It can be difficult to stop someone from attempting friendly fraud. However, you can reduce the chances of it resulting in a chargeback by streamlining your process for dealing with these situations so it is less of a burden on your business. Any of the tips below may not have a significant effect when implemented alone, but, when combined, the credit card issuing bank will have a more difficult time refuting your challenge.
The first thing you should do when you suspect a case of friendly fraud is to reach out to your customer. He or she may simply not recognize the transaction or another cardholder on the same account placed the order without the other’s knowledge.
Make sure you keep a record of the IP addresses used to place orders on your website. You can use this information to challenge friendly fraud chargebacks as part of your support evidence. For example, if the IP address traces back to a specific town, the cardholder lives in that town, and the package was delivered to that town, then it often casts suspicious back on the cardholder.
For e-commerce merchants in the US, Visa and MasterCard reward business owners who use AVS to check the customer’s billing address against the shipping address. However, merchants everywhere should verify the buyer’s billing address before sending merchandise.
You should also use a delivery service or courier service that requires a signature upon delivery. This provides order tracking information and delivery confirmation. Additionally, you should always require the signature of the cardholder only upon delivery.
Although you cannot store a cardholder’s security code, you can still request this three or four digit numbers to help validate the card is in hand at the time of purchase. Decline all transactions that provide invalid card security codes as well as use this detail in approved transactions to help you win cases of friendly fraud.
It is helpful to save all documents and communication between you and the cardholder. They will often reveal all sorts of personal information during phone calls or emails that can help you win a chargeback dispute. This is why it is important to record customer service phone calls or make notes directly after the call ends.
Lastly, clearly define your return policy on your website. Make sure it includes any product guarantees as well as a phone number at which customers can contact you. Also, display your return policy in your terms and conditions as well as on your checkout page.
For more information about chargebacks and fraud, visit our new site at www.Instabill.org.