LINKS

"
THE LOWEST RATES...
MOST BUSINESS TYPES...
WE SAY YES WHEN
OTHERS SAY NO...
7 DAY APPROVAL...
NO HIDDEN FEES...

"

 
 
1.800.393.3230
 
 


   

HOW TO AVOID CHARGEBACK’S FOR ECOMMERCE MERCHANTS IN ADULT TRANSACTIONS

Chargeback is every merchant’s nightmare. When a chargeback occurs the merchant has to pay back the entire transaction amount to the cardholder, pay a chargeback fee to the bank and in most cases, he will not get his merchandise back. Chargeback’s can occur due to credit card fraud or because the customer is not happy with the service or product.

The only victims of this process are the poor ecommerce merchants. Since, the merchants are penalised heavily for something which is not their mistake the only way out for them is: to reduce or eliminate it, by taking some steps.

The reasons for chargeback’s can be divided in to two broad categories:

1)    Customer Chargeback’s: here the customers file for chargeback’s because they are dissatisfied or their card is charged twice for the same transaction and so on.

2)    Fraudulent Transaction chargeback’s: here the chargeback’s occur because of a fraudulent transaction in a customer’s credit card.

Preventing or reducing chargeback’s because of fraudulent transactions includes implementing security mechanisms like “SSL Secure Order Form”. These can also be supplemented with additional security mechanisms developed by MasterCard and Visa.

Other tips to reduce chargeback’s are:

1)    Always make all the fields mandatory.

2)    Don’t accept credit cards which are expired.

3)    Overseas addresses are high risk business which is most probably a fraudulent transaction.

4)    Look out for customers who are willing to pay a lot more to get their product quickly.

5)    Verify all orders by email or phone. If this isn’t possible then choose those orders amounting over a certain threshold.

6)    Use address verification services that is provided by the bank. This is a fool proof plan because all fraudsters will use a different shipping address than the address mentioned there.

7)    Having a locating system using IP address will come in handy when you are dealing with chargeback’s.

8)    You should ask the cardholder to key in the 3 digit security code printed on the back side of your credit card, right next to the signature.

9)    Spend a little more time per transaction to find any suspicious information like abnormal names, telephone numbers or emails.

10)  Spending five minutes per transaction to talk to the client will eliminate any chances of fraud.

11)  Choose your processor carefully.

12)  Make your customer’s aware of how credit card fraud works, so that they can also help you to fight against it.

In the year 2006, over a million credit cards were stolen. Therefore, taking these steps will protect your business from chargeback cases.

The fate of those ecommerce merchants, who face several chargeback’s per month, is not good. Either their processor will terminate their account and give the TMF status to them or in the worst case, the merchant would have lost so much that he will not be able to run his business any more and is forced to close it down.

Once you get the TMF status it is difficult for you to get another merchant account from another provider. Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.