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COVER STORY
34 Reduce Credit Card Chargebacks
warns that those losses are still considerable, adding that merchants end up rejecting international orders three times more oſt en than domestic ones. Just as the post offi ce warns to be wary of packages from suspicious international send- ers, so too, should merchants use caution when processing international orders. Customers from nations like the U.K., France, Australia, and Japan are more likely to be legitimate than those from still emerging nations in Eastern Europe, Southeast Asia or Africa. Of course, fraud exists everywhere. Many developing nations do not yet have an AVS system in place, increasing the risk to merchants. Simply put, if you have doubts about the legitimacy of an order, it’s probably best to decline the order with a courteously worded let er.
Merchants should
clearly state what name will appear on a customer’s bill.
According to a recent survey by ClearCommerce, which
provides fraud detection and payment processing solutions, the top 12 international sources for online fraud are Ukraine, Indonesia, Yugoslavia, Lithuania, Egypt, Romania, Bulgaria, Turkey, Russia, Pakistan, Malaysia and Israel. T e same sur- vey also showed that the 12 countries with the lowest fraud rates are Austria, New Zealand, Taiwan, Norway, Spain, Japan, Switzerland, South Africa, Hong Kong, the U.K., France and Australia.
Communication Works Both Ways.
Requiring extra identifi cation from customers, faxed copies of credit cards, or signatures upon delivery are all appropriate ways of cut ing down on chargebacks, but companies should be willing to take on responsibility “at home” as well. In addition to making sure that goods and services are correctly priced and customer data is properly entered, merchants should clearly state what name will appear on a customer’s bill. T is may not be strictly necessary if your company is called ABC Clothing, and you bill as ABC Clothing, but
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36
April 2010
if you bill using a diff erent name (ABC Home Goods), or especially if you employ a third party processing company (XYZ Fulfi llment), a customer may balk when seeing an unfamiliar name on his credit card bill. Usually, such misun- derstandings can be easily cleared up, but why put yourself and your customers through an extra process? It’s also a good idea to post warning messages on your
website’s order page. Just as, “Beware of Dog” signs in a window or yard can deter criminals, so too, can strongly worded explanations of what may happen to those look- ing to commit fraud upon your business. Noting that your site collects IP (Internet Protocol) addresses, which can be used to trace back where an order physically came from, is a good deterrent.
Additional suggested online resources:
CyberSource:
www.cybersource.com
ClearCommerce:
www.fi sglobal.com/Products/Check/E-Commerce/index.htm
Federal Bureau of Investigation on Internet fraud:
www.fbi.gov/majcases/fraud/internetschemes.htm
U.S. Department of Justice on Internet fraud:
www.justice.gov/criminal/fraud/internet
Scambusters:
www.scambusters.org
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