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Fighting Ecommerce FraudThe media never cover this, but it's you, the vendor who really gets hurt by credit card ecommerce fraud. The cardholder's loss is nothing. But the vendor who gets hit with that fraud loses the whole amount.
How serious is it? Is
it something you should be really worried about?
Consider this example: You sell a $2,000 gaming computer system. But the card was fraudulent. Now you're out the $2,000 worth of equipment, the thief has the computer system, and the owner of the stolen card is out nothing. Plus, you now owe a penalty fee to your merchant account processor! And if it happens enough, you may lose your merchant account! But wait, you say. I got an authorization number. So I'm good. Please. That only means the card hasn't been reported stolen and that the card isn't over the credit limit. Which is just another way of saying, it means very little. Plenty of credit card numbers are stolen without the owner of the card ever realizing it until the charges end up on their bank statement. And who is to say a stolen card is more or less likely to go over the spending limit? So the bottom line is: Verifying the credit card order is your problem. The best way to verify card information is with a third-party system, such as precharge. Services like this bundle services that go beyond the basic ecommerce fraud detection that will come with your merchant account. In addition, watch for these red flags:
But if the order is expensive (in comparison to your average order) and it raises one of these red flags, don't hesitate to call the cardholder before you ship the items. Most customers will appreciate the extra caution. Return to the article "Avoiding the Dreaded Chargeback"
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What is inexpensive?!An inexpensive merchant account is...
Competitive pricing:*internet/mail/phone2.25% discount rate 25 cent transaction fee Retail (face-to-face) 1.85% discount rate 25 cent transaction fee Gateway fee $17 month Statement/service fee $10 month If you are considering several merchant accounts and the prices are in this range, stop using price to compare. It's time to compare service, support, features, etc. Look beyond price.
*These rates are taken from Charge.com.
Thank you thank you thank you!This site is just what the doctor ordered. Thanks for keeping me from makeing [sic] a big mistake! James Adair, |
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