So, you’ve received a chargeback—this is good news. Yes, good news—if you choose to see it that way. Essentially, it means that there is room for improvement in your business. It’s an opportunity for growth! Seriously, there really isn’t much better information for a merchant than learning they have a chance to make changes that will result in business improvements. This translates into increased revenue, better processes to implement, and an opportunity for learning.
Rather than looking at the chargeback as negative, view it as positive and a launching pad for process improvements. Effective chargeback management is key to ensuring your business is running at its best. Your response to this chargeback can serve as an opportunity to stimulate an active review of your chargeback policy, customer service practices, sales and authorization process, and your website content.
Chargeback Management First Steps 
Chargebacks don’t need to be part of business, but when they do happen, turn them around and use them to make proactive business improvements. When merchants receive a chargeback, they often either ignore it and absorb the cost or rush into an ineffective chargeback dispute that only results in further lost resources and patience.
Instead, take a step back and remember not to panic. As a business owner, the key is to have a plan in place that allows proactive response and review. This review is essential in understanding how and why the chargeback happened. With this knowledge, an actionable chargeback management process can be implemented.

  1. Why was the chargeback filed?  Review the reason code and accompanying chargeback notification details. Look at how and where the disputed charge was made. Using an intelligent chargeback management solution can aid in collecting this important data. 
  2. Is this a valid chargeback?  Does the cardholder have a valid complaint, or is this an incident of friendly fraud? Use this information to guide the chargeback response, to either dispute or accept.
  3. Customer service review.  Look for holes in communication, ineffective information management, and areas for improvement in customer relations. Remember to review often overlooked details, such as billing descriptors, email confirmations, and refund/return policy.
  4. Get expert help.  Merchants should focus on their core activities—that is, running their business. Partnering with a team of chargeback experts to review your business practices, website, customer service, chargeback history, and customer database can provide the deeper insight needed to pinpoint overlooked weaknesses in the sales and payment process.

Remember, don’t panic. Conduct the four-step review, analyze the information, ask more questions, and then move forward to make improvements and adjustments. This is also a good time to do some extra learning about chargebacks, fraud, and prevention—the more knowledge the better.
Establish a Chargeback Policy
A chargeback policy defines how a merchant manages their business and works to prevent and respond to chargebacks. With this policy in place, it’s possible for merchants to prevent the panic response to chargebacks and instead take a proactive response.
Many merchants don’t have a chargeback policy in place. Again, more room for improvement that can strengthen the business and prevent future chargebacks.
To formalize a chargeback policy, review the following questions and use your answers to create a custom policy. It’s important that merchants do not use another company’s chargeback policy—each business needs to tailor their own chargeback policy.

  • What is your current chargeback response?  Knowing the typical chargeback response practices (ignore, accept, dispute, panic) highlights costly decisions and room for savings.
  • What is your chargeback dispute success rate?  Knowing the chargeback dispute success rate is important in identifying flaws in data management, website content, customer service, and the need for proven chargeback representment solutions.
  • What kinds of chargebacks are being filed?  Knowing the chargeback types can identify if your business is a target for friendly fraud and theft. 
  • Who is buying and subsequently filing chargebacks?  Knowing who your customers are allows the establishment of a rules database and provides warning signs for potential threats.
  • What are the chargeback costs?  Knowing the time, money, and resources being spent on chargebacks supports the decision to what improvements to make, and possibly the need to bring in chargeback experts for a more thorough audit.

Establishing a chargeback policy can be overwhelming for many merchants. Merchants don’t always have easy access to the data required to answer these key questions. This is exactly why it’s important that merchants go through this process: it is another opportunity to make changes that ensure that chargeback risks are detected and future chargebacks are prevented.
When the chargeback policy is created with a clear understanding of what is happening in the business, it’s much easier for merchants to respond rather than react to chargebacks.
Review, Adjust, Refine
Just as you conduct regular reviews of your business model to understand how you can run your business more effectively and profitably, you also need to do the same with your chargeback management.
Knowing the how, when, where, why, and what of the chargebacks being filed against you allows you to make effective chargeback management improvements. One of the most profitable decisions made by the merchants we work with is in implementing a solution such as our Chargeback Revenue Recovery Service.
Prevent chargeback panic with a proven solution that provides you the information you need when you need it. Recover revenue, prevent chargebacks, know your risk areas with proven Verifi solutions.


Strong customer relationships are the backbone of any business. When your customers are happier and more satisfied, the more likely they are to return for more purchases, share social media and word-of-mouth recommendations, and be more tolerant of merchant errors. Yes, a happy customer is more likely to accept or understand merchant errors or missteps.
The key, however, is to ensure that these errors and missteps don’t happen during the first contact with the customer. When this happens, the customer gets a sour taste which can lead to a decline in the merchant-customer relationship, resulting in friendly fraud and chargebacks.
It’s important to refresh your perspective on the fact that customers are human and susceptible to making errors, although there is typically little room for customer forgiveness with merchant errors. This intolerance for mistakes speaks to the need for merchants to focus on improving customer relationships and in making customer service a high priority.
Merchant Customer Service
Most merchants know that proactive and effective customer service is an integral component of a business success plan. However, even with this understanding that customer service is vital to customer retention, business growth, brand loyalty, and reputation-building, merchants often make avoidable mistakes that put them in jeopardy of losing their strong customer base.
Here are some important points that all merchants should adhere to and reinforce with their customer service team:

  • Customer service doesn’t happen once, it’s an ongoing process and relationship, occurring before, during, and after the purchase.
  • Good customer service requires that money, time, and resources be spent on training employees.
  • Consistent revenue depends on customer service, which should be part of internal reviews on how to improve an organization’s fiscal health.
  • Customer service can change a customer’s opinion of a merchant—for good or bad.

So, what does this have to do with chargebacks? Stated plainly, good customer service is a merchant’s first line of defense against chargebacks. The better a merchant communicates with customers to proactively prevent chargebacks from occurring, the better for everyone involved.
Customer Service Practices for Chargeback Prevention
To make things easier for the customer service team and to prevent customer stress and dissatisfaction, merchants would do well to remember key aspects of friendly fraud and chargeback fraud prevention.

  • Order review:  Before finalizing an order, review it carefully to make sure there are no duplicate orders in the system or immediate emails from the customer following the order. Duplicate orders indicate a problem with payment processing that can result in a future chargeback.
  • Clear return/refund policy:  Make your e-commerce return/refund policy clear, visible, and accessible on your website and email confirmation. Many customers want to review this policy before placing an order. If it’s hard to find or understand, the level of trust for the merchant drops. This policy can also be key in a representment case.
  • Move quickly:  In the case of a refund, do this as quickly as possible. Let the customer know the status of the refund and give the customer a chance to speak to someone in customer services if necessary. A slow refund response or no response can compel the customer to file a chargeback out of frustration and lack of information.
  • Be available:  Clearly display customer service contact information on the website (the footer is a good location). Depending on the product or service, a chat window can be useful to immediately answer any customer questions. Respond to emails as quickly as possible and be forthcoming about any issues that may contribute to a slow order delivery, mistaken delivery, etc. Clarity with the customer goes a long way in maintaining a healthy relationship.
  • Shipping options and policy:  Give customers a date or estimated date of arrival. This helps to prevent the customer from filing a chargeback, should they become frustrated because it took too long for the item to arrive. If possible, provide a tracking number and shipping confirmation email to the customer.
  • Contact the customer:  With a proven solution in place, it’s likely that merchants can see when an unexpected or large order has been placed from a customer. When this happens, phone the customer to confirm this purchase. If the order turns out to be invalid, there’s a good chance you’ll prevent an incidence of theft and a subsequent chargeback.
  • Be flexible with the rules:  There are times when it pays to ignore the refund/return or cancellation policy and give the customer the benefit of the doubt. Just as merchants make mistakes, customers do as well. Review the customer’s order history and use your best judgment when deciding how rigid to be in applying company policies.

These recommendations are just a start for merchants who are focused on making customer service a business priority. Each business niche has its own inherent customer service recommendations and standard practices. But the underlying principles are clear: communicate, be available, be responsive, and be personable.
Smart Solutions for Proactive Customer Service
Supporting your customer service team and providing them the resources to be proactive with customers requires access to key customer information. Using a solution such as Verifi’s Order Insight can bridge the knowledge gap, making it possible to develop strong customer relationships that last year-over-year.

Business News Daily, Small Business Solutions & Inspiration

Sales and revenue are falling short. Your company is facing the prospect of downsizing. Your best employee suddenly quits. No matter the circumstances, your team’s morale is at an all-time low, and it’s your job as their manager to lift their spirits and get them back on track.
This is no easy task. It can be hard to see the positive when everything seems to be falling apart. But every company goes through rough patches and growing pains, and it’s during these times that a team most needs a strong leader to help them weather the storm…
To read the rest of the article please click here: https://www.businessnewsdaily.com/10194-lead-through-tough-times.html\


Merchants and acquirers have a unique relationship that is paramount to the foundation of their success. Merchants must be able to accept and process credit card payments and for this they need an acquirer. However, acquirers are expected by the credit card companies, with which they have contracts, to enforce chargeback rules and regulations.
The acquirer is expected to enforce chargeback rules, to monitor chargeback thresholds, and to hold merchants accountable to credit card company-defined business rules. When a merchant meets or exceeds defined Visa chargeback rules (or other credit card company chargeback rules), the relationship with the acquirer can become contentious and costly.
Examples of these rules include specifying how the refund/return policy is communicated to customers, how purchase receipts should be tracked and maintained, and specific chargeback threshold rules and regulations.
The more time and effort the acquirer must spend on enforcing these guidelines and in monitoring merchant chargebacks, the costlier it is for the merchant to do business with the acquirer.
Chargeback Rules Enforcement
Every major credit card company has a chargeback monitoring program, which it uses to hold merchants and acquirers accountable to their business expectations. Depending on the credit card company, there are different types of merchant monitoring and levels of chargeback rule enforcement. (Merchants should review and be aware of these programs.)
For example, to enforce Visa chargeback rules, the credit card company has instituted the Visa Chargeback Monitoring Program. This program is used to monitor merchant chargeback activity monthly, and should the merchant reach defined chargeback thresholds, the merchant’s acquirer is notified of this violation with a written warning. The responsibility for adhering to these Visa chargeback rules then falls to the acquirer.
Visa states in its Chargeback Management Guidelines for Visa Merchants guide, “Merchants should work with their acquirer to develop a detailed chargeback-reduction plan which identifies the root cause of the chargeback issue and an appropriate remediation action(s).”
To help merchants adhere to Visa chargeback rules and thresholds, Visa does include some general recommendations on how to monitor chargebacks, including:

  • Track chargebacks based on reason codes
  • Track chargeback activity as part of the overall sales
  • Track card-present and card-not-present chargeback data separately

These recommendations highlight why it pays for merchants to have a solution in place that allows monitoring and tracking of customer data, sales statistics measurement, and effective chargeback representment.
Visa Chargeback Rules Enforcement
To ensure merchants are adhering to Visa chargeback rules, the company has three programs within its umbrella Visa Chargeback Monitoring Program:

  • Visa Merchant Fraud Program: Per monthly monitoring, the acquirer is notified with a written warning when merchants reach chargeback thresholds. The acquirer and merchant have a defined amount of time to bring chargeback numbers in line, after which time Visa will assess fees and penalties on the acquirer.
  • High Brand Risk Chargeback Monitoring Program: Targeted specifically to high-risk merchants. There is not a notification or workout period for merchants upon reaching chargeback thresholds; the merchant’s acquirer is immediately fee-eligible for its high-risk merchants.
  • Global Merchant Chargeback Monitoring Program: Applies to international merchants. Merchants are monitored monthly with acquirers receiving a written warning when a merchant meets chargeback thresholds. The acquirer and merchant have a defined amount of time to bring chargeback numbers in line, after which time Visa will assess fees and penalties on the acquirer.

Read the Visa Core Rules and Visa Product and Services Rules for explicit details on the time periods, penalties, and thresholds that Visa has defined for merchants and acquirers.
High or Low-Risk Merchant?
When it comes to working with acquirers (and credit card companies), merchants do not want to be labeled as high-risk. Most acquirers and credit card companies have low tolerance for high-risk merchants, and as a result they hold such merchants to strict chargeback rules enforcement and monitoring.
A merchant can be labeled as high-risk for several reasons, with the principal factors being:

  • Risky niche business—such as direct marketing, adult content, nutraceuticals, or travel services
  • Terminated Merchant File. A file that’s similar to the MasterCard Member Alert to Control High Risk Merchants (MATCH) list that is used to track merchants who have had their merchant accounts closed.
  • Minimal credit card processing history or bad credit history
  • History of high chargeback ratios
  • Failure to improve chargeback management practices.

Merchants labeled as high-risk, along with being held to stricter credit card monitoring programs, experience a higher cost of doing business. Every merchant, regardless of risk level, pays fees to acquirers to process credit card payments. For high-risk merchants, these fees are much higher than those of low-risk merchants. Additionally, these high-risk merchants are assessed additional acquirer penalties for chargeback occurrences.
Merchants should be up-to-date on the monitoring programs and guidelines of the credit cards they accept, including Visa, MasterCard, and American Express.
Managing Merchant Risk
Risk management is a major determinant of merchant success. Along with knowing the market and business space, merchants must manage their own risk factor to ensure they can maintain an affordable business relationship with acquirers.
The higher the risk, the more costly it is to succeed. As Visa and the other major credit card companies highlight, merchants are expected to self-monitor and track their chargebacks. This requires intelligent solutions such as Verifi’s Order Insight or Chargeback Revenue Recovery Service.
Knowing where your risks are before they damage your acquirer and credit card company relationships, you can protect your business and maintain your low-risk status. Don’t leave this risk management to chance – contact Verifi, your trusted team of chargeback experts to help keep your risk low and your business costs affordable.


The chargeback process can be an overwhelming experience. For many merchants, particularly those new to e-commerce and CNP sales, it would be easy to get quickly submerged in chargeback information overload.
The primary focus of this blog is to provide education on some of the finer points of the chargeback process, including chargeback representment, reason codes, and the latest in CNP security. We’ll take a particularly close look at who is involved in the process.
To understand why it is vital for merchants to understand the details of the chargeback process, consider these statistics from a 2016 survey by TSYS on 1,000 shoppers and their preferred payment methods. The survey results revealed that 40% of shoppers prefer credit cards, 35% prefer debit cards, and 11% prefer cash. The number of shoppers who prefer to pay with credit cards increased by 5% compared to a similar 2015 survey. The preference for debit cards fell by 6%.
These numbers highlight a consumer trend towards using credit cards more often and moving away from cash. With card-present and card-not-present purchases, the need for adopting a reliable fraud prevention solution must be a priority for merchants.
The Cardholder
It’s important to distinguish the difference between the cardholder and the customer. Often, customers may purchase from merchants with a credit card from a family member. In incidents of fraud, a stolen credit card—or stolen identity—may be used. The cardholder is the person who has been designated by the card-issuing bank as the primary individual connected to and responsible for the use of the credit card. This connection is established by the name imprinted on the card as well as the associated address of the cardholder.
This is an important distinction in understanding how the chargeback process is initiated. The chargeback process starts with the cardholder—not necessarily the customer.
A cardholder contacts their issuing bank to file a transaction dispute for any number of reasons. Often, the cardholder doesn’t recognize the charge on their billing statement and immediately assumes the card has been violated.
Without a solution in place that enables cardholder and merchant communication and enhances the level of detail in a cardholder’s online banking portal, the cardholder often believes they have no option but to contact their issuing bank. When fraud is not the underlying reason, the initiation of the chargeback process is not done with malicious intent—the cardholder simply doesn’t know any better. This is one example of “friendly” fraud.
The Merchant
The merchant is a business or person of business who sells products or services to the cardholder. The merchant is responsible for ensuring their website or mobile sales channel supports a secure authorization and purchasing process for the cardholder. The merchant is bound by several regulations and requirements, as dictated by the credit cards they support.
These regulations include providing a clear refund/return policy, sending confirmation emails on completion of the purchase, and ensuring that the credit card information entered is correctly validated and verified. These regulations are in place to provide merchant protection in the event a chargeback is filed. Merchants should thoroughly review the documentation provided to them by their credit card companies, to ensure their website meets expectations.
When the dispute is initiated, typically the merchant doesn’t learn of the resulting chargeback until they’re contacted by the issuing bank, which has already provided a temporary credit to the cardholder. When solutions that support merchant and cardholder communication aren’t being used, at this point it’s probably too late for the merchant to work with the cardholder to resolve the issue that has resulted in the chargeback.
The Issuing Bank
It’s important to distinguish between the issuing bank and a credit card company, a provider of branded payment cards such as Visa or MasterCard. The issuing bank offers these brand associated cards to their customer, the cardholder. Additionally, the issuing bank is responsible for reviewing the chargeback, providing a refund to the cardholder, and then contacting the merchant and acquiring bank about the chargeback.
The Acquiring Bank 
The acquiring bank has key relationships with the credit card companies and with the merchants. The acquiring bank enforces the credit card company regulations and holds the merchants accountable.
The acquiring bank enables merchants to accept payments, issue refunds, and establish merchant credit. Like the merchant, the acquiring bank has a vested interest in chargebacks: the more chargebacks the merchant deals with, the higher risk the merchant. This higher risk results in more fees for the merchant, making it costly to run their business.
During the chargeback process, the acquiring bank receives notification of the chargeback from the issuing bank. The acquiring bank decides to accept or dispute the chargeback. When the decision is to dispute, the merchant is informed, too often with limited time to build their chargeback representment case.
The evidence that the merchant must provide in representment is a critical factor in the chargeback decision. For merchants, having easy access to key evidence such as proof of delivery, description of the item, tracking numbers, and sales receipts, is very important to achieving a successful case.
The acquiring bank sends the merchant’s chargeback representment evidence to the issuing bank. The issuing bank reviews the evidence and then makes a ruling, either in in favor of the merchant or the cardholder. This decision is then communicated to all parties involved—the cardholder, the merchant, and the acquiring bank.
Moving Forward
The chargeback process is complicated, but it does not need to be overwhelming. With the correct support and solutions in place, merchants can be confident that they’re equipped to respond to chargebacks, and ultimately limit chargeback and fraud risk.
Verifi is your trusted team of chargeback experts. We have the knowledge and solutions that make it easier for merchants to protect their business from chargeback fraud. Contact us with your questions on chargeback fraud and we will be happy to help.


Chargebacks shouldn’t be a make-or-break dilemma for merchants. Understanding the salient facts of how to fight chargeback fraud, merchants can successfully navigate the representment process.
Many merchants believe that it’s impossible to win a chargeback representment, but with some good advice and then acting on strategic decisions, you can be successful. Everyone involved in the chargeback dispute—merchant, issuer, acquirer, the credit card company, and the cardholder—want the dispute resolved as quickly as possible.
It’s a good idea to review the guidelines provided by the major credit card companies, including  Visa, MasterCard, and American Express, to learn how these companies encourage you toward the best way to fight chargebacks.
Chargeback Representment Challenges
Merchants typically face three key challenges when deciding how to fight a chargeback and win. For savvy merchants who put together a thorough chargeback representment defense, the following three items would no longer be a concern:

  • Fighting chargebacks in-house. This is expensive and time-consuming, draining internal resources.
  • Cost of doing business. Chargebacks are not a cost of doing business. Merchants can successfully fight chargebacks and win.
  • Chargeback representment process. The chargeback representment process is not simple. To win a chargeback dispute, the merchant must adhere to a specific process.

Many merchants believe that they’re alone in the fight to win a chargeback. The good news is that the Verifi team of experts is here and ready to help you come out on the winning side of chargeback disputes. With our advice and industry-leading solutions, such as our Chargeback Revenue Recovery Service, we can eliminate the three challenges that hamper so many merchants.
How to Fight Chargebacks
Our goal is for merchants to have the knowledge they need to successfully fight and win chargebacks. The following details the chargeback representment process, breaking down the fundamental steps so that merchants can understand what it takes to win a chargeback dispute.

  1. The cardholder contacts their credit card-issuing bank to dispute a charge. Remember that acts of friendly fraud are very common and it pays to have solutions in place that provide notifications for high-risk customers and purchases.
  2. The issuing bank reviews the chargeback claim and typically issues a provisional refund to the customer. The merchant is now informed of the chargeback and is charged for the chargeback refund along with any associated fees, fines, or penalties (review the documentation from the credit card company).
  3. A chargeback reason code is assigned to the chargeback. Knowing the chargeback reason code is vital in preparing a successful chargeback representment case. Each credit card company has a different list of reason codes, terms, and evidence requirements.
  4. The merchant must decide to dispute or accept the chargeback. To dispute a chargeback, the merchant must follow the requirements as stipulated in the chargeback reason code.
  5. The merchant has a limited amount of time to prepare the documentation required to dispute the chargeback. Along with a chargeback rebuttal letter, the merchant may have to provide sales receipts, proof of delivery, return/refund policy information, email communication with the customer, tracking numbers, and other evidence that supports the case. Typically, the merchant has only five to ten days to compile this evidence.
  6. The merchant submits the evidence to their acquiring bank. The acquiring bank forwards this to the issuing bank.
  7. The issuing bank reviews the chargeback representment case and evidence and then rules in favor of the merchant or the cardholder. If the issuer decides in favor of the merchant, the cardholder may decide to file a pre-arbitration chargeback for the same claim. In this case, the chargeback dispute process begins again for the merchant.

During this process, there is no opportunity for the merchant to communicate with the cardholder. Having a solution in place that supports merchant and cardholder communication, often prevents the chargeback from being filed and allows the merchant to easily clear up any misunderstandings over the product or service.
You Can Win Chargeback Disputes
While the chargeback representment process may appear daunting, it’s important to remember that no merchant is alone in this fight. Savvy merchants know that with a few solutions in place that open the lines of communication with cardholders and act as evidence repositories, the challenges of chargeback representment need not be a stifling matter.
Winning a chargeback dispute comes down to preparation. With the expert assistance from Verifi, we can make this simple and hassle-free. Know that we are on your side and will be with you throughout the chargeback process, making sure you are successful.


In this digital age, there is huge emphasis on knowing who merchants are selling to and buying from. It pays to know customer history and buying patterns, and it’s important for merchants to know the facts on their third-party suppliers. This knowledge is key in limiting fraud risk and detecting it before it happens.
But what about internal fraud risk? Internal fraud should not be overlooked, nor should it be cast off as a minor issue. This friendly fraud is truly a force to be reckoned with that can hurt businesses, regardless of size, niche, or revenue numbers.
The challenge is in knowing how to balance the efforts placed on external and internal fraud prevention and detection. The good news is that internal fraud or friendly fraud can be easily prevented and detected with a few basic measures and some infrastructure development.
The Costs of Internal Friendly Fraud
Often the best way to understand a problem is to see the numbers in black and white. Data from a recent study conducted by the Association of Certified Fraud Examiners (ACFE) titled Report to the Nations on Occupational Fraud and Abuse, reveals the prevalence and impact of internal fraud.

  • Median loss from a single case of internal fraud was $150,000
  • Over 23% of internal fraud cases resulted in a minimum loss of $1 million
  • Study of 2,410 internal fraud cases came to a total loss of more than $6.3 billion
  • Financial statement fraud ranks the highest of the three major categories of fraud with a $975,000 median loss
  • Whereas the median cost of employee internal fraud was $65,000, the median cost of executive internal fraud was $703,000

These numbers highlight why it is imperative that internal fraud is addressed and that mechanisms are in place to prevent it from occurring. Another interesting fact from the 2016 study by the ACFE, highlights that organizations that did not have anti-fraud controls suffered twice as much loss as those companies that do have internal fraud prevention measures in place.
Internal Friendly Fraud Protection
It cannot be stated enough that knowledge is power—particularly when it comes to internal fraud protection, prevention, and detection. The more a merchant knows about the business and how it operates, the better protected and secure will be the business assets.
Building this knowledge takes stepping back and assessing how the business operates, who is actually running the business, and in understanding the largest fraud risks.
With a fraud risk analysis that includes studying how all employees (including upper management) interact with company assets and resources, fraud risk areas quickly become apparent. This process highlights where controls are lacking, where policies need to be clearly stated, and where changes need to be made.
With this knowledge, a merchant can then implement some key internal fraud protection mechanisms that will work to prevent, protect, and detect fraud.

  • Auditing:  Conduct regular internal audits of inventory, payroll, bank statements, and other transactions. Both internal and external auditing of financial statements are effective.
  • Established code of conduct:  When all company members know that internal fraud will not be tolerated, the risk factors are reduced. Be transparent about how whistleblowing will be handled and stress that anonymity will be respected.
  • Secure data:  Use technologies such as PKI compliance, tokenization, SSL, digital signatures, and biometrics to ensure security and protection. Don’t overlook measures such as forced password updates, office access cards, and disabling of past employee accounts.
  • Management and employee review:  Reviewing the roles and access that comes with these roles highlights where access needs to be tightened, and allows ranking of management and employee fraud risk factors.
  • Hotline:  Giving all employees a method of anonymously reporting fraud can greatly reduce the risks of fraud occurring. The Report to the Nations on Occupational Fraud and Abuse reveals that having a hotline in place lowered the median fraud costs for a business from $200,000 to $100,000.

Just as with the external fraud that many merchants solely focus on, the costs of internal fraud are typically never recouped. The loss to the business, the damage to brand reputation, and the ability to recover from internal fraud all quickly add up. In fact, the longer the fraud occurs, the more costly it is to the organization.
Data collected by a 2014 ACFE study reveals that when internal fraud is caught within seven months of occurrence, the loss is on average $50,000, but when the fraud continues to 36 months the loss grows to $211,000. When this type of fraud reaches the 61-month mark, the loss is $965,000.
Taking Control of Internal Fraud
Just as you implement solutions and technology to protect your business from external friendly fraud risks, the same must be done to protect your company from internal fraud risks. There is too much at risk, and by taking smart and proactive steps, it is possible to keep your business running securely, both inside and out.
The Verifi team has deep expertise in the latest tools and technology that can provide a secure environment, providing you fraud protection where and when you need it most.


Consumers want quick and easy payment methods. They expect to be able to pay from whatever device they have in their hand (or on their wrist) and do so when they want. This is the new age of card not present transactions, and merchants who want to succeed need to keep pace with these demands.
For many merchants, this pace of emerging payment options can be overwhelming. First, websites were forced into redesign to support mobile, then came the demands for apps that work on smartwatches and smartphones—and now merchants must update again to support peer-to-peer payments (or P2P, also referred to as person-to-person).
P2P payment technology allows consumers to quickly and easily send payments with a quick tap or swipe. With apps and services such as Venmo, PayPal, Google Wallet, Dwolla, Apple Pay, and Bitcoin becoming accepted payment options by many online businesses, P2P has moved from the fringe to the mainstream.
P2P and Card Not Present Transactions
Credit and debit card payments aren’t going anywhere, but for card not present merchants it’s time to make room on the checkout page for the latest in P2P options. It could be easy to assume that consumers will, upon not seeing their chosen P2P method, simply pay with a credit or debit card, but it’s important to remember that millennials and the overwhelming number of mobile users expect and demand to pay with their preferred method. The struggle for merchants is to determine how to support P2P payments, considering the range of available methods, and which to support.

  • PayPal:  Not affiliated with a bank; users must connect a bank account or credit card. Allows users to store funds in a PayPal account. 202 countries, approximately 200 million active users, 25 currencies.
  • Venmo:  Owned by PayPal. Processed $4 billion in transactions in Q2 of 2016. Only available as a mobile app. Very popular with millennials.
  • Dwolla:  Offers a mobile app for consumers and customizable APIs for merchants. Primary focus is on APIs for merchants to support payments from a Dwolla account or credit/debit.
  • Google Wallet:  Send and receive money with an app, Gmail, or through wallet.google.com. Linked to a bank account or debit card.
  • Apple Pay:  Proprietary Apple product. Can be connected to a debit or credit card. Works with some store credit cards, such as Kohl’s, BJ’s, Ultra, and Meijer.
  • Bitcoin:  Uses its own Bitcoin currency—doesn’t trade in dollars. Not connected with a bank. Users create a Bitcoin wallet to send and receive bitcoins with an app or through a website.
  • Bank-centric: Most major U.S. banks support P2P with the integration of vendor technology. The two biggest P2P vendors working with banks are Popmoney and ClearXChange. Allows users to transfer money through a bank-specific app or website.
  • Facebook Messenger:  Requires a Visa or MasterCard debit card. Payments take two to five days to process. Allows users to transfer funds to other Messenger users. Can also buy goods with Messenger bots.
  • Snapcash:  Owned by Snapchat. Uses Square Cash to process payments. Allows users to accept and send payments from within the app.

This list highlights the most popular P2P payment options and is likely to grow as P2P becomes more ubiquitous with buyers and merchants. P2P changes the face of card not present transactions by putting new demands on merchants to support these options and to ensure that consumers are not at increased risk with this P2P support.
P2P Security Risks 
For many merchants, there are lingering questions about P2P and the associated fraud risks. While the opportunities afforded merchants and consumers by the flexibility and freedom of P2P are hard to dispute, these options do come with fraud and security risks. There are no security standards or regulations governing P2P payment options, giving providers room to choose how they want to best secure these transactions.
Particularly with the app-based P2P options such as Facebook Messenger, Snapcash, and Venmo, there have been reports of users becoming victims of fraud. Users of these P2P options have been targets of fake transfers, fake lottery winnings, fake fundraising, and have been tricked into accepting money from unknown senders.
As a card not present merchant, you know that a large part of your security and fraud prevention relies on knowledge—knowing who is buying from you and who is providing you with payment solutions advice. Successful integration of P2P payment relies on data—knowing how and where transactions are being initiated, and knowing how these P2P payment providers are keeping both your business and customer data secure. This requires expertise in the payments industry and understanding of the latest in fraud prevention.
If you’re considering P2P support or simply have questions about these payment options, contact Verifi to learn more. Our goal is to make sure that the entire payments ecosystem is safe and secure, and we are committed to help and support you in your business success.


Simplifying and streamlining are key principles in modern business. The more streamlined the business, the easier it is to reduce costs, maximize profits, and see how resources are being optimally targeted or wasted. This holds true for both merchants and issuers. For example, a simplified end-to-end solution would allow all parties involved in the chargeback process to work together effectively and efficiently. Time would be saved, resources maximized, and chargeback fees would be kept under control.
When dealing with transaction disputes, merchants and issuers have depended on the same solutions and communication mechanisms they’ve always used. The prospect of changing major software solutions or operational procedures could result in costly problems and downtime. However, with proper planning and expert advice and support from proven payment solution experts, this downtime is preventable.
Implementing an end-to-end solution—from fraud prevention to chargeback resolution—can help merchants and issuers reduce the resource drain, improve communication, and alleviate the frustration that come with merchants depending on a complicated multiple-acquirer solution. For merchants, most importantly, the benefits of an end-to-end solution can translate into reduced chargeback fees and increased profits.
Chargeback Fees: The Issuer’s Perspective 
Just as you’re dealing with the costs of chargebacks, issuing banks are also beset with addressing this time-consuming problem. For the issuer, this results in increased complexity, operational costs, and the fallout that results from an inconsistent customer experience.

  • False positives:  When transactions are mislabeled as disputes, the chargeback process is slowed and real disputes end up costing more.
  • Overflowing pend queues:  Increased disputes means additional trained personnel are required to manage queues, lowering productivity and increasing delays.
  • Compliance costs:  Management and overhead of the many chargeback reason codes for each credit card brand adds up in technology and staffing costs.
  • Increased customer complaints:  Delays in resolving disputes results in miscommunication, multiple requests for assistance by the cardholder, and overall frustration.

These factors all add up to one thing—increased costs for the merchant. Issuing banks must recoup the costs of managing disputes, chargebacks, and customer complaints—the trickle-down target being you, the merchant.
Chargeback Fees: The Merchant’s Perspective
As a merchant, you’re caught in the middle, trying to manage pressure from your customers and issuers. Everyone wants the chargeback process handled as quickly as possible, but with every miscommunication and delay in response, the chargeback fees and costs can increase.
Implementing an end-to-end solution enables you to avoid costly chargebacks and resource-draining issues:

  • False positives:  Overly rigid rules engines result in false positives, causing time and money to be spent on a manual review process.
  • Decreased efficiency:  Manual processing and multiple-acquirer solution overhead requires staff, time, and expense to deal with processing, reconciliation, and coordination with multiple issuing banks.
  • Loss of goods or services:  Merchants lose the products and/or services and well-earned profits associated with a chargeback.
  • Excessive refunding:  The merchant issues a refund, but this may not stop the chargeback. Blind spots occur between issuer and merchant communication.
  • Penalties and fines:  Issuers charge fees to merchants when a chargeback is issued. When the chargeback-to-sales ratio exceeds a set limit, these fees drastically increase. Passing on these costs to the consumer can severely affect good customer relations.

This all circles back to one vital need: improved communication. With less time being wasted on convoluted processes, the more everyone can focus on the problem at hand—resolving the customer’s dispute and preventing fraud.
Too many costly errors occur when there are delays, overburdened systems, inefficient protocols, and a lack of staff and knowledge. Issuers deal with these costs through increased chargeback fees charged to the merchant. Merchants deal with these costs with increased prices. The customer gets frustrated with increasing prices and poor customer service and may eventually direct their business to your competitor.
Merchant-Issuer Collaboration
With a simple end-to-end solution like Verifi’s CDRN, merchants and issuers can work together to shorten and mitigate the chargeback process. Issuers can notify merchants of pending disputes, enabling the merchant to solve the dispute before it escalates to a chargeback. This allows issuers to stop spending resources on chargeback management and focus on their core business. The customer is satisfied because their complaint is dealt with quickly.
Contact us to learn how easy it is to implement an end-to-end solution that bridges the gap between merchants and issuers. Put your trust in the Verifi experts and get back to focusing on your core business.


It’s time to face reality and stop avoiding a very pressing topic—false declines. Too many e-commerce merchants fail to understand the cost and pressure false declines are placing on their businesses. In fact, it’s estimated that in 2016, false declines cost e-commerce merchants $8.6 billion.
The good news is that there are solutions to this real-world business problem. Getting a grip on false declines all comes down to your fraud management system, and most importantly how you’re handling friendly fraud.
There is so much effort placed on preventing friendly fraud from occurring that many merchants have become too aggressive with their fraud controls. This is to be expected, particularly if you’ve been a victim of friendly fraud on more than one occasion.
It’s important to recognize that the $8.6 billion in lost revenue to false declines overshadows the estimated $6.5 billion in prevented fraud. In other words, you’re only going to start winning the fight against friendly fraud when your fraud management system is truly working in your favor.
Find the Balance with Friendly Fraud Controls
E-commerce merchants like you are frequent victims of friendly fraud. So, you respond with an overly aggressive fraud detection solution. Gradually, you notice that though you’re not seeing as many friendly fraud chargebacks, you are seeing a definite loss in revenue.
How does this add up? You’ve tightened your fraud controls to prevent theft and chargebacks, and as a result you’re losing out on sales. This is the truth about false declines—they can hurt your business more than you realize.
Review your fraud management system and make sure you understand how and why customer purchases are being declined. Be aware of the following reasons for declined purchases:

  • Incorrect information:  The customer made a simple data entry error.
  • Expired card:  The purchase was declined due to an expired or invalid card.
  • High card activity:  The system determined there was too much card activity.
  • Cross-border purchaser:  The customer lives in a country that has high fraud rates.
  • AVS errors:  The billing address provided did not match the billing address linked to the credit card.

Studies show that when a customer’s purchase is declined, the customer does not attempt the purchase again. Customers simply give up in frustration and move on to your competitor. This has a deep trickle-down effect: you lost the original sale, the customer likely won’t return to buy another product from you, and the customer may become a recurring customer with one of your competitors.
Prevent False Declines and Friendly Fraud
The goal then is finding that perfect balance that keeps the friendly fraud under control but still prevents false declines. You’ll know you have reached this point when you see your fraud and chargeback numbers dropping and your sales steadily increasing.
The key to this is in making sure that your fraud management system is working for you and not against you. To review your fraud prevention management needs, consider doing the following to prevent false declines from hurting your business:

  • Understand your data:  Know why false declines are happening. There is likely a common thread connecting a large percentage of these decline purchases.
  • Review your rules engine:  Make sure the rules engine setting are not overly aggressive and blocking purchases due to obvious human error.
  • Contact your customers:  When a purchase is declined, reach out to the customer by email to verify their purchase or payment details.
  • Review your entire fraud solution:  Make sure you’re using a multi-layered fraud solution that is collecting data on your customers, reviewing transactions, and monitoring fraud risks.

Sooner or later, the costs of false declines will be too high to push into a corner. Take that same energy you’ve given to learning about solutions to friendly fraud and put it into reducing your false decline numbers.
With the right solution in place, you’ll keep your dedicated customers, acquire new customers, improve your brand profile, and win customers from your competitors who are still ignoring the realities of false declines.