Fraud rings thrive on consumer and merchant complacency. These sophisticated fraudsters are looking for merchants who are naïve to fraud ring threats and do not have the best-in-class payment solutions in place.
Fraud ring attacks can include a range of tactics, including paying with stolen credit cards, chargeback fraud involving complicit cardholders, selling fake e-gift cards, or creating schemes to create large-scale layered fraud against multiple merchants.
The main feature of a fraud ring is the coordinated and linked efforts of multiple fraudsters to steal from and defraud merchants. These are deep, premeditated fraud attacks that can last for years before being detected.
What differentiates a fraud rings from a small-time criminal is the level of sophistication involved in fraud ring attacks. Think of the people behind fraud rings as professional fraudsters – they approach their “job” just as seriously as anyone else. They take advantage of the latest in technology, communication, and payments to make it easy for them to succeed at defrauding merchants.
The good news is that even with a high-level of professionalism and technological superiority, fraudsters do get caught. Thanks to the high-level of scrutiny and sophistication in modern payments technology, it’s getting harder for fraud rings to go undetected.
Merchants using payments solutions that monitor for out-of-context sales, IP address data and traffic, frequency of sales from one device or cardholder, or other high-risk sales indicators are able to beat fraud rings at their game. Remember, fraud rings look for merchants who are not using the latest in modern payments solutions.
Fraud Rings: How They Operate
Fraud rings typically involve a deep web of fraudsters and merchants. It takes coordination, precision, and the promise of untold millions of dollars to develop and manage such large-scale, sophisticated fraud. However, just as these criminals use more complicated methods to commit theft and fraud, payments experts and criminal investigators use similar tactics to detect and catch fraud rings in action.
One common tactic used by fraud rings is to test merchant payment solutions and fraud detection software, seeking holes in the technology. A fraud ring may test the technology with fake e-gift cards, making small purchases and when these go undetected, advance to more frequent and larger purchases with both e-gift cards and fake credit cards. Once the fraudsters know how to get past the security measures and fraud detection signals, they have freeaccess to commit their crimes undetected until the victim discovers the crime.
In a recent blog, Riskified identified a tech support scam run by a fraud ring that convinced innocent victims to give fraudsters access to their computers. “Fraudsters were contacting their victims over the phone, posing as tech support agents. They informed their victims that they required access to their computers to correct a technical error. When the victims gave them permissions, the fraudster made purchases using the victim’s computer and credit card details.”
Fraud rings use the same tactics as smaller, less-sophisticated organized crime; however, they are doing it on a scale that can be hard to comprehend and imagine. The key for merchants to recognize they can be a target is to have the right fraud detection and prevention software working behind-the-scenes to monitor transactions, analyze purchases, and building a databases of customer habits.
Stopping Fraud Rings
Stopping fraud rings begins with fraud detection and prevention best-practices. Merchants must use multi-layered fraud detection technology that is smart and flexible, and employ a range of technologies that can stop everything from the most basic theft attempts to the most sophisticated.
Remember, these fraudsters want to do more than commit chargeback fraud, they seek ways to attack your business and your customers repeatedly. Once they identify a hole in your fraud detection solution, they’ll use numerous methods to penetrate your customer database to get exactly what they want.
The best thing you can do is to be proactive against the threat of fraud rings. Make sure your payment solution can analyze customer data, detect new or unknown IP addresses, and has the technological sophistication to avoid being outsmarted by criminals. Using a solution such as Order Insight allows you to protect your business from both fraud rings and those cardholders who think nothing of committing friendly or chargeback fraud. The more data you can collect and analyze, the easier it is for you to outsmart even the most committed of fraudsters.


As e-commerce continues to grow, merchants must focus on the practicalities of this evolving shopping paradigm. Customers are keen to use merchant websites and mobile apps to browse, shop, and buy – but they want this on their terms. This means minimal interruptions, no complications, and guaranteed security.
Customers primarily want a seamless and secure front-end experience, letting them shop with minimal concerns over data security. To deliver this, merchants must shift focus from a shiny website and app to addressing the ongoing threats to payment security and chargeback fraud.
Payments security and the chargeback fraud applications must not be overlooked in the rush to deliver on customer demands. With the continued demands by customers for a true omnichannel experience and the buy-anywhere experience, fraudsters are lurking in the shadows ready to seize on merchant and customer missteps.
Simply put, there should be no excuses to slip up on e-commerce security. The tools, technologies, knowledge, and experts are readily available for all levels of merchants. Customers expect merchants to secure and protect their transactions.
Trends Shaping E-Commerce
The fight to stand out in the crowded digital marketplace can be a daunting prospect. The challenge for all CNP merchants is in competing with digital goliaths. In knowing the trends shaping e-commerce and m-commerce in 2018 and beyond, merchants can achieve and maintain a competitive.

  • Automated return process. This solves one of the lingering problems with e-commerce – buying products sight unseen. An automated return process can limit chargebacks and friendly fraud along with enhancing customer satisfaction. Update your return/refund policy to respond best to the way customers are shopping and buying.
  • M-commerce adoption. The m-commerce sales numbers are only increasing, which highlights the need for merchants to shift focus to a seamless and secure mobile app experience. Brand loyalty depends on a successful customer experience.
  • Personalization. Virtual assistants, instant messaging marketing, and customized page display. Customers want the brick-and-mortar personalization experience extended to their m-commerce and e-commerce shopping.
  • Customer insecurity. Today’s customers know the risks of e-commerce, the threat of fraud and data breaches. Customers must have confidence in merchant payments security. Remind customers that password requirements and security measures are for their benefit.

More and more customers are “preview shopping” online before visiting a brick-and-mortar store. The omnichannel experience gives merchants the chance to capture customers both in-store and online. However, it all comes down to providing customers a truly personalized, dynamic, secure, and customer-friendly shopping experience.
E-Commerce Security of the Future
How, when, and where customers do their shopping are the biggest influencers on how e-commerce security is evolving. What we know today is that chargeback fraud prevention and payments security as a whole cannot remain static. What worked in the past cannot be counted on for the future.
The shiny new omnichannel experience that delivers on customer wants must not exclude merchant, issuer, and acquirer demands. As sales technology continues to evolve, payments security must keep pace – outsmarting the fraudsters and knowing the potentials for failure.

  • Verified by Visa in 2018. In April 2018, Visa is making changes to its Verified by Visa program to phase out static passwords and problems with its enrollment process. These changes are being made to address threats to customer security.
  • Mastercard Identity Check. Often referred to as selfie pay – Mastercard allows customers to verify their identity with a photo of their face or a digital fingerprint. Purchase speed and authentication happens immediately, giving merchants and customers what they want.
  • Real-time security. The customer transaction happens instantly, requiring merchants to provide real-time verification and authentication. This depends on completing back-end fraud and authentication checks while the customer is browsing and adding items to their cart.
  • General Data Protection Regulation (GDPR). In May 2018, GDPR replaces the EU Data Protection Act. This legislation places new demands on merchant responsibility for data security.
  • Multilayered intelligence. Multilayered intelligence extends to merchant-customer knowledge and using the right security solution at the right time. The guessing is eliminated with a multilayered approach.

The good news for merchants is that the future of e-commerce sales is bright. The even better news is that the technologies to secure these transactions is keeping pace. However, there are still lingering questions about how artificial intelligence, cryptocurrency, the Internet of Things, drone technology, and the use of robots can and will impact e-commerce security.
Do Not Stand Still
If there is one thing we know for sure, it is this: change is coming and it’s coming fast. Merchants must be ready to evolve and anticipate customer demands and fraudster threats. The proactive approach is a must. This means acting today to be ready for tomorrow.
Know that the tools, technologies, and expertise are available to you. It’s time to take the first move and be ready to seize the opportunities of e-commerce in 2018.

One of the most common questions we get asked is around chargeback accounting. Admittedly, this is a fuzzy area. You’ve likely done a Google search and have come up with not much information about accounting and chargebacks.
The truth here is that it’s hard to provide definitive answers about chargeback accounting. This key component of business management is unique for each individual business and the software tools that are used. However, this doesn’t mean that we’re going to leave you stranded.
We’ll look at the challenges of chargeback accounting and provide a refresher on how you can prevent chargebacks. We do want you to know that you can always contact us with your questions – our team of experts is here to help you. We can provide you with better help once we know what accounting software and payment solution tools you’re using.
Challenges of Chargeback Accounting
Chargebacks can be confusing. This is a fact. However, we’re doing our best to eliminate the myths and confusion surrounding chargebacks. Knowledge is power and the more you know about chargebacks – the further ahead you are.
Chargeback accounting is different for each merchant. The answer: it depends – really does apply when it comes to chargeback accounting.
When getting ready to talk with a payment solutions expert about your chargeback accounting, remember these key points:

  • Accounting software. The options in accounting software are deep, and finding the right solution can be a challenge.
  • Our tip: Work with your payment solution team to find an accounting software solution that works well with your payment solution tools.
  • Chargeback details. Each chargeback is different.
  • Our tip: Have a solution in place that makes it easy to gain insight into your orders and prevent chargebacks.
  • Accounting isn’t straight-forward. Managing the accounting for your business is confusing enough, and chargeback accounting only compounds this.
  • Our tip: Don’t do your own accounting, get expert professional accounting help.
  • Be prepared. The chargeback representment process can be lengthy, and this impacts how and when you can account for chargebacks.
  • Our tip: Use proven payment solution technologies to make your chargeback representment dispute easier.

Overall, we want you to be as prepared as possible to manage chargebacks and ultimately prevent chargebacks from happening. Chargebacks may still happen – knowing how to react and account for these is key. Using proven payment solution tools such as Order Insight or Verifi’s Global Payment Gateway help make it much easier for you to prevent chargebacks.
Best Option Is Preventing Chargebacks
What sets Verifi apart from other companies is that we aren’t going to tell you that chargebacks are a headache or a nightmare. Yes, they are challenging – but they are preventable and can be managed. The key is in taking the right steps to prevent chargebacks and to detect chargeback fraud.
Keep in mind these key best business practices that can help prevent chargebacks:

  • Eliminate customer confusion. Make sure your billing descriptors are clear and obvious.
  • Simple return/refund policy. Keep this policy simple and easy-to-understand. Remember to make it readily available to your customers.
  • Good customer service. A strong customer service team can prevent the confusion that typically results in transaction disputes.
  • Know your customers. Use CRM and payment solutions that provide insight into your customers, allowing you to stop fraud before it happens.
  • Be accessible. Make it easy for your customers to contact you with their concerns on purchases.
  • Clear shipping terms. Require signatures for product deliveries. Ensure your shipping timeframes are manageable.

If you do receive a chargeback, don’t panic. Know that expert professional help is easily available – contact us with your questions. Remember, we won’t overwhelm you with any misconceptions about chargebacks – our goal is to give you the facts and support your need to prevent chargebacks and to stop chargeback fraud.
Learning More About Chargeback Accounting
As we highlighted above, chargeback accounting is different for each unique business. One of the best approaches is to learn all you can about chargebacks so you know which questions to ask when interviewing payment solution partners.

To learn more about chargebacks, browse our Resource Center and Knowledge Base. As always, you can contact us with any questions you have.

As a merchant, you’ve got a lot going on. You’re trying to run your business, keep your digital storefront up-to-date, manage employees, stay on top of customer service, and make sure you’re realizing revenue. It’s a lot harder than it looks and small costs can add up to large losses.
This is why it’s important for you to understand chargeback fees and how they impact your business. Too many merchants brush off chargeback fees, not realizing that there is more to chargeback fee than the dollar amount you’re assessed and penalized.
The trickle-down effect of chargeback fees hurts your ability to maintain and run your business. We want you to look beyond the chargeback fee and think about lost revenue, lost merchandise, the time and effort spent trying to fight chargebacks, the damage to your reputation, and your ability to maintain good relationships with your issuers.
Yes, when you add it all up – chargeback fees are costly. The good news is this – chargeback fees are avoidable with a strong chargeback management strategy.
What is a Chargeback Fee?
It’s important to understand that chargebacks and chargeback fees are a universal merchant problem. These fees hurt all merchants, regardless of size or financial status. Chargebacks drain your profits, eat into time that should be spent building your business, and waste resources.
A chargeback fee is assessed to you by your acquiring bank. The chargeback fee is used to cover chargeback-related costs accrued by your acquirer. Depending on your acquiring bank, the chargeback fee can vary from $20 – $100.
Every dollar lost to chargeback fraud costs you an estimated $2.40. In other words, a $100 chargeback fee costs you $240. If you’re a high-risk merchant, you face higher chargeback fees and must pay other program fees – making it even more critical for you to prevent chargebacks.
The more chargebacks filed against you, the higher your chargeback ratio. This chargeback ratio determines your risk factor and ability to process payments. The higher your chargeback ratio, the more unlikely you are to maintain good business relationships with your credit card issuers. (Hint: if you don’t know your chargeback ratio, we want you to contact us and we’ll help you out. This is a very important piece of data that you must know.)
How Can I Prevent Chargeback Fees?
To put it bluntly, the best way to prevent chargeback fees is to prevent chargebacks. Now, don’t walk away in frustration with this blunt answer. Keep reading and learn how you can create a chargeback prevention strategy to fight chargebacks and the subsequent chargeback fees.
It’s worth your time and money to improve your business and payment processes to stop the preventable losses that come with chargebacks and chargeback fees.

  • Eliminate customer confusion. Make sure your billing descriptors are clear and obvious.
  • Simple return/refund policy. Keep this policy simple and easy-to-understand. Remember to make it easily available to your customers.
  • Good customer service. A strong customer service team can prevent the confusion that typically results in chargebacks.
  • Know your customers. Use a payment solution that provides insight into your customers, allowing you to stop fraud before it happens.
  • Be accessible. Make it easy for your customers to contact you with their problems.
  • Clear shipping terms. Require signatures for product deliveries. Ensure your shipping timeframes are manageable.

Along with these better business practices, you can benefit greatly by opening up the lines of communication between yourself, your customers, and your issuers. When everyone involved in the sales process is able to communicate easily, most issues can be resolved without a chargeback ever being filed.
Learning More about Chargeback Fees
Use the following Verifi resource to learn more about chargeback fees and limiting chargebacks. Remember, you can contact us with any questions about chargebacks.

Remember to browse our Resource Center and Knowledge Base for additional Verifi chargeback

We’re just going to come out and say it: you, as a merchant, do have chargeback rights. There are too many misconceptions, myths, half-truths, and outright lies about merchant rights. Our goal with this article is to put an end to this misinformation about credit card chargeback merchant rights.
We want you to know this: you have rights and you must exercise your rights. Failure to do so only reinforces the confusion surrounding what it means to be a merchant in the 21st century. We are on your side. Your issuers are on your side. Your acquirers are on your side. Your customers are on your side.
Merchants Need to Know Their Rights
“The chargeback process is broken.” “The credit card chargeback process is designed to hurt merchants.” “Merchants are helpless in the fight against credit card chargebacks.”
No. No. No.
The first step in learning about your rights is in reviewing the documentation provided to you by Visa, Mastercard, Discover, and American Express. These major credit card issuers have rules and regulations in place that protect you from acts of friendly fraud and chargeback fraud. When you adhere to issuer regulations, you are extended protection from chargebacks.
The rules around return and refund policies, for example, are designed to protect you from unwarranted returns. Make sure you’re up-to-date on the rules and regulations attached to your issuer – doing so extends your merchant chargeback rights and protects you from chargebacks.
Along with the protection extended to you by issuers, don’t forget these key protection merchant protection measures.

  • Reason codes. Reason codes give you insight into why the chargeback was filed. In some cases, the reason code clearly specifies that the cardholder must work with you to solve the problem.
  • No cash-back transactions. Chargebacks cannot be filed as a cash-back remedy for a disputed transaction.
  • Late delivery. If the product arrives late, the customer cannot automatically file a chargeback. The customer must first attempt to return the item to you before filing a chargeback.
  • 15-day waiting period. The issuer must wait 15 days after a customer return to file a chargeback. This gives you time to communicate with the customer and to process a refund.
  • Purchase price only. The chargeback value only extends to the cost of the product and doesn’t include shipping, handling, and other surcharges.

We urge you to skip over blog posts and articles that spread misinformation about an anti-merchant/pro-customer chargeback process.
The chargeback process is not positioned against you – it’s designed to work for everyone involved.
The Right of Chargeback Representment
Perhaps your most important credit card chargeback right is that of representment. We want you to dispute chargebacks and take full advantage of your rights of representment. Doing so strengthens the chargeback process and sends a clear message to fraudsters and thieves that you will not stand idly by and accept chargeback fraud.
True, disputing a chargeback does take work – but when done right, the payoff is huge. The key to a successful chargeback representment is in being prepared. Make sure you’re using the tools and resources that allow you to easily collect the compelling evidence required to win your representment case.
The chargeback representment process is the best way for you to highlight fraudulent chargebacks – proving that you won’t be bullied by theft and fraud.
Learning More About Merchant Chargeback Rights
When it comes to your chargeback rights – the more you know, the better. Use the resources below to learn more about your credit card chargeback rights.

Remember to browse our Resource Center and Knowledge Base for more articles and content about chargebacks and your merchant rights.


All merchants are realizing the buzz around the omnichannel experience, and it is not going away. For merchants who started with a brick-and-mortar store and those who started with e-commerce sales, omnichannel sales may be a pressing and driving concern.
Customers want to be able to browse, shop, interact, pay, and receive their goods how and when they want. This has spawned a new retail experience that includes a range of touch points with a merchant, including websites, mobile apps, in-store experience, customer service, and delivery of the purchase. The customer doesn’t really care how this fits together, they simply want a seamless experience across all channels – the same look-and-feel and ease-of-use is required for the modern customer.
To deliver on a true omnichannel experience, merchants must think of the entire shopping and sales experience. The mobile app must have a similar design and options as the website, which must provide customers access to the same inventory as the retail store, and the customer service staff (brick-and-mortar or online chat) must be aware of all the same information. To complicate matters, the payment methods across these channels must be the same; not delivering on this can mean customers may walk away from full shopping carts (online and in-store).
The omnichannel experience cannot happen in isolation. Every aspect of the business, from the marketing, inventory, customer service, delivery, and technical support, is involved in delivering on this shopping experience.
Omnichannel Realities
A seamless, frictionless shopping experience is the ultimate goal for the merchant. Delivering on this while securing fraud prevention throughout is the way merchants can gain and keep customers. When done right, the omnichannel experience makes it easy for customers to buy, which encourages strong brand loyalty. As merchants know, the stronger the brand loyalty, the easier it is to retain and gain more customers.
In a Harvard Business Review study of 46,000 customers of a major U.S. retailer from June 2015 to August 2016, some important lessons were learned about omnichannel customer habits.

  • High use. 73 percent of shoppers surveyed used multiple channels during a single shopping experience.
  • High desire. Customers want to take advantage of multiple channels offered by the merchant. For example, they use online coupons, interactive catalogs, buy online and pick-up in store, etc.
  • High value. The more channels used by the omnichannel customer, the more money that will be spent. The study shows that customers who used more than four channels spent on average 9 percent more in-store, compared to customers who used only one channel.
  • High pay-off. Customers who do online research of both the merchant and competitors spend 13 percent more than those only visiting in-store.
  • High brand loyalty. Six months after an initial omnichannel purchase, these customers completed 23 percent more repeat merchant visits, and were more likely to recommend the merchant and brand than those who only accessed the merchant through one channel.

So, yes, the omnichannel experience is key to all types of merchants, regardless of how the business started – online or brick-and-mortar. The question, then, becomes how best to deliver and secure the omnichannel experience.
Fraud Prevention for Omnichannel
The more channels in the omnichannel experience, the more data that is created, requiring the merchant to strengthen and diversify their data protection. What works for one channel does not work for all of the channels. Many merchants neglect this fact and assume that because the website has an effective fraud prevention solution, the same solution can be used across the board with mobile apps, customer service, emails/newsletters, and any other channels.
Fraudsters prey on merchants who take this lackadaisical approach to omnichannel fraud prevention. Using intelligent technology and fraud tactics such as card testing, fake eGift cards, counterfeit fraud, and stolen credit card data, fraudsters attack each channel looking for holes in the fraud prevention solution.
Often, by the time the security breach has reared its ugly head, the customers are long gone and the merchant is left scrambling. Customers who are burned by a merchant do not return to give this merchant a second chance. Along with providing a perfectly seamless and frictionless experience on the front-end, customers expect that the back-end of the entire omnichannel is secured against fraud and security breaches.
Multi-layered fraud prevention technology that is intelligent and invisible to the customer is the ideal solution. Merchants must use the right fraud solution for the right situation – each channel should have its own level and type of fraud prevention. The key to getting this right is in working with fraud prevention experts who have real hands-on experience with omnichannel fraud prevention.
Your customers are flipping from channel to channel – visiting you in-store, browsing your products online, downloading digital coupons and catalogs, buying online and then picking-up in-store. You must deliver on all aspects: secure data, fast and seamless online channels, knowledgeable in-store staff, and no delays in payment and delivery.
Learn more about the demands of the omnichannel experience and how you can successfully capitalize on the advantages of this new shopping paradigm. And contact us to learn more about Verifi’s solutions and omnichannel fraud prevention expertise.

When it comes to chargebacks and your business, the more you know the better. Our goal is to provide you with answers to your questions about chargebacks so you can make your best, informed decisions.
There are no secrets when it comes to chargebacks and payments, particularly when it comes to knowing how to fight chargebacks. It is 100 per cent possible for you to prevent chargebacks and to effectively fight any chargebacks you do receive. However, to do so you must follow some proven chargeback and payments recommendations.
Always refer to the documentation provided to you by credit card associations. Companies such as Visa, Mastercard, American Express, and Discover have very detailed rules and regulations regarding chargebacks best-practices.
What Is a Chargeback?
Chargebacks happen when a customer contacts their credit card company and asks for a reversal of a charge on their credit card. Credit card chargebacks were initially introduced as a method of consumer protection. This was a result of concern over the ease of credit card theft and fraud.
Now, chargebacks have become more than simply a way to protect consumers from fraud and theft. In fact, the tables have turned and many people have learned to use the chargeback process to their advantage and commit fraud and theft against you, the merchant.
How to Build a Chargeback Representment Case
Knowing how to fight a chargeback is a huge advantage when it comes to standing up to fraudsters and protecting your business. When fighting chargebacks and building your chargeback representment case, keep in mind these tips:

  • Speed matters. The more quickly you can respond to the chargeback the better. Responding quickly depends on having ease of access to purchase and customer details.
  • Be proactive. By monitoring your customer and purchase activity, you can see patterns in returns, sales numbers, and issuer charges. This gives you some insight into areas for risks and allows you to prevent chargebacks before they happen.
  • Know the facts. To successfully fight a chargeback, you must be mistake-free with your chargeback rebuttal letter or with the compelling evidence. Remember, you don’t have a lot of time to build your representment case, so you must have easy access to the required evidence.
  • Know the reason code. The reason code should tell you everything you need to know about the chargeback. This code provides details on the evidence required, the timeline you have to prepare the evidence, the reason for the chargeback, and additional details. Make sure you have easy access to the reason code documentation for each of your credit card issuers.
  • Communicate. Most chargebacks can be prevented when the lines of communication between the merchant and the customer are opened. Often, the chargeback is the result of confusion or questions about the credit card charge. Also, remember to communicate with your acquirer while building your representment case.

When deciding if you’re going to fight a chargeback or not, it’s important to understand what you’re getting into. Many merchants rush into the dispute process without being fully prepared, which ends up costing more money, time, and resources.
We want you to know the facts on the chargeback dispute process and to be fully prepared. This comes down to having quick access to information about the disputed purchase including, cardholder details, delivery information, receipts, proof of authorization, refund/return policy details, and product/service descriptions. This is important information to build your representment case.
You can fight chargebacks and win. It just takes some up-front preparation and access to the right information and knowledge. Many merchants rely on payments experts to help them prevent and fight chargebacks.
Learning More About Preventing Chargebacks
These Verifi resources provide you with more information about how to fight chargebacks and chargebacks in general. You can contact us with any questions about chargebacks, we are your trusted chargeback team.

Browse our Resource Center and Knowledge Base for more articles, whitepapers, videos, and guides.

We’ll cut straight to the chase: chargeback reason codes should never be confusing, overwhelming, or frustrating. The key to removing the doubt and confusion around reason codes lies in having easy access to the right information.
Chargeback reason codes provide the reasons for the chargebacks you’re dealing with. Each chargeback comes with its own chargeback reason code. It’s in the chargeback reason code details that you can learn why the chargeback was filed, the amount of time you have to file a chargeback dispute, and the compelling evidence requirements for the dispute.
We are on your side and want to empower you with access to information about all things chargebacks. There should be zero confusion, frustration, or fear with this critical aspect of managing your finances.
Credit Card Companies and Chargeback Reason Codes
Most of the confusion over reason codes comes from the lack of similarity across credit card companies. Each credit card company has its own reason code format and numbering system. Don’t ever assume that a reason code from Visa means the same thing as reason code for Mastercard.
Each chargeback reason code is two, three, or four digits and includes a short description detailing the chargeback. Here’s a look at the reason codes for the same scenario from the major credit card companies:

  • Visa: Reason Code 30 Services not provided or merchandise not received.
  • Mastercard: Reason Code 4859 Service not rendered.
  • Discover: Reason Code 4755 Non-receipts of goods or services.
  • American Express: Reason Code C08 Goods or services not received or partially received.

This clearly demonstrates how and why it’s easy to get confused when dealing with reason codes. The above example illustrates that one scenario – the customer didn’t receive the order – can have four distinct reason codes and descriptions.
Remind yourself of this example when you’re struggling to interpret chargeback details. It may not be possible for you to know every aspect of reason codes. However, when you have easy access to the information that can answer your questions and enable a successful chargeback representment, you’re ahead of the game. 
Chargeback Reason Code Categories
The 151 chargeback reason codes across the four major credit card companies can generally be grouped into five different categories. Knowing these categories helps you further understand the chargeback and identify any problems within your payment solution, customer service, and sales processes.

  • Fraud or No Authorization. Applies when real fraud has occurred and the customer’s card has been violated, or when the customer doesn’t remember the transaction but doesn’t believe their card has been compromised. For example, the customer’s card was charged multiple times for one transaction.
  • Cancel Recurring Billing. The customer is disputing the renewal of subscription services such as a food delivery service or newspaper delivery. For example, the customer cancelled the subscription but was still charged for an outstanding balance.
  • Products or Services. This category applies to claims related to the quality of the merchandise or services received. For example, the customer claims the product doesn’t match the online description.
  • Liability Shift. This category applies to any chargebacks related to non-chip credit cards.
  • Other. A broad category that captures any chargeback claims that do not fit in the above categories. For example, there isn’t a reason code for the customer’s dispute or the cardholder is disputing the exchange rate for an international transaction.

Reading the category descriptions carefully provides some insight into ways you can improve your processes to prevent chargebacks. Pay attention to the types of chargebacks you receive, and look for patterns that highlight problems within your solution. For example, perhaps your website descriptions are out-of-date, or it is complicated for your customers to cancel subscriptions, or there are holes in your fraud prevention solution making it easy for credit card fraud.
Chargeback Reason Code Resources
We urge you to browse the following Verifi and non-Verifi resources for more information about chargeback reason codes. Remember knowing the reason code details is critical in a successful chargeback representment.

You can contact us at any time to ask us your questions about chargeback reason codes. We are here to help you – there should be no mystery when it comes to chargebacks and reason codes.


The revenue boost that comes from the holiday sales season cannot be denied. The cost of post-holiday sales chargebacks also cannot be denied. While the holiday season is the best season there is for merchants, once the holiday heyday is over it can be the costliest season.
Post-holiday sales chargebacks are a real thing. These chargebacks often come in the shape of true fraud, friendly fraud, and return fraud. There is no time like the present to improve your fraud and chargeback prevention program to prevent the pain of post-holiday sales chargebacks.
Proactive Real-Time Chargeback Prevention
Real-time chargeback prevention is a must during the holiday season (and all year-round). The goal for every merchant should be to maximize good sales and to prevent the post-holiday sales chargeback cycle. Remember, it’s not only fraud, it’s customer remorse that comes back to haunt merchants in the shape of ongoing fraud, friendly fraud and customer churn.
The tricky part to this is walking the fine line between a too rigid chargeback prevention policy and a too lax authorization policy. Many merchants become excited with the prospects of high sales numbers and neglect to monitor for high risk transactions. Merchants must know the who, what, when, where, how, and why of their customers. Maintaining as much customer and transaction detail as possible is key in keeping the good sales flowing and stopping the true fraud from happening.
The first step to the post-holiday sales chargeback prevention program features implementing a multi-layered fraud prevention technology.

  • IP intelligence. Deep analysis of the IP Address used for the transaction to monitor possible risks associated with the location.
  • Device fingerprinting. Uses device information and reputation scoring to validate the transaction.
  • Address Verification Service (AVS). Verifies the address connected to the cardholder using a comparison look-up.
  • 3D Secure. Uses a three-domain model to validate credit and debit card purchases.
  • Tokenization. Account and card information is replaced with a secure token identifier.
  • Geolocation. The location of the cardholder and the customer are compared.
  • SSL. Provides a secure encrypted communication between customer devices and payment solutions.
  • Merchant Co-Op. Transactions are compared against a list of orders, looking for matches with fraudulent accounts.

The holiday sales season is already complicated with new employees to train, extra stress on the website, increased customer queries, and more demands on customer service. All this adds up to more chances for fraudsters to slip through and affect an already overwhelmed manual chargeback process. Take cues from fraudsters and use advanced technology to stop fraudsters in their tracks. The more bad sales stopped at year-end, the lower the rate of chargebacks in the new year.
Returns Should Never Become Chargebacks
Many merchants neglect the power of their posted return/refund policy. This policy is the opportunity for merchants to help both themselves and their customers. Think of the customer who bought the wrong gift – now this customer simply wants to return the purchase. However, this may not be possible due to an overly rigid and limited return/refund policy.
Your customer may think they have no other choice than to file a chargeback. When this customer clicks Dispute Transaction, they’re probably not aware of the cycle that is about to be started. All they know is that they made a mistake and need to return the item. This return fraud is not a malicious act – the customer simply has no other recourse.
Enter the merchant and a special post-holiday return/refund policy. At this time of the year, and extending into the first four or five weeks of the new year, it pays to have a more open and flexible return/refund policy.

  • Longer return/refund window. Increase the standard return/refund policy for holiday purchases.
  • 24/7 customer service. Maintain extended customer service hours and staffing for the duration of the extended return/refund policy. Encourage customers to contact customer service with any problems.
  • Proactive communication. Follow-up with customers who made purchases during the holidays. Remind them of the extended return/refund policy and give them the customer service contact information. Make it easy for customers to connect.
  • Wiggle room. Merchants who allow their customer service team to use their best judgement with returns/refunds experience greater customer satisfaction and brand loyalty. Trust the customer service team to be flexible with the rules when it makes sense – especially if a chargeback is the only other option for the customer.
  • Promote the return/refund policy. Merchants would do well to promote their special post-holiday return/refund policy just as they promoted their Black Friday, Cyber Monday, and Christmas Eve sales.

This special post-holiday sales approach to returns/refunds serves double duty for merchants. In the first instance, it makes it easier for customers to resolve their issues without filing a chargeback. In the second instance, these well-documented policies can be used as compelling evidence should a post-holiday sales chargeback occur.
Take Action Today
Being busy is not an excuse. Not knowing is not an excuse. Ready access to chargeback prevention experts is the solution.
You can take positive action to protect your business from the cumulative costs of post-holiday sales chargebacks. Contact us today to discuss how to maximize holiday profits and minimize chargeback losses.

The boom in e-commerce and m-commerce has resulted in new demands on merchants to update payment and authorization solutions. Gone are the days of phone or mail orders – now your customers want to do all of their shopping online.
The online marketplace means reduced overheads and opportunities to sell worldwide, but it also opens you to increased card not present (CNP) fraud risks. It’s more of a challenge to verify the identity of your customers when you can’t see them, talk to them, and verify their credit card signature.
You need to trust the customer, just as the customer needs to trust you. In the early days of e-commerce, many shoppers were reluctant to provide their credit card information online to merchants they did not know. Now, your customers want to shop online and expect guarantees that doing so doesn’t expose them to criminals.
What is CNP Fraud?
CNP fraud is a real threat and it can happen more easily than you may realize. Many merchants are overconfident with their ability to manually notice or detect fraud. Unfortunately, for these merchants, sooner than later they will become victims of CNP fraud.
The first thing you need to know is that you’re the first line-of-defense against CNP fraud. It’s up to you to protect your business from fraud risk. Fraudsters are looking for merchants who have not implemented fraud detection and prevention solutions.
Make sure you’re well-equipped to prevent these CNP fraud tactics:

  • Card testing. Fraudsters make small purchases with stolen credit card details to test the data. When the card data works, subsequent large purchases are made from the same merchant.
  • Diverted delivery. The delivery is sent to an address that is not connected to the credit card. The address mismatch is not detected by the address verification service.
  • Stolen credit cards. Criminals purchase stolen credit card information and use this to make fraudulent purchases.
  • Fraudulent gift cards. Using stolen credit card information, criminals buy gift cards and then use these gift cards to make additional fraudulent purchases.
  • Online skimming. Criminals look for flaws in your payment solution and then hack the customer data. Criminals use this data to mimic the customer, enabling them to make what appear to be valid purchases.

CNP fraud hurts you in multiple ways, with lost revenue, chargeback fees, shipping costs, lost product, and the costs of fulfilling the order.
How to Detect and Prevent CNP Fraud?
As highlighted above, it’s in your best interest to invest in a proven CNP fraud detection and prevention solution. Not only is there the revenue loss to consider, there is also the damage to your brand and the risk of being dropped by major credit card issuers.
It’s easy to get caught up in the latest news about fraud detection technologies or to attempt to use every tool available. The best approach is to implement a CNP fraud detection and prevention strategy that is as unique as your business.
Consider the following:

  • Use the right tools for your business. Not every tool available from fraud prevention experts is going to work for you. Working together we can determine what levels of security you need.
  • Use analytics to get the complete picture. Using data insights, you can see what is and isn’t working in your fraud prevention strategy. Know who you’re doing business with, what their purchase habits are, and fine-tune your fraud prevention strategy to meet these demands.
  • Be proactive against CNP fraud. Time is of the essence – the longer you wait to review your fraud prevention strategy, the higher your rate of fraud risk. Don’t assume you and your customers are protected – know you’re protected.

There is a range of technologies available that can keep your customer data and payment solution safe and secure. From device fingerprinting technology to AVS to merchant co-op to tokenization – the ideal solution lies in combining the right technologies to give you a customized multi-layered fraud detection and prevention solution.
Learning More About CNP Fraud
Rely on these Verifi resources to learn more about CNP fraud and how it impacts your business.

Browse our Resource Center and Knowledge Base for more information on fraud prevention.