What are some best practices to avoid chargebacks?

Helpful guidelines include:

  • Let the buyer know what he/she is buying. Describe the item that you are selling in as much detail as possible and as accurately as possible. Include pictures, measurements (if applicable), and other relevant specifics;
  • Know your customer. Do as much as you can to know your customer and to respond promptly to any customer service requests. Keep as much information as you can about the transaction and your customer, including any emails or other correspondence;
  • Publish your returns policy on your website and in email correspondence with your customer. Please note that in certain countries, laws and credit card issuer policies may provide for buyers to have chargeback rights for merchandise that is not delivered or is defective, even if your policy indicates that all sales are final and that you do not allow returns.
  • Ship to the buyer's address as listed on the Transaction Details page and retain proof of delivery that can be tracked online;
  • Confirm the receiver’s identity. Use the details captured with the order and verify with an identity document.
  • Let the receiver sign for the delivery. Do not deliver without acknowledgement of delivery. If the correct recipient is not present, do not deliver goods to relatives, friends, neighbours, employees, servants or any one else. Proof of receipt of goods is required should the cardholder dispute a transaction.

Be alert for order with these characteristics

  1. Incomplete information: Begin taking a few extra steps to validate each order. Don’t accept orders unless complete information is provided (including full address and phone number - do not accept cellular phone numbers only).
  2. First-time shopper: Criminals usually hit a merchant once and don’t go back a second or third time.
  3. Larger-than-normal orders: This requires knowledge of what a “normal-sized” order is. Because they may be using stolen cards or bogus account numbers that have a limited life span, criminals need to maximise the size of their purchase.
  4. Orders consisting of several of the same item. As these items are intended for resale, having more of them increases the criminal’s profits.
  5. Orders made up of big ticket items. These items have maximum resale value and therefore maximum profit potential.
  6. Orders shipped “rush” or “overnight”. Criminals want these fraudulently obtained items in their hands as soon as possible for the quickest possible resale and aren't’ concerned about extra delivery charges.
  7. Orders shipped to an international address. A significant number of goods from fraudulent transactions are shipped to bogus cardholders outside the country.
  8. Transactions with similar account numbers or email address.
  9. Transactions on multiple cards, but the orders are shipped or dispatched to a single address.
  10. Multiple transactions on one card over a very short period of time: This could be an attempt to “run” a card until the account is closed.
  11. Multiple transactions on one card, but multiple delivery addresses.
  12. International card number(s) used for local delivery addresses (you will see the country next to the partial card number).
  13. Local card number(s) used for international delivery addresses.
  14. Different “bill to” and “ship to” addresses. Be wary of orders with different bill to and delivery addresses.
  15. Syndicates focus their activities on enterprises specialising in certain merchandise, e.g. cell phones and computers: Their method entails phoning the specific business and ordering certain articles followed by a fax in which they give permission that a credit card may be debited. Counterfeit credit card details or stolen cards are provided and in some cases copies of the front and the back of the card are also faxed to the merchant with an ID or passport number. During the whole transaction the cardholder remains “faceless” and courier services are used to collect and deliver the merchandise. No physical delivery address is provided.
  16. Hotmail or free e-mail addresses: These addresses can’t be tracked back to the real owner. The customer must provide an ISP or domain based address. Try not to accept any orders originating from a free, web-based or e-mail forwarding address. Install filtering software that rejects orders coming from different free e-mail services. Since there are so many free e-mail services, how do you know if the order you receive is from one of these free e-mail services?
    1. Check the e-mail address for a real IP. You may do such an address check by going to a browser and putting www in front of the domain.
    2. When in doubt call the phone number (remember don’t accept cellular phone numbers only) listed on the order and confirm the order.
      What precautions should you take with orders from free e-mail accounts?
      • Send an e-mail requesting additional information before you process the order.
      • Ask for a non-free mail address, the name and phone number of the bank that issued the credit card, the exact name on the credit card and the exact billing address.
      • Often you won’t get a reply. If you do, verify the information.

Learn more by downloading the MonsterPay Avoiding Online Fraud Guide

Related Topics:

  What is a chargeback?

  How can a seller recover funds when a chargeback occurs?

  Why am I charged a R150.00 fee for chargeback settlement?

  How exactly do MonsterPay and the seller work together to dispute a chargeback?

  Why can chargebacks occur so long after a seller receives the payment?

  How does MonsterPay notify a seller when a chargeback has been filed against them?

  What information can a seller provide to increase the chances of winning a chargeback dispute?