.

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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 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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