Common Chargeback Claims

Most chargebacks originate from fraudulent transactions and customers who make the claim of never receiving the items they purchased or even making a purchase at all.  Because many of the credit card policies today are designed in favor of the consumer, as the merchant, you are generally required to pay the costs of the merchandise along with a penalty fee for the chargeback.  This may occur whether the claim is legitimate or not.  Merchant account providers having varying fees on chargebacks, typically factoring in the percentage of total monthly sales as well as your history of incurring such claims.  So what is an online merchant to do in this seemingly no-win situation?  Fortunately, there are several proven methods for minimizing the frequency of these claims and dramatically reducing their overall impact on your bottom line.

Obtain Your Merchant Account from a Reputable Provider

Chargeback defense starts by selecting a reputable merchant account provider for your business needs.  Sadly, a large number of companies have blemished the market by delivering less than stellar support and pouring salt into the wound with hefty penalties and astronomical fees.  Therefore, when choosing your merchant account provider, it is imperative that you learn more about their policies in regard to chargebacks.  Keep in mind that not all providers are the same but the more reputable ones will be willingly to help you resolve matters and only charge moderate fees.

Select a Dependable Payment Processing Solution

When choosing your payment processing solution, put strong emphasis on a service that provides efficient, state of the art security mechanisms.  Though a solution equipped with SSL encryption would be a good start, you also need to have something in place that ensures the legitimacy of credit card purchases to protect your business from fraudulent transactions.  AVS (address verification) and CCV (credit card verification) are two viable anti-fraud features that should be applied to authorize all purchases on your site.

Stay on Alert

The best way to fight chargebacks is to remain proactive and look for signs of suspicious activity.  Keep an eye out for inconsistency in the usual ordering logic and customer behavior.  If you start to suspect that something is not right, further investigate the matter to determine if fraudulent activity is occurring.  Whether it is something fishy with a home address, email address, IP address or phone number, whenever in doubt, take the necessary actions to find out what is going on.  Like most offensives, one of the most effective ways to deal with chargebacks is prevention.

]]> http://webhostinggeeks.com/blog/2009/08/14/chargeback-defense-strategies/feed/ 1 http://webhostinggeeks.com/blog/2009/07/17/securing-your-business-website-in-three-easy-steps/ http://webhostinggeeks.com/blog/2009/07/17/securing-your-business-website-in-three-easy-steps/#comments Fri, 17 Jul 2009 17:29:27 +0000 CommunicateBetter http://webhostinggeeks.com/blog/?p=428 Whether it’s the local shopping market, airport or online, thieves are lurking and just waiting for you to make a critical mistake.  In fact, much of the internet community is in a state of panic as data theft is at an all-time high.  Credit card numbers, bank account information and identities are being stolen from companies who don’t know how to properly secure their website and transactions.  Assuming you don’t want to be the next victim, we have provided three simple tips to keep you one step ahead of the attackers.

1.) Make Use of Encryption

In order to protect the monetary transactions occurring on your site, you at least need to have an SSL certificate with no less than 128-bit encryption.  This security tool can be installed and managed by a third-party vendor such as VeriSign or you can choose to handle the configuration yourself.  What SSL does is scramble the data being sent over the internet in a code that is unreadable to hackers.  Thus, when sales on your website are made, the financial details of your customers is encrypted, securely transmitted and then decrypted by your payment processor.  By placing an SSL certificate seal on your website, you can calm the nerves of consumers and encourage them to shop your store in confidence.

2.) Check Your Buyers

Although you don’t want to look as if you are suspicious of everyone, the prevalence of credit card payments increases the probability of a customer using someone’s financial information without their knowledge or approval.  To minimize situations like this, you should check the identity of your customers.  This can be done by not only obtaining their name and credit card number, but also their home address, telephone numbers and the security code located on the back of the actual credit card.  By doing so, you can better assure that the financial details submitted actually belong to the individual making the purchase.  If the card comes back as stolen, you could end up playing a role in helping authorities track down the criminal.

3.) Research Your Merchant

To ensure that financial information will not be stolen following the transaction, it is imperative that you run a thorough check of the merchant account provider processing your credit card payments.  You can start by reading reviews to learn if they have a history of fraud or security issues.  Don’t hesitate to speak to the company directly about the security measures they employ and most importantly, to make sure you are completely confident in their services.  If you have any doubts about the provider, follow your instinct and move on to the next option.

Security is a hot topic in seemingly every industry these days.  If you are using the internet as a medium for your business, these certainly are not times when you can just sit back and simply hope for the best.  Hackers and their attacking mechanisms grow more advanced everyday, so it is critical that you take the appropriate actions to keep both you and your customers out of harm’s way.

How Much Will it Cost?

For the most part, merchant account providers will charge you a fixed rate per month along with a certain percentage for each sale.  Keep in mind that there may be other fees as well.  When dealing with a reputable provider, these fees will be for maintaining your shopping cart, verifying customers, processing monthly statement, etc.   Having a merchant account is vital in the realm of e-commerce as most consumers today prefer to shop online with their credit cards.  If you can’t accept this form of payment, you may as well not even open up a storefront.

How Can I Get One?

When searching for a merchant account, you will find that most providers are pretty reasonably priced.  The catch is that you must qualify.  Some of the qualifications for a merchant account include background checks, credit checks and proof that you are actually running a legitimate business.  Additionally, some will require that you commit to their service for a certain amount of time and charge cancellation fees for breaching the contract.  Others do not have stipulations and will allow you to part ways at any given time without taxing on fees.  This is why it is very important to look into a particular merchant account provider before deciding on a service.   As with most web-related processes, it is best to find a company that is in good standings and has been in the industry for a while.  This gives you better assurance that the provider will be around and won’t cause you to miss out on crucial sales.

What Should I Look For?

When comparing merchant account providers, don’t hesitate to grill them with hard questions.  One thing you definitely want to known is the estimated time frame for depositing funds into your account following a sale.  Retail sales generally do not take long to process, therefore, there is no need to wait an ungodly amount of time for your money.  You should look over the merchant account contract with a fine-tooth comb because the sooner you get paid, the better.  Always keep your eyes peeled for all the standard charges such as monthly fees, setup fees and cancellation fees if they apply.  You also want to look for any hidden fees that might deduct from your bottom line.  After all the fees have been tallied, you should then calculate the overall cost of service to find out if this solution actually works for your business.

A merchant account is a vital tool in the world of e-commerce and when signing up with the right service, you will find that it can save you noteworthy fees in comparison to a service like PayPal.   The key is finding a reliable provider that is going to be around and won’t try to nickel and dime you to death.