Your Work Team Must Be the Fraud Team

Dec 01, 2015

E-commerce fraud has exploded over the last decade. Innovations in card technologies has given consumers a defense against card present crimes at POS. However, card-not-present protections have been adopted slowly by online companies. Most of these companies don’t have dedicated fraud teams or individuals. As a result, companies must ensure that all associates, especially managers, be able to identify and deal with fraudulent behavior.

One growing type of fraud is chargebacks. This occurs when a customer claims a purchase was made without their knowledge, have received the wrong product, or didn’t receive a particular product. Although these claims are possible, in many cases this is a method that fraudsters use to get their money back for items still in their possession. Oftentimes merchants are not notified when a chargeback occurs. So scammers get their money back and merchants lose a sale and are penalized for the chargeback. This can be crippling to a small business.

As point-of-sale fraud becomes more difficult, CNP fraud is predicted to rise. This is based on patterns observed in Canada’s EMV migration between 2008 and 2013. During this time period, counterfeit and lost/stolen fraud dropped by 54 percent, but CNP fraud jumped 133 percent.  E-commerce experts estimate that every dollar in fraudulent transactions could cost a merchant approximately $3.08. If a chargeback occurs, good credit card processors will not release a refund until the merchant can investigate.  Luckily there are some actions merchants can take to successfully dispute fraud.

When defending against chargebacks, merchants must have a good analytics program to capture time, locations, the IP address, and other information on the website. To combat accusations of sending out the wrong merchandise, take photos or videos of high ticket items that clearly show the shipping address. Also use written procedures that include how items are packaged, insurance information, and a timeframe for delivery confirmation.

The eMerchantBroker Chargeback Suite

As CNP grows, merchants must invest in merchant chargeback insurance. eMerchantBroker offers Chargeback Shield to monitor suspicious activity, notify businesses when chargebacks occur, and give them the tools to track suspicious activity and fight chargebacks. EMB chargeback suite reduces the amount of chargebacks by 15-30% per year.

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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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