FRAUD & CHARGEBACK TIPS

Fraud Tips

• Collect CVC2 and CVV2 verification numbers. According to Visa this can reduce chargebacks by 26% and can reduce any pass-through fees that may be charged when a credit card order is conducted. On the back of MasterCard and most Visa and Discover credit cards is a 3-digit security code located right after the credit card number. American Express cards also have a similar security code that is located on the front of the card right above the cardholder's account number and is usually 4-digits long. The majority of online payment processors support entering security codes when processing credit card orders. This is an extra security measure that merchants can take that will help prevent against fraud.

• Use Address Verification System (AVS). AVS checks to make sure that the address entered on an order form is the same as the address that the cardholder's billing statements are mailed to. People using stolen card numbers will never use the real cardholder's billing address on an order form. Merchants should be cautious of orders with differing addresses *Using AVS will lower processing fees. However, AVS only works with orders that are conducted in the US.

• Be cautious of orders from foreign countries. A large majority of fraudulent orders come from places like the Middle East, Asia, and Africa. Merchants who are victims of fraud are usually out at least the first $50 of the fraudulent transaction. Orders that are for large amounts, pay a lot for next day shipping, or are for several of the same expensive item need to be handled with caution because there is a greater likelihood of fraud.

• If a sale seems “too good to be true” it just might be, contact Fidelity before shipping, we can help validate the legitimacy of the cardholder info for you.

• Call Fidelity today at 1-888-847-2627 to learn more about Preventing Chargebacks.

Best Practices for Reducing Exposure to Chargebacks

Chargebacks happen for a variety of reasons and can cost merchants a lot of time, money and even their merchant account. Here are a few simple tips to help you reduce the amount chargebacks you receive.

• Be clear about refund and return policies. Make sure that the conditions of the sale are written on the receipt near the customer’s signature and that they receive a copy of that receipt. Also display your refund and return policy near the register in a place that all your customers will be able to read.

• Respond to inquiry letters as soon as possible. If you wish to dispute a customers claim all materials needed to resolve the issue should be sent by the date displayed on the enquiry letter. Even if the customer is wrong, if the merchant doesn’t reply to a dispute on time they are usually liable for the funds.

• Let customers know what name will appear on statements. Many merchants who use 3rd Party Processing companies have run into problems because the company name that appears on cardholder's monthly statements is usually the name of the 3rd party processing company and not the company name of the site the cardholder made their purchase from. This isn't always the case, but it is common.

• Take an imprint of the credit card. In instances where a cards magnetic stripe is unreadable or for delivery orders, making an imprint of a card is proof that the card was present and should be kept with your records of the transaction.

• Collect signatures upon delivery. You can use carriers that require signatures for delivery and allow you to also have a copy. Always retain these in your records.

• Request a copy of identification and credit card. Always see identification for face to face transactions, but you can also request to have a copy of an I.D. and credit card faxed to you. This works best when it is a business to business transaction.

• Never charge the card until goods are shipped. If the goods are not yet ready, delay charging the card until such time as the goods are ready and sent.