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When the Internet of Things (IoT) was barely a whisper, analysts were already considering the impacts this technological breakthrough would have on our daily lives. In 2013, the Gartner Group predicted that by 2020 there would be over 26 billion connected devices. This means that IoT devices will be as ubiquitous as paying with your credit card is today. How we buy, sell, and live will undoubtedly be connected. This connectivity brings with it previously unseen security concerns. With the IoT breakthrough being a present reality, now would be a good time to strategize on your fraud protection measures.
The IoT brings with it huge potential for merchants to sell and productize in ways that 10 years ago were only the stuff of imagination. Think of the connected refrigerator:

Your customer uploads a grocery list to their connected refrigerator.
As the grocery store owner, you monitor this grocery list and the contents of the customer’s fridge.
When your in-store monitoring app discovers the customer is low on milk, a delivery is automatically sent to the customer’s home.
Your customer’s credit card is then charged for this transaction.

At first glance this couldn’t be more convenient. However, when you start thinking about security and fraud protection, questions may start to flood in. How are the refrigerator and your grocery store apps communicating? Are all the devices connected over SSL? What type of fraud protection and customer detection mechanisms are in place to ensure this is a valid credit card or even a valid grocery list?
Harnessing the Latest in Fraud Protection
Soon, the IoT will allow you to predict what your customers want and essentially deliver on the promise of immediate gratification. Monitoring wish lists, managing holiday shopping, restocking grocery and household supplies, and booking service appointments—all this will be possible with a few swipes and clicks.
As exciting as this sounds, let’s come back to the matter of fraud protection. Just as technology leaders are thinking ahead, merchants must do the same with fraud protection solutions.
Your fraud protection solutions must feature the latest in a detection and prevention solution:

Geolocation: Verify the location of the customer with the actual location of the active card.
Biometric analysis: Compare the customer’s fingerprint with that of the cardholder.
Address verification service: The issuer compares the addresses provided during the transaction.
CVV: Additional credit card security code required during the final payment authorization.
IP intelligence: Deep analysis of the IP address used for the transaction to monitor possible risks associated with this location.
Device intelligence: Deep packet inspection and proxy piercing capabilities to expose specific identifying details of the connected device submitting the transaction.
3 domain secure: A cardholder authentication protocol for e-commerce transactions and CNP purchases.
Merchant co-op: New orders are compared against millions of orders taken by other merchants contributing in-network and scrubbed for fraud risk.
SSL: Secure encrypted communication protocols between devices and payment solutions.

Just as mobile and e-commerce channels have brought on demands to change the way you need to protect your business from new fraud risks, the same holds true for the IoT. The pace at which the IoT will impact your business practices is still largely unknown, but the reality is that your customers want the ease-of-use that comes with connectivity. The present challenge is to clearly define how your business can be protected from the inherent security flaws and risks that come with this new level of connectivity.
Be Ready for the IoT
Major credit card companies, including Visa and MasterCard, are already thinking ahead and preparing for this expanded landscape of buying and selling. As a merchant, new requirements are sure to roll out to you to keep pace with what the credit card companies are planning to do.
For any questions you have about IoT fraud prevention solutions, the Verifi team is here to provide answers and guidance—from Visa Ready, mobile wallets, digital fingerprinting, MasterCard’s Commerce for Every Device program, to multi-layered fraud protection and more. Verifi is your trusted partner in cutting edge fraud prevention and protection, providing managed solutions that will grow with you as you move deeper into IoT commerce. 2020 isn’t that far away: now is the time to plan and prepare your fraud prevention strategy for IoT. Call us today to talk about your security and protection options.

PayPal has made it easier for card-not-present merchants to reach a wider customer base. No longer a fringe method of payment, PayPal is commonly used by all types of customers, regardless of their experience with online shopping. For many online consumers who maintain a balance in their PayPal accounts, paying for items with PayPal is preferable to using a credit card. In fact, many merchants prefer that their customers use PayPal to reduce the risk of losing sales. However, we still have the sticky matter of PayPal chargebacks.
Yes, PayPal chargebacks are an issue and they occur just as frequently as credit card chargebacks. Accepting PayPal payments does not prevent you from becoming a victim of chargebacks or chargeback fraud.
PayPal Chargeback Primer
Just as we recommend that you be up-to-date with the chargeback guidelines detailed by your acquirers and associated credit card companies, we recommend the same for your use of PayPal. All merchants can benefit from increasing their understanding of how PayPal processes chargebacks and disputes.
To acquaint yourself with their particular dispute processes, we recommend you read the following sections of the PayPal website:

Knowing in advance how you’re expected to respond to a claim, chargeback, dispute, or bank reversal, could make a big difference in retaining well-earned profits. PayPal expects its merchants to fully understand and comply with all rules and regulations. Equally important is understanding how and when the Seller Protection policies apply.
Remember, each scenario has its own requirements, so it’s wise not to assume that what you did for a claim will apply to a chargeback or dispute. Success for you means having the right payment solution support when you need it—so don’t leave this to chance or for the last minute.
There are three ways customers using PayPal can file refund requests: dispute, chargeback, or bank reversal. This is unique to PayPal and warrants some further explanation, since it’s easy to overlook what distinguishes each of these three scenarios.

PayPal dispute: The customer contacts the merchant directly through the PayPal Dispute Resolution Center to file a dispute. The customer and the merchant work together to solve the problem. If an agreement can’t be reached, the customer escalates the dispute to claim a request for refund/reversal. This is when PayPal gets involved to determine what’s best to resolve the matter.

PayPal chargeback: The customer contacts their card issuing bank directly to request a refund. Many customers have their credit cards linked to PayPal for payments, and it is the credit card that is being charged, rather than debiting the PayPal account.

PayPal bank reversal: The customer contacts their bank directly to request a refund. Many customers have their bank account linked to PayPal for payments, and it’s their bank account that is debited rather than the PayPal account.

In an ideal scenario, your customer will file a dispute in the PayPal Resolution Center, providing you the opportunity to directly resolve the problem with the customer. On the customer side, PayPal does its best to direct customers to the PayPal Resolution Center as the most proactive method of solving issues with purchases.
When a customer files a PayPal chargeback, the process is very similar to that of a standard credit card chargeback. PayPal is notified of the claim by the issuer, you are then alerted to the chargeback claim and PayPal asks you to provide specific details about the transaction. This is then forwarded to the issuer so that the chargeback can be resolved.
Many merchants mistakenly believe that the PayPal Seller Protection policy protects them from these chargeback claims—however, this is not the case. The PayPal Seller Protection policy provides protection for merchants under very specific circumstances and for very specific purchases.
Succeeding as a PayPal Merchant
Be sure to stay on top of the latest updates to the PayPal user agreement and that you know how the PayPal Seller Protection policy applies to your business.
Verifi is your trusted team of experts when it comes to payment solutions, chargebacks, and fraud detection. Working together, we can save you time, money, and stress—allowing you to focus on what you do best for your business. Don’t let chargeback myths and the lack of understanding be your undoing—rely on Verifi to provide you the expertise you need.

To succeed in the business of buying and selling goods and services, controlling and limiting risk is essential. In this age of e-commerce, customers expect to be able to easily enter their credit card data without having to think twice about the security or risk involved with their payments. But for the merchant, there is some inherent risk associated with credit card payments. Beyond the obvious possibility of chargebacks, there are the costs and contracts associated with credit card processing.
Many merchants simply accept the costs tied to credit card processing and don’t take the time to question how much they’re paying for this service. It’s in your best interest to carefully review your credit card processor agreements and understand how and why the processing fee is calculated.
Remember, the credit card processor wants your business. Just as you negotiate with third-party vendors and suppliers, you have the right—if not the obligation—to ensure you’re not paying too much for this important feature in your business.
Credit Card Processing Basics
Credit card processing is a complicated business, but there’s no need to get bogged down in deep details just to maintain it as an effective feature of your business practices. As a merchant, it’s important to understand the credit card processing fee structure and the three ways credit card processing contracts are structured.
The credit card processing fee has three components:

Interchange fee: This is a non-negotiable component of the processing fee. This fee is paid to the issuing bank for each merchant credit card transaction.

Assessment fee: This is also a non-negotiable component of the processing fee. Merchants pay Visa, MasterCard, or Discover (American Express is different) an assessment fee to accept cards displaying the credit card company logo.

Processor markup: This is the negotiable component of the processing fee. The processor markup fee varies based on the type of credit card processing contract.

As you can understand, the processor markup fee ensures that you are not overpaying for credit card processing. While the processor markup fee is negotiable, this fee is impacted by the type of processing contract you sign.

Pass-through pricing: This model allows merchants to see each component of the processing fee. Merchants know the processor markup and can negotiate to control this cost.

Flat rate: Merchants pay a flat rate and don’t see the breakdown of the three fee components—meaning they don’t know the amount of the processor markup.

Bundled: This model can have a lot of flexibility in how it’s assembled, with a complicated structure that includes variable fees based on qualified and non-qualified transactions and rates.

These are the basics of credit card processing fees. With this knowledge, your next step in determining if your credit card processing fees are reasonable or too high is in taking a closer look at your business model and revenue stream.
Credit Card Processing and Your Business
You can spend many hours researching and learning about credit card processing, credit card processor companies, payment gateways, and the intricacies of processing contracts. But that might not be the most prudent use of your time when deciding how to implement this important fixture in your business.
The smart move is to work with a payments solution company like Verifi. We are industry-leading experts in payment gateways, in addition to payment security and fraud prevention solutions. We have long-standing partnerships with many of the top payment processing companies.
To learn more about payments security solutions, contact us and we’ll gladly help guide you through setting up payment processing for your business. There can be a lot of decisions to make when determining what kind of payment processing service you’re looking for. This includes the structure and length of your current contract, how your customers primarily pay for your products or services, and what kind of additional processing features you need, such as fraud protection, encryption, analytics, and data storage.
If you’re just at the beginning of building the structure of your business, this might sound more complicated than it is. Read our white paper titled How to Choose a Payment Processing Partner to learn more about payment processing. There are many steps to take in creating and maintaining a successful business—it’s always best to take them just one step at a time.

The good news for merchants is that there is a boom in online sales and confidence in customers to buy online. The bad news for merchants is that this boom in online sales brings with it an overwhelming amount of e-commerce and CNP fraud. Your customers are confident in both buying online safely and sometimes with getting away with online fraud. The struggle for today’s merchant is to determine the best method of credit card fraud detection without driving away customers.
Your loyal customers want an easy and fast payment processing system. They don’t want to be bogged down with cumbersome data screens, exhaustive password requirements, or multiple email confirmation steps. But if you don’t implement reliable fraud detection procedures, how can you protect your business?
It’s a fine line to tread: Add too many layers to your credit card fraud detection system and you’ll risk driving customers away—but not having enough detection methods in place can cause you to lose out to fraudsters.
Ease of Credit Card Fraud
A recent study by Juniper Research titled Online Payment Fraud Whitepaper points to three key reasons for the increases in e-commerce fraud numbers:

Growing e-commerce market: More online sales opportunities translate directly to more fraud opportunities. E-commerce fraudsters have unlimited fraud options.

Higher amount of dollars: E-commerce sales span all ranges of price levels. It is not uncommon for customers to spend large sums online, resulting in increased fraud potential and risk.

Mobile payment popularity: Ensuring security with mobile payments and digital wallets is a huge challenge. Merchants are not prepared for sophisticated hacking methods.

Add to the above the ease-of-use with which customers share their credit card information online and you have the perfect formula for increased fraud numbers, and the desperate need for merchants to focus on credit card fraud detection.
Credit card fraud has become prevalent, and this is how it’s typically done:

Clean fraud: The fraudster has stolen all of the customer’s data, including credit card number, CVV, address, phone number, and any passwords. This data successfully penetrates the authorization and authentication solution.

Account takeover: The fraudster gains access to the credit card by submitting an update to the cardholder’s information, such as the email address or home address.

Identity fraud: The fraudster uses personal information such as passwords or phone numbers to access the credit card number.

Reshipping: The fraudster uses an intermediary to unknowingly transfer or ship items purchased with a stolen credit card.

The question for you is: what are you doing right now to detect these credit card fraud methods? Now that you know how easy it is for some consumers to commit e-commerce and credit card fraud, it’s your responsibility to take the steps to protect your customers and your business.
Effective Credit Card Fraud Detection
There is no room for half-measures or partial solutions when it comes to credit card fraud detection. You must be fully committed to tightening all seals in your payment environment—this protects both your customers and contributes to the confidence of the entire e-commerce industry.
To protect your customers and your business from e-commerce and credit card fraud, think about those pesky methods mentioned earlier: tight password requirements, multiple email confirmation messages, mandatory CVV usage, and keeping your payment solutions up-to-date.
Yes, this all takes work and will likely require some extra customer service outreach on your part. Customers may not adapt well to change, but when you explain to them why you’ve added new steps to the authorization process and subtly point out the risks of credit card fraud, most customers won’t complain about an extra email confirmation or an extra checkbox on an authorization page.
Credit card fraud detection can be as multi-layered and complex or as simple and straightforward as your business requires. The key is in ensuring that you’ve got the appropriate and most effective solutions in place for your unique needs. Contact us with your questions and we’ll provide you with our expert advice on how you can implement the right credit card fraud detection solutions.
Learn more about fraud prevention strategies with our white paper titled Security Implications for Merchants – Emergence of New Payment Methods and their Fraud and Risk Prevention Considerations.

There is nothing simple about chargebacks. Managing chargebacks can require a deep level of knowledge and a vigilance for staying up to date. It’s because of this that the waters can be muddied rather quickly when you start digging into a chargeback to determine who is actually at fault. What can at first look like out-and-out chargeback fraud might be merchant error, or vice versa. So, where does this leave you as a merchant?
Essentially, it means you need expert help and a firm grounding in all things chargebacks, including understanding your rights as a merchant. Your chargeback merchant rights are not something often addressed, as it almost seems to be a topic of little value to discuss. However, we’ve received a few questions and comments from a variety of businesses asking about rights for merchants, and we believe this is a very important topic.
The number one thing to know and remember is this: You do have rights as a merchant; though this may be unexpected, the customer is not always right.
Exercising your merchant rights helps protect your business and ultimately strengthens the entire chargeback infrastructure: merchants, issuers, banks, companies in the payments industry, credit card companies, and consumers.
Knowing Your Chargeback Merchant Rights
Your merchant rights are often overlooked (by yourself, the industry, and your customers) all too often. This behavior can be blamed on two key aspects:

Consumer protection: Chargebacks were introduced in 1974 by the Fair Credit Billing Act to protect consumers from credit card fraud. The idea was that consumers lacked confidence with the security of credit card transactions, and chargebacks would provide them with the confidence to use their credit cards.

Customer is always right: How often have you read a statement or viewed a sign in a business that attests to the rights of the customer and claims that the customer is always right? This has created an underlying belief that the customer is actually always right and would not make a mistake or commit fraud. This industry-wide misunderstanding has made it inherently challenging for those in business to speak up about their merchant rights.

Your chargeback merchant rights are connected to the chargeback reason codes and rules associated with credit card issuers. Every credit card company has its own list of reason codes and associated processes for managing chargebacks, but in general it’s important to be aware of these key merchant rights:

Returned item chargebacks: When a customer has returned an item, a chargeback cannot be filed until 15 calendar days after the return date. This gives you time to issue a refund and review the returned item to ensure it meets the stipulations outlined in your refund/return policy.

Issuer responsibility: Review the reason codes carefully and make sure that the issuer is adhering to their own guidelines. Many issuer reason codes stipulate the necessity of the issuer’s attempt to resolve the problem with the customer before a chargeback is filed. Also, the issuer is supposed to confirm that they have done this before proceeding with a chargeback.

Know the time limits: The reason code specifies how much time you have to respond and how this time is calculated. Your customers are bound by several time periods ranging from 45 days up to 540 calendar days—it all depends on the chargeback reason codes. Knowing all the details associated with chargeback reason codes can help protect you from abuse of the chargeback process.

Delivery date rights: When a purchased item is delivered after the promised delivery date, the customer must first return the item before filing a chargeback. A late delivery is not grounds for a chargeback, and when this does happen, you might consider the possibility of chargeback fraud.

No cash-back chargebacks: When your customer requests cash-back following the purchase of your product or service, this cash cannot be included in the chargeback amount. Often customers will try to cheat the system by asking for cash-back and then include this amount in their chargeback claim. All too often the customer will win this money back, because the merchant doesn’t know better or has become used to simply not representing the chargeback.

Representment is your right: This is ultimately your most important merchant right—the right to represent. Remember that you cannot and should not become a victim of chargebacks. The strength of the industry depends on merchants like you who stand up for their rights and are willing to dispute or represent invalid chargebacks. Doing so reinforces your rights, reminds issuers and banks that the chargeback process must be observed and followed, and signals to customers that they cannot assume that the customer is always right mantra will win out.

Exercising Your Merchant Rights
Isn’t it refreshing to be reminded that you do have rights and that as a merchant, you’re not expected to be a victim of the chargeback system? We suggest you do more research about chargebacks, chargeback solutions such as CDRN, and how you can better protect your business from fraud. And know that you are welcome to contact us with your questions and let us work with you to ensure you’re taking advantage of the latest in chargeback technology, and that you are up to date with the latest industry regulations.

Omnichannel sales opportunities are a huge plus for merchants, allowing you to sell to anyone, anywhere, and anyway you want. Your customers may be enjoying the positive advantages of omnichannel sales without realizing it. However, omnichannel sales are not all sunshine and roses, because we can’t overlook the increased fraud numbers that have come with it. This presents the merchant with a conundrum: What is the best way to seize the opportunities of omnichannel sales while maintaining an effective e-commerce fraud prevention strategy?
This is the reality of sales and payments in the digital age. Digital evolution provides us with an abundance of ways to sell, but it has also opened unprecedented fraud risks and opportunities for fraudsters. All of this speaks to the need to be vigilant and focused on your e-commerce fraud prevention methods, just as you are on keeping your website up to date and continually innovating your sales channels.
What Is Omnichannel?
Before we look deeper into what you as a merchant can do to protect your business from e-commerce fraud, we should take a closer look at omnichannel sales.
There are three primary omnichannel sales methods:

Brick2Click: Integration between online and brick-and-mortar stores, providing seamless customer support with either channel.

Device2Web: A device-centric omnichannel experience that allows customers to interact with the online store via a range of touch points. This category covers what’s called the Internet of Things (IoT), which is made up of Internet-enabled devices that network and communicate between other Internet-enabled devices and the cloud. This includes smartphones, tablets, digital wearables such as Apple Watch and Fitbit, thermostats and burglar alarms, home laundry appliances, and many other connected devices like Amazon Echo.

eAve2Web: Supports a smooth experience for customers who make purchases through eAvenues (eBay, Amazon, Groupon, etc.) and the brand by assigning order IDs and customer IDs with a centralized database system. This sales method supports customer service with multiple options, including brick-and-mortar, online stores, and eAve.

As merchant and consumer, it’s likely that you’ve taken advantage of some of these omnichannel sales methods and can appreciate the ease-of-use they provide you as both a seller and a buyer. For most customers, however, how they make purchases may not be important to them—they simply want the item or service.
To better understand why your e-commerce fraud prevention strategy must be multi-dimensional, it helps to look at omnichannel sales from the customer perspective and how the browsing, buying, and delivery is really happening.

Shoppers are using their smartphones while in your store They are doing research, comparing prices, looking for discount codes, and reading reviews.

Shoppers rely on digital content for their buying knowledge More and more customers are influenced by social media, review sites, and online product testimonials when making purchasing decisions.

Shoppers are using multiple sales opportunities for a single purchase Your customers may be starting their shopping process in-store and then completing the final sale online, or doing the opposite by conducting research online and then visiting your store to check the product before buying.

Savvy shoppers are keen to use multiple channels to get the exact product they want To learn about your product, out-of-town or international customers may use multiple online sales sites, in addition to social media to get feedback from their social network, and they ultimately buy directly from you. The product is delivered to their nearest location (say, UPS depot) and then your customer goes there to pick up the product.

Shoppers are now open to using your in-store kiosks to buy Many merchants have installed in-store kiosks that allow customers to order items not in stock, and then have the order delivered to their home or to the store for pick-up.

Your Omnichannel E-commerce Fraud Prevention Strategy
How do you protect your business from fraud while ensuring that your customers can buy from you when they want, how they want, whenever they want? It all comes down to data and how best to manage and track this overwhelming flow of traffic from multiple channels.

Combatting counterfeit fraud This is a challenge for brick-and-mortar, online, and mobile sales. Knowing your customers, having secure authorization and authentication solutions in place, taking advantage of EMV technology, and maintaining secure customer records can help protect you.

Gift card fraud This type of fraud comes from your savvier fraudsters who have learned that they can purchase gift cards with stolen credit cards and then use these gift cards to commit further theft. This theft can happen online with your website or in-store. To combat this e-commerce fraud method, ensure that you’re taking advantage of analytics to learn about your customers’ buying habits and integrating technologies such as IP intelligence and mobile geolocation.

Return fraud This fraud happens when customers use an item and then return it in-store or via mail for a refund. Fraudsters use a stolen credit card to make an online purchase and then return the item in-store for a refund. Or, a customer makes a purchase online and then files a chargeback, followed by returning the item in-store for a refund. To combat these types of fraud, you need to strictly adhere to safe business guidelines. This includes having up-to-date refund policies, requiring proof of purchase, taking advantage of robust sales analytics—and have a chargeback solution in place.

Just as you’ve learned to take advantage of omnichannel sales opportunities, you need to learn how to enforce effective e-commerce fraud prevention strategies. These strategies must protect you at all sales points: in-store, online, via mobile apps, and through eAve sales channels.
To learn more about omnichannel sales risks and e-commerce fraud prevention, we urge you to download our white paper titled How Digital and Physical Commerce Convergence is Affecting Sales and Fraud Risks. You can learn more about Verifi solutions such as Intelligence Suite and Global Payment Gateway—or contact us with your questions, and we’ll be happy to help.

How often do you think about fraud and your business? Hopefully, it’s something that you do think about but don’t obsess about. It’s important to find the right balance between too much emphasis on a prevention strategy and being too lenient with your approach.
Given the current state of today’s evolving payment landscape, your card not present fraud prevention strategy is something that may require some serious thought. The entire team at Verifi is focused on making it easier for you to run your business and to focus on what you do best. We would like to offer some guidance on how you can best manage your fraud prevention strategy, so we can do some of the heavy lifting for you.
Finding the Balance in Your Card Not Present Fraud Prevention Strategy
Ignoring the risks that fraud poses to your business can have disastrous consequences. It can be a daunting task finding the right amount of fraud prevention, especially in light of the glut of news reports about consumer fraud and card not present fraud we see so often.
Your customers may be concerned about doing business with card not present merchants. Your suppliers and third-party partners become anxious over the viability of your business. Your investors, credit card issuers, and your bank may offer up probing inquiries about your fraud prevention strategy and how you plan to respond in the event of a breach.
So, what is the solution? Taking on a tempered and balanced approach allows you to mix and match different fraud prevention tools to find the ideal solution for your business. What works for your competitor or for another business may not necessarily work for you. Just as you have a customized website, you need a customized fraud prevention strategy.
When thinking about your card not present fraud prevention strategy, consider our guidelines and think about how these do or do not apply to your business:

Use the right tools for your business This is where the customization is very important. Some of the tools we recommend for our clients include digital fingerprinting, device fingerprinting, merchant co-op, 3-D secure, post-billing chargeback alerts, facial recognition, and voice verification. Working with you, we can determine which level of security you need to enforce a balanced fraud prevention strategy. Remember, when it comes to finding the right tool, selecting the cheapest option, the most popular option, or the most innovative option are, well, not necessarily the right options. Your choice must be the best option for your company.

Use analytics to highlight the good and the not-so-good Take advantage of data analysis so you can learn what is working and not working in your fraud prevention strategy. Using data analysis combined with pre- and post-sale views ensures that you are alerted to likely fraud risks before it can happen. Know who you’re doing business with, what their purchasing habits and history are, and fine-tune your fraud prevention methods to balance the risk/reward of your strategy. It’s too easy to enforce an overly restrictive strategy, resulting in lost sales, a frustrating customer experience, and ultimately overall revenue loss.

Move quickly to prevent fraud from happening There is a definite need for speed here. The longer you wait to react and make a decision about your card not present fraud prevention strategy, the greater the risk to your business. Merely thinking about recent news reports on malware and hacking that have occurred, and hoping this won’t happen to your company and network, won’t do. Most companies that believed they were protected found out the hard way that their fraud prevention strategy was not up-to-date, and as a result became targeted victims by fraudsters and hackers. It’s not easy to maintain pace with the changes in technology. While we can’t ever know what is coming next, we can predict the trends using the available technology and determine how you could be attacked, and then to provide you with a layered solution that works to prevent an attack.

Your Card Not Present Fraud Prevention Strategy
Remember, it’s your fraud prevention strategy. Perhaps you’ve experienced fraud due to stolen payment card data or fraudsters who have learned how to work around cookies—this points to learning about digital and device fingerprinting solutions. Or maybe you’ve had repeat chargeback fraud attacks from what appear to be legitimate marketing channels—this could mean you need to take advantage of merchant co-op. After reviewing your analytics and the technology you currently have in place, our team of experts might very well decide that you may not need any of these tools in place but rather something completely different.
We can’t tell you exactly what to do. However, we can tell you this: you need to customize your card not present fraud prevention strategy to employ the right tools, at the right level, at the right situation.

It’s important to remember that as a merchant you do have rights and can fight back against credit card chargebacks. All too often we hear from merchants who mistakenly believe that they are helpless in responding to chargebacks and are simply at the mercy of the customer. This could not be further from the truth. You do have rights and you can respond to and fight back against credit card chargebacks.
The more knowledge and understanding you have about chargebacks, the better off you will be. This knowledge translates into better business practices, improved communications, proactive customer service, improved use of integrated solutions, and the ability to respond and react without panicking when you do receive a chargeback.
The Credit Card Chargeback Process
Chargebacks were introduced to protect customers from credit card fraud. It may appear that the chargeback process was designed with only the customer’s needs in mind. However, as you learn more about the chargeback process, you can see that merchants are just as important as the customer. The misconception with whom the credit card chargeback process really serves is lacking in information.
This lack of information results in confusion, mistakes, errors, and ultimately a failure to correctly represent your case when fighting a chargeback. To make sure you’re ready to respond to chargebacks, let’s take a look at some of the most common mistakes made and how you can ensure you’re able to avoid these.

Not having the correct documentation To respond to a chargeback, you must provide the required documentation. Each chargeback comes with its own set of documentation requirements, and knowing the details of the reason code will go a long way in building your representment case. Generally, you’ll need to provide the following documentation: proof of delivery (a signed receipt for the goods will help you a lot), CVV evidence (proof that the CVV was provided helps to validate the purchase), refund/return policy (all credit card issuers require proof that your return/refund policy is clearly visible throughout the sales process), and all documented communication (this includes any communication with your customer service team or other general inquiries).

Taking too long to respond Time is of the essence when responding to a credit card chargeback. The customer has up to two years to file a chargeback, but you do not have similar liberties with time. Typically, you have a maximum of 45 days from the date of the chargeback to respond with representment. When you factor in the time it takes for you to be notified of the chargeback and then conduct representment, often you’ll have about 14 days to collect your evidence and respond to the chargeback.

Wasting your efforts When there is an absence of communication between you and your acquirer, you may discover that you’ve been preparing a case for a chargeback that the acquirer is already addressing. There are scenarios when the acquirer decides to push back against the chargeback, meaning you don’t need to spend your time on responding. It’s up to you to know the practices of your acquirers and how they respond to chargebacks and if they have an automatic representment process in place.

Being complacent You spend a lot of time and resources developing, researching, marketing, and building brand loyalty—which is why you can’t become complacent in the face of credit card chargebacks. Make sure you have solutions in place that allow you to track and monitor every chargeback from start to finish. This allows you to see common themes and issues that can be contributing to chargebacks. You might also learn of holes in your system that make it easy for customers to commit fraud, or learn that your refund/return policy is not as clearly displayed as you beleived.

Respond to Chargebacks with Real Solutions
In an ideal scenario, you’d be able to respond to credit card chargebacks alone. You could respond with your rebuttal letter, provide your evidence, and wait optimistically for a win.
The chargeback process is cumbersome, slow, and difficult to navigate. You need to have right solutions in place. A solution such as Cardholder Dispute Resolution Network (CDRN) works for you to prevent chargebacks from occurring, to collect data and information about your sales and customers, and provides you the tools you need to correctly respond to credit card chargebacks. You need real solutions and experts working for and with you to help provide exactly what your business needs.

Although online sales are an accepted—and often preferred—method of doing business, there is still lingering uncertainty with online payment security. Some of your customers simply might never come around to buying your products or services online and will insist on doing business over the phone, in person, or by mail. Even though there is inherent risk with these tried-and-true sales models, it’s always best to keep in mind that the customer is king and do your best to provide for their needs. In any case, it is the merchant’s responsibility to deliver a simple-to-use payment solution that protects everyone involved, so your customers feel secure and you know you’re preventing chargebacks.
It takes striking the right balance to implement a secure online payment solution that works for you to prevent chargebacks, and yet isn’t so restrictive that you end up losing real customers and sales. This is a problem that many CNP and CP merchants face: how to protect everyone involved in the sales cycle, including the customer, the bank, yourself, and your brand.
Walking the Fine Line of Payment Security and Chargeback Prevention
The more trust your customers have in your website, the more likely they are to purchase your products or services. This is why you need a payment solution that handles the authentication and authorization final checkout in a smooth and simple manner. If your customers have to go through what they consider to be too many verification steps or are forced to enter a password multiple times, they are likely to give up and look elsewhere for the product or service.
This all comes down to the decisions you make on how to manage payment processing and authorization. Too strict with too many verification questions and you’ll lose customers. Too relaxed with little or no verification and you’re likely to be a victim of fraud, and you’ll lose customers who don’t think your website is secure enough.
Along with taking advantage of a merchant-specific solution, such as Verifi’s Cardholder Dispute Resolution Network (CDRN) to prevent chargebacks and enhance your online security, be aware of all your security options, including:

SSL-protected website Customers expect to use an SSL-protected website when entering their credit card information. The recognized “https” at the beginning of a website’s address has become one of the standards of security that consumers have come to count on.

Complex but not complicated passwords It’s very important that you have a payment solution in place that actively enforces a high level of password security. Demanding that your customers enter passwords that are overly complex and long will cause them to quickly become frustrated with the password rules. Be specific in the password rules that you provide, including uppercase, lowercase, numeric, and a set number of symbols and length that are allowed or required.

New technologies Is your business PCI-compliant? Do you accept only EMV or chip-enabled credit and debit cards? Have you begun to learn about biometrics and how this can add a layer of security to your payment solution? These techniques as well as tokenization can go a long way in preventing chargebacks.

Address verification Never accept a credit card payment without confirming the customer’s billing address. Errors in the billing address, such as a mistake in the Zip Code or using Road instead of Street, often are indicators that the credit card is stolen. Some merchants have restrictive rules on accepting orders that are delivered to an address other than the billing address. It may be worth adding in an extra step to confirm the different delivery address.

Know your customers When using a payment solution such as Intelligence Suite to prevent chargebacks, you’re doing more than stopping fraud—you’re learning valuable information about your customer base. This allows you to eliminate the bad actors or risk factors before they become a problem and result in costly chargebacks and revenue loss. You also learn about your customers’ interests, buying habits, and location—all of which happens behind the scenes and work to limit your risk.

This is just a small sample of some of the online payment security measures you can take to protect your business.
Another vital aspect to your online security and chargeback prevention is your customer care policies and implementation. Clearly communicating important details such as return policies and shipping options to your customers can help greatly in fraud prevention, as well as provide necessary evidence in the chargeback representment process. Make sure your customer care team has the right tools in place to record all communications.

As a merchant who counts on travel and tourism, this is one of your busiest times. Customers are frantically wrapping up summer vacation plans, and some might even be planning for excursions in the fall. This is good news for your business, but as you know this busy sales time means your risk for fraud and loss is likely to increase. You’re extra busy, your customers are out of their comfort zone and a bit stressed, so you push aside second thoughts about a customer’s lack of documentation for transaction authorization, and then a few weeks later you learn you’ve become a victim of chargeback fraud.
The success of your business relies on the ability to meet the needs of your customers quickly and efficiently. The increase in online sales and websites that enable travelers to book their own hotels, flights, cruises, car rentals, and other travel needs makes it more challenging for you to carefully review each purchase.
Travel typically comes with big ticket price tags. For example, a cruise package that includes flights, a couple nights in a hotel, port excursions, extra boat perks like WiFi, and then a post-cruise tour of the home port can add up to a very large sale. Just as your customer invests a lot in their cruise vacation, you must spend a lot on resources to find the best package for your customer—and as you know, the profit margin is tight with today’s competition in online sales. This adds up to a lot of risk and the need to be vigilant with your customer authorization and authentication process.
Be on the Alert for Fraud
It’s too easy to become a victim of chargeback fraud, particularly when you’ve got stressed out customers who want to book last-minute flights or desperately want to buy tickets to the latest big show or event. Understandably, it’s challenging to take a step back to remind yourself of fraud prevention best practices. To that end, keep in mind the following fraud warning signs:

Rushed purchase Often a fraudster will contact you in a panic, rushed to set up accommodations for their traveling party. Make sure you take the time to validate the credit card, passport details, and other relevant verification documents. If you’re operating your business without a proven payment solution in place, be cautious of the credit card being used—often these fraudsters are using stolen credit cards.

First-time customer Folks who regularly travel often establish a relationship with a specific travel company, allowing the merchant and the customer to build on that relationship which fosters customer loyalty. Be aware of a first-time customer who calls you or contacts you online to make a large purchase. As always, collect all necessary verification information, and especially take advantage of a merchant payment solution such as Verifi’s Order Insight to help prevent chargeback fraud.

Customer location We’ve all heard the stories of Internet requests for money transfers to a foreign country or the plea to send money to free a trapped relative. Today’s fraudsters have learned that VoIP phone service can be the ideal tool to hide their true location, tricking a sales agent into believing they are calling from a local number. If you have concerns over the customer’s location, seek to provide for the customer to come into your shop to pick up goods or services, or request a signature for delivery.

Conflicting billing and delivery addresses When a customer enquires about a cruise package, for example, but wants the tickets delivered to an address that is different from their billing address, red flags should go up. This is one of the most common fraud techniques, using different addresses for billing and shipping.

The common element in these fraud prevention tips is about making sure you don’t let the customer pressure or rush you into approving their purchase. It’s vital that you follow best business practices, including requiring necessary travel documents (passport, driver’s license, etc.) and not skipping any steps in the credit card authorization and authentication process.
Chargeback Fraud and Travel Purchases
Recent research has revealed that the items sold most frequently—cruise packages, flights, and resort packages—are impacted most by chargeback fraud. These are typically big ticket sales that require the most work on your part, so be sure to remember our chargeback fraud prevention warning signs and take extra steps to protect your business.
The travel industry is not immune to fraud, theft, and the threat of chargebacks. The simplicity of CNP sales and the prevalence of phone bookings make it easy for fraudsters to prey on travel merchants. Take the steps you need to be confident and comfortable with each sale.