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MANUAL WAYS OF REDUCING FRAUD TRANSACTIONS AND CHARGEBACKS FOR REPLICA MERCHANT ACCOUNTS

99.9% of chargeback’s occur due to credit card fraud. Chargeback’s can hurt your business to the extent of making it bankrupt. Therefore, reducing fraud, resulting in reduction in chargeback’s should be given high significance.

Reducing fraud credit card transactions is not an easy job for the ecommerce merchant. There are several automatic methods to check fraudulent transactions; however this will not guarantee 100% protection because the fraudsters will find new ways to get past the automatic security cover. The highly advanced anti-fraud systems are extremely expensive and complex to implement.

One of the most effective methods to prevent fraud is: to manually check and confirm the credit card details given by the customer.

The 5 simple steps to achieve complete protection against fraud are given below.

Gathering Information

This is the toughest part of the process. A stolen credit card number is enough to dupe e-commerce merchants. Therefore, these numbers should be kept very safely to prevent fraud. Inform your customer’s about the dangers of giving their credit card numbers to other people.

Recognising Information

This part will not affect the online merchant. The success of the fraudster depends on the details that he possesses.

Testing Credit Card

This involves the process of “test” or “bogus” order. The fraudster will first engage in a small sized online transaction to check if it works. To prevent this, the online merchants must be very attentive to the credit card numbers which are used to make purchases of goods that are less than $5. These payments must be highlighted and the online merchant should call the credit card holder and verify the order. This will also help the cardholder to block his stolen credit card. If transactions are interrupted or cancelled, then the online merchant should track it. If a customer cancels an order and places a more costly order, then the online merchant should thoroughly investigate the order.

The So called Drop

This is the shipping address where the fraudster will receive his goods. This will always be different from the address mentioned in the cardholder’s actual accounts. If the online merchant finds out that the address of the cardholder according to the records and the shipping address are not the same then, the transaction is most likely a fraudulent one.

However, in case of services this advantage is not there for the merchant. However, the merchants can ask for the address details and compare them.

Making a Transaction

This is the last step in the transaction. Fraudsters, mostly, choose the most expensive shipping method because it is the fastest one. This should ring some bells for the merchant and he should contact the cardholder for confirmation. Also, order values of over $500 must be verified immediately. Also, the time of placing the order should be monitored and verified if found suspicious.

The bottom line is: verify the online orders by calling the cardholders. Online merchants will think this is waste of resources, but if there is a fraudulent transaction and the customer applies for a chargeback then it is you who will suffer the most. 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.