Many companies would like you to believe that chargeback management is a complicated and onerous process. We’re not like other companies. We want you to know what we know about chargeback management so you can make smart, informed decisions about protecting your revenue.
Feel confident knowing that you have the knowledge to make informed decisions about best practices for chargeback management. This article takes the confusion and mystery out of chargebacks and gives you the information, access to tools and technology, and expert advice to detect, prevent, and respond to chargebacks.
Chargeback Management First Steps
It’s important that you don’t just accept chargebacks as a cost of doing business. Chargebacks often indicate that there are ways you can improve your business and customer communication processes.
A proactive response to a chargeback allows you to respond quickly and make adjustments that can prevent future chargebacks from happening. Use the following plan as a guideline when formulating your own chargeback response plan.

  1. Why was the chargeback filed? Review the reason code and chargeback notification details. Collect as many details as you can about the disputed transaction.
  2. Is this a valid chargeback? Is this a case of fraud, or is it a valid customer complaint? Knowing this is key in deciding whether to accept or dispute the chargeback.
  3. Review your customer service. Look for ways you can prevent future chargebacks. Often, merchants overlook key details such as billing descriptors, email confirmations, clear refund/return policy, and customer information management.
  4. Get expert help. You may not be an expert in chargebacks, so you can’t be expected to solve this problem alone. Rely on a team of chargeback experts to review your sales and payment processes to identify any areas for improvement.

Whatever you do, don’t ignore the chargeback and pretend it didn’t happen. Get the answers to these questions so you can make an informed decision about your next steps.
Merchants should remember to review the documentation provided to them by their issuer. Each major credit card company has detailed guidelines and best practices to help you prevent and manage chargebacks.

For example, Visa recommends in their Chargeback Management Guidelines for Visa Merchants, that merchants do the following to monitor chargebacks:

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

Having a solution in place that allows for the monitoring and tracking of customer data, sales statistics measurement, and which supports chargeback representment can take the stress and worry out of chargeback management.
Understanding the Chargeback Representment Process
The chargeback representment process allows merchants to dispute invalid chargebacks. To do so effectively, you must provide evidence that clearly proves the transaction was completed properly and was approved by the cardholder.
The evidence required for a successful chargeback representment case is based on the chargeback reason code. In general, however, merchants are expected to submit a chargeback rebuttal letter that summarizes the evidence proving the transaction is valid. Typically, you must provide evidence that shows the cardholder approved the transaction, your refund/return policy, a description of the product or service from your website, and tracking numbers to prove the item was delivered.
To help you succeed in your chargeback representment, do the following:

  • Respond quickly
  • Know the chargeback representment process rules
  • Collect compelling evidence
  • Know the specific reason code
  • Review customer data
  • Ask for help

You can win a chargeback representment case; however, it’s much easier and more cost-effective to do so when you rely on expert solutions and advice. Having the right solutions in place that make it easy to collect compelling evidence and to understand your customers can make the difference between representment success or failure. 
Learning More About Chargeback Management
We’ve put together a short list of resources that can help you learn more about chargeback management. Please contact us with any questions about chargeback prevention solutions, chargeback representment, and best practices for chargeback management.

Browse the entire Verifi website to learn more about chargebacks.


For many people, their understanding of class action lawsuits comes from movies. The victories of the small-town community that rallied together under the fearless advice of their lawyer is both inspirational and encouraging.
However, no one in the payments industry wants to be involved in a class action lawsuit – issuers, merchants, or customers. The cost, stress, and unpredictable outcome can often be more troublesome than the basis for the lawsuit. Successful or not, class action lawsuits change how issuers, merchants, and customers interact and communicate.
Many believe that the threat of a class action lawsuit on behalf of consumers against card-issuing banks is the only right to protection customers have against big banks. While arbitration is always an option, some believe that class action lawsuits are more powerful and effective.
A recent Congressional ruling has turned the tables on how customers can settle disputes with issuing banks. This October 2017 ruling has removed the right of customers to file class action lawsuits against issuers – meaning that customers may be left with arbitration as their only form of recourse in settling a transaction dispute to their satisfaction.
While there are pros and cons to both sides of this decision, one thing is clear: this ruling does not solve the problems plaguing the payments industry. The chargeback process continues to be a remedy for consumers and merchants in need of improvement and updates.
Arbitration for the Issuer, Merchant, and Customer 
It’s important to take a high-level look at how the ruling against class action lawsuits really does impact issuers, merchants, and customers. The reality is that no party involved in payments wins with this ruling.
For issuers, while the threat of costly class action lawsuits is no longer a threat, the costs of arbitration cannot be overlooked. Although arbitration may lead to faster settlements and less of a long-term drain, issuers must still deal with arbitration costs and resource demands.
For merchants, now that customers have lost their right to file lawsuit disputes against issuers, the threat of secondary chargebacks might be heightened. Secondary chargebacks are often a forgotten threat for many merchants, who incorrectly assume that once a chargeback is resolved that the issue is closed.
For consumers, the right to file a class action lawsuit against a bank was one that provided them a wider avenue of choice in resolving transaction disputes. With this right dismissed, customers may be forced to rely on arbitration as their sole recourse for protection and recovery – typically resulting in much lower settlements.
When thrown in a pot and brought to a boil, the collective impacts of the Congressional ruling mean that everyone in payments may be subject to entering an antagonistic relationship. Customers, more than ever, are now more likely to turn to chargebacks. Merchants are at the mercy of increased chargeback threats and the fees that come with chargebacks. Issuers are left with an even greater tarnished public image, making it hard to ensure customer loyalty.
The obvious solution to this is communication and collaboration. Open collaboration between issuers, merchants, and customers can mitigate the chargeback problems plaguing the payments industry.
The Broken Chargeback Process
The chargeback process could be better. In fact, it could be a lot better – all it takes is getting the right people talking and working together. This, as merchants and issuers know, is easier said than done.
No one wants to be involved in a chargeback: the customer simply wants their problem fixed, the merchant wants to help the customer, and the issuer wants to support the customer, ensuring a good experience.  With merchant-customer communication and issuer-merchant collaboration, the pain points of the chargeback process can be eliminated:

  • Cardholder confusion. The cardholder doesn’t recognize a charge or doesn’t know who to contact with their problem. Their only recourse is to initiate a chargeback with their issuer.
  • Issuer lacks knowledge. The issuer doesn’t know the customer’s history or the real reason for the chargeback. The issuer has no way to easily identify fraud.
  • Merchant is left out. The merchant learns of the chargeback only when it’s too late to solve the problem with the customer. Now the chargeback process has started and it can’t be stopped.

Verifi’s Cardholder Dispute Resolution Network (CDRN) was designed with collaboration and communication as the focus. With this payment solution, Verifi is able to offer merchants, issues, and customers the support and communication avenues they need to solve their problems outside of the chargeback process.
Doing so restores the trust and understanding among everyone involved, and provides an opportunity to better prevent future chargeback and fraud risks. Rather than pitting the customer against the merchant and issuer, or the merchant against the issuer, solutions such as CDRN work to solve the broken chargeback process and improve customer experience.

A hover of the smartwatch and the payment is done. A quick tap on the mobile app and the purchase is authorized. An instant sync and customer loyalty points are up-to-date and ready to use. Digital gift cards, plane tickets, passports, and access keys….
This is mobile wallet technology in action. What started as an early-adopter technology in 2015 has boomed into the de facto payment and e-commerce standard. Customers crave the simplicity and convenience. Merchants appreciate how easy it is for customers to pay without ever tapping on a keyboard.
Mobile wallets are here to stay. Now is the time to learn the facts on mobile wallets and get ready for the next big wave in omnichannel payments.
What is a mobile wallet?
A mobile wallet allows customers to make purchases without ever taking their credit or debit card out of their physical wallet. Using an app on their smartphone, tablet, or smartwatch, customers have the freedom to pay in digital form.
To make in-store purchases, customers hover their smart device over the payment terminal and the payment is authenticated and authorized. Customers can make in-app purchases without entering their payment details. Additionally, customers can receive brand and store offers and loyalty points directly to their digital devices.
Customers are drawn to mobile wallets for one primary reason: convenience. The key for merchants is in delivering on this convenience when customers are ready to pay. This means supporting a wide range of mobile wallet options and paying attention to customer demand for mobile wallet options.
Some of the most popular mobile wallets include: PayPal, Apple Pay, Samsung Pay, and Android Pay. However, merchants are wise to pay attention to mobile wallet trends and monitor which mobile wallets are rising in popularity.
It’s important to remember that mobile wallets also include: digital coupons, gift cards, digital tickets (for events or transportation), identity cards such as digital passports, and digital access keys for buildings and homes.
How can merchants leverage use of mobile wallets?
Merchants who support mobile wallets are able to position themselves strongly in the m-commerce and CNP markets. Customers want seamless, frictionless payment options – this is easily delivered with mobile wallet provider support.
Along with providing customers the ease-of-use they want, overall fraud risk is reduced with the inherent technologies within mobile wallets. This all adds up to big pluses for customers who have to choose between a merchant who does accept mobile wallet payment and one that doesn’t – ease-of-use and security are huge factors in decision-making.
One of the best ways that merchants can take advantage of the benefits of mobile wallets is by providing a consistent omnichannel m-commerce experience. By providing an app and website that has the same look-and-feel, customers automatically feel comfortable with the payment process.
Merchants would be wise to take advantage of the built-in convenience this payment technology provides them – allowing them to easily connect mobile wallets, apps, digital gift cards, and loyalty programs. This allows customers to take advantage of smart device payment options, and enables them continue to benefit from merchant loyalty programs and sales.
The easier it is for your customers to spend their money in your store (brick-and-mortar or digital), the more money yours customers will spend. Customers have come to experience a note of inconvenience when getting to the final checkout step and discovering that the merchant does not accept their preferred payment method.
Merchants should remember the value of having a payment gateway that allows you to leverage customer insights and additional engagement opportunities that can lead to long-term revenue increases.
What should merchants do to prevent mobile wallet fraud?
Mobile wallet technology is inherently more secure than other payment options. This security comes from the built-in tokenization that supports instant authorization and authentication in milliseconds.
Tokenization replaces sensitive account and card information with a non-sensitive token or placeholder. This token is used as an identifier during the payment process. This token can only be traced back to the original account or card data with a master key as part of the tokenization system.
These tokens are created by a Token Service and are issued to the customer’s device by the Token Issuance process. This keeps the entire tokenization process secure and impossible to reverse engineer.
Tokenization is used to secure mobile wallet and m-commerce payments and to secure Tap & Go payments, in-app purchases, and in-app virtual purchases.
While tokenization does not guarantee merchants will be protected from security breaches, it does guarantee that vital customer data is protected in the event of security breach.
It is still important that merchants implement a multi-layered fraud protection solution that provides them extended protection that tokenization cannot provide. Contact us to learn more about device authentication, 2-factor authentication, and geolocation.
How can I learn more about mobile wallets?
For many merchants, mobile wallets technology can seem overwhelming, but the good news is that the benefits to mobile wallets outweigh the barrier to entry. Use the following Verifi resources to learn more about mobile wallets:

Browse the Resources section to learn more about mobile wallets, fraud prevention, and omnichannel sales.

When most people think of fraud, they think of credit card fraud, security breaches, and online theft of digital data. While there are strong reasons for this increased attention to CNP-related fraud, merchants and customers should not forget the threat of debit card fraud.
Many people have a story about a friend who swiped their debit card at a local store and was then later contacted by their bank, alerting them that their debit card had been compromised. Meanwhile, the compromised debit card is still safe in the owner’s wallet, knowing that they have never given out their PIN. Just as easily as credit card fraud happens, so, too, does debit card fraud.
Unfortunately, there is a complacency that so many merchants and customers default to about debit card fraud, which allows fraudsters to continue to steal PIN numbers and copy debit cards.
Merchants and customers must not overlook the threat of debit card fraud. Preventing debit card fraud is possible with adherence to recommendations from banks and customer awareness of the problem.
Merchant Protection from Debit Card Fraud
While customers are the primary victims of debit card fraud, the merchant pays an equally heavy price for this fraud. Remember the friend who had their debit card compromised at a local store? This friend will never return to that store, and, guaranteed, this friend has told everyone he/she knows about the debit card fraud at the local store. Now the merchant has a potentially damaged customer base and is struggling to rebuild brand reputation and customer loyalty.
Compounding these problems are the new issues the merchant has with their issuer over PIN pad security and overall trust. In other words, merchants cannot overlook the real threat of debit card fraud. Keep in mind these fraud prevention measures during debit card purchases and PIN pad security.

  • The customer must insert, swipe, or tap their own debit card.
  • Keep the PIN pad visible on the counter. Do not take the customer’s debit card and insert it into the machine.
  • Treat the PIN pad like cash. Keep it secure and out-of-sight when not in use.
  • Regularly inspect the PIN pad, making sure it hasn’t been tampered with or replaced with a decoy.
  • Stay up to date with any recommendations from the PIN pad issuer and bank regarding debit card security.
  • Contact law enforcement and the bank upon any unusual behavior or changes in the PIN pad.
  • Know your employees and be aware for any unusual behavior.

Merchants are expected to comply with all security recommendations from the PIN pad provider and issuing bank. Failure to comply with these recommendations can result in further problems, should the merchant be a victim of debit card fraud.
Protecting Customers from Debit Card Fraud
Most customers aren’t thinking about debit card fraud risks when they use their debit card to pay for a purchase. However, it’s a good idea for merchants to remind customers of how they can protect themselves from fraud risk.

  • Make sure there is ample space for customers to use their debit card securely.
  • Don’t hesitate to ask other customers to step back from the paying customer.
  • Never swipe, insert, or tap the customer’s debit card for them.
  • Do not enter the customer’s PIN for them.
  • Always give the customer the receipt for the debit card purchase.

The majority of customers appreciate the extra measures to protect them from debit card fraud. These don’t need to be obvious, rather just simple tactics that protect both the customer and the merchant from fraud risk.
Preventing Debit Card Fraud
Just as staying up to date with the latest fraud detection and prevention technology is critical for CNP merchants, it’s equally critical for card-present merchants.
Merchants should use chip-activated terminals to protect themselves and their customers. Most debit cards are chip-activated, allowing customers to tap or hover their debit card or smartwatch to pay for purchases. The tokenization technology in the chip and the terminal encrypt the transaction, providing instant authorization and verification.
Merchants are responsible for updating and maintaining their PIN terminal. If there are problems with the terminal or multiple customers have reported problems with using their debit card, contact the PIN terminal provider.
Learning More About Debit Card Fraud Prevention
The onus is on merchants to protect themselves and their customers from debit card fraud. Merchants who have both m-commerce and brick-and-mortar sales models must be extra vigilant in the face of debit card and credit card fraud. Refer to the following resources to learn more about debit card fraud and best-business fraud prevention approaches.

  • Prevent Debit Card Fraud
  • Get Ahead of Evolving Fraud & Security Concerns in the Post EMV World
  • Secured Data, Reduced Fraud
  • Fraud Prevention & Security Technology

You can always contact us to learn how to best protect your business from fraud.


Merchants need customers. This is a simple fact of business. The challenge for merchants is in attracting and then keeping these customers. Building customer loyalty and convincing these customers to trust the brand are key in customer retention.
This hoped-for longevity often hinges on the first contact the customer has with the merchant. This often occurs when the customer contacts the customer service team with a problem or question. Now the pressure is on the customer service team to find a solution and keeping the customer satisfied. Any missteps during this first interaction can result in a lost sale, chargebacks, friendly fraud, negative social media reviews, and a lost customer.
For most merchants, the value of the customer service team cannot be overlooked. These employees are on the front lines of customer interaction, often dealing with unhappy and even angry people. This is not an easy job nor should its value as a service be overlooked. Solving customer problems, responding to questions, and going above and beyond can be the difference between keeping a loyal customer and losing a customer forever.
But what does this have to do with chargebacks and chargeback protection? To put it simply, the more accessible and well-intended a customer service team presents themselves to customers to provide good service and help resolve problems, the more likely a chargeback can be prevented.
Don’t Overlook Customer Service
To provide good customer service and prevent chargebacks, merchants need to be accessible. Customers are looking for the easiest way to get a resolution to their problem, and, too often, the easy route is to contact their card-issuing bank. When merchants are the key player in communication and able to deal directly with the customer, the problem can be solved and the chargeback can be avoided.
The problem, however, is that most merchants lack the solutions in place to support direct customer-merchant interaction. Along with the implementation of a payment solution, such as CDRN which supports real-time communication with the customer, merchants need to focus on instructing and directing their customer service team to provide helpful resolution strategies.
All it takes to keep a customer happy is a positive interaction with a customer service team member. To ensure and maintain appropriate standards, merchants must work with their customer service team members to reinforce best business practices to build customer loyalty and satisfaction.

  • Be available. An unhappy customer might not have the patience to search for the customer service email address or phone number. Make it easy for the customer to reach out and get help. Include a customer service email link, phone number, or feature a live chat option on every web page and during the payment and checkout process.
  • Be flexible. There are always exceptions to the rule, so consider empowering your customer service team the to make decisions that do not rigidly conform to posted refund and return policies.
  • Be loyal. Cater to your the long-term and VIP customers – especially during the busy holiday sales period. Clear review of your customer’s purchase history can help the customer service team member make a decision on how best to solve the problem.
  • Be proactive. Respond to customer queries quickly and efficiently. Remember, the customer is unhappy and the longer the customer has to wait for a response, the more likely he is to give up and file a chargeback.

While the customer might not always be right, the merchant must keep the customer happy and loyal.
Clear Lines of Communication
Your customers chose you and now you need to work hard to cultivate their loyalty. Don’t assume that because you have a fancy website or mobile app, or because you have the best product, that you’ll be able to keep your customers.
Maintaining customer loyalty comes down to clear and straightforward communication. Interact with your customers to respond to their problems and questions. Be available and make it easy for them to work with you.
Remember that you are not the only choice for the customer, so it’s important that you stand out from the crowd. You can do this with an outstanding customer service team and with the support that a dispute resolution solution such as CDRN provides.
Now is the time to review your customer service practices and to review how you interact with your customers. Don’t wait for the crush of the holiday shopping season to make changes to your customer service policies and payment solutions. Contact us today and our experts can advise on how to put the solutions in place that can prevent chargebacks and keep your customers loyal.


We are awash in data. Never before have people so willingly shared personal information, private details, and key identifying data so willingly. This, of course, is due to how the Internet has evolved to be a space for business and social connection.
Merchants and consumers are the primary beneficiaries of this evolution to an e-commerce network. Merchants who previously sold their goods in brick-and-mortar retail spaces, or relied on the fading world of catalog sales, now have quick and easy access to a global customer base. This global customer base is keen to browse and shop from previously inaccessible merchants.
The snag to this model of “always open for business” is that of security. Merchants are reluctant to talk about e-commerce security for fear over the questions and concerns it can stir up in their consumers. Consumers know that online transactions may involve risk, but darn it, they want that pair of shiny red shoes by tomorrow morning so they’ll risk sharing their banking information online!
These attitudes should not absolve merchants from spending as much time on e-commerce security as they do on their social media marketing. Instead, the prevailing attitudes of complacency should force merchants to act: know the e-commerce threats, know how to prevent them, and know what to do should a breach occur.
Real E-Commerce Threats
Merchants are on the frontlines of e-commerce security – it is up to merchants to know what the threats are and how to defend against them.

  • Cross-site scripting. A JavaScript snippet is embedded in a vulnerable web page and used to access cookie data, impersonate website visitors, and steal private data such as credit card information.
  • SQL injections. An SQL injection can be used to create fake administrator accounts that allow access to secure data.
  • Phishing. Valid customers are tricked by fake emails into updating their account information or changing their password; this data is then stolen and used by fraudsters.
  • Distributed Denial of Service. A DDoS attack strategically overburdens the website’s servers with requests, causing the website to crash. The websites are attacked and then held for ransom by the hackers.
  • Bad bots. These bots infiltrate websites and commit a range of malicious attacks: price scraping, login fraud, fake shopping carts, and site analytic manipulation. In its 2017 Bad Bot Report, Distil Networks revealed that 97% of websites are attacked by a bad bot and that these bots represent on average 15.6% of the website traffic.
  • Man-in-the-middle attacks. Can occur when an insecure WiFi network is used or the website data is not encrypted. Fraudsters can listen in on consumer movements and collect personal data.
  • Malware. Often inserted into the merchant website as a result of phishing or an SQL injection. This malware is used to control the merchant’s website, giving the fraudster complete control and access to the site and data.

Knowing how e-commerce security is threatened gives merchants the power to prevent such attacks. The more merchants know about e-commerce strengths and vulnerabilities, the better.
Real E-Commerce Security
Merchants cannot use the wait-and-see or trial-and-error approach to their e-commerce security. There is little room for error and there is even less chance of recovery from such error. Merchants must be proactive in the face of e-commerce security threats and take preventive action.

  • Multi-layered security. Learn which technologies make sense for your business and how to strategically apply them. Read Fraud Protection Lessons from Goldilocks to learn the advantages of not just relying on an off-the-shelf solution.
  • Be data savvy. Do not store customer data. Regardless of how secure you believe your database may be, stored customer data is a key target for fraudsters. Keep only the information you need to track purchases, refunds, and to use in chargeback representment cases. Use a proven payment gateway that relies on tokenization and complies with PCI standards.
  • Enforce strong passwords. Customers must be instructed to enter a password that uses a combination of uppercase and lowercase alphanumeric characters. Educate your customers on why a strong password is a must.
  • Educate customer service staff. Ensure customer service team members know the facts on e-commerce threats and security. Make sure they understand phishing and know not to provide private customer details over the phone, email, or in chat.
  • Site analytics. Prepare to notice unexpected website traffic by knowing who is visiting your website, how they’re accessing the site, the pages they frequently visit, and other site interactions.
  • Always be up-to-date. Be vigilant about applying software patches and perform recommended software updates.

Along with knowing how e-commerce threats happen and how to prevent them, merchants must also have a plan in place in the event a security breach occurs. This disaster recovery plan should include details such as how customers will be contacted, the media plan, site back-up details, and key contact information for the IT team managing the e-commerce website.
Real E-Commerce Expertise
While all this information may seem overwhelming, we understand that you simply want to sell your products online and minimize your concern about e-commerce threats and complicated security measures. The good news is that Verifi has a proven team of e-commerce security experts who can help you.
Please contact us to find out how you can best protect your business and website from malicious hacks and threats. We will work with you to devise and implement a customized e-commerce solution that keeps your business and customers protected.

Choosing an e-commerce solution doesn’t have be complicated. However, it is easy to get bogged down in feature lists, requirements, and product promises. We want you to have the best information you need to make an informed decision about choosing an e-commerce solution.
Aim for implementing an intelligent e-commerce solution that provides end-to-end payment protection and management solutions. There’s a wide variety of e-commerce fraud prevention technologies available to you. Seeking expert guidance or additional resources on choosing the right one can help you make an informed decision on setting up the ideal e-commerce solution for your business.
Facts on E-Commerce Fraud
E-commerce fraud is a real threat that is not going anywhere. In a recent analysis of their 2016 customer data, Experian identified that Florida, Delaware, Oregon, and New York ranked as the riskiest states for e-commerce fraud. Additionally, this study revealed that cities ranked highest for fraud risk are located close to large ports or airports – making it easier for criminals to reship stolen merchandise.
Compounding this is the risk of data breaches and the ease with which criminals can access customer data. The 2016 Consumer Sentinel Network Data Book, released by the Federal Trade Commission, highlights that of consumers surveyed, 32% reported being victims of data theft. More startling is that for the same time period in 2017, 56% of consumers have been victims of identity theft and ensuing credit card fraud.
This speaks to the need for merchants to protect themselves and their customers with an e-commerce solution that has the intelligence capabilities to detect fraud and theft, analyze customer habits, provide purchase authentication and authorization, and prevent chargebacks.
E-Commerce Solutions for Fraud Prevention
There is no such thing as an off-the-shelf e-commerce solution. Merchants must use a customized e-commerce solution that fits with their business needs, customer types, and payment options.
One of the best approaches is to implement a multi-layered approach that uses the best-in-class fraud prevention technologies. While it is tempting to rely only one piece of fraud detection technology, fraudsters are quick to identify the technology and then overpower it.
With a multi-layered approach, merchants can use the right technology at the right time. When researching e-commerce solutions, look for the following fraud detection technologies:

  • 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 address(es) 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.
  • SSL. Secure encrypted communication protocols between devices and payment solutions.

An e-commerce solution should do more than allow merchants to accept payments – it must have the power to detect and prevent fraud. Ultimately, merchants are responsible for protecting customer data from the threat of data breaches and hacks.
Learning More About E-Commerce Solutions
Learning about e-commerce solutions shouldn’t be intimidating or overwhelming. We provide expert insight on fraud, chargebacks, payments, and e-commerce solutions. As your trusted partner in payments and e-commerce, we’ve put together a short list of resources that can help you make an informed decision.


There is no denying that e-commerce fraud is a real and present threat. While this fraud risk is not slowing CNP sales, it is forcing many merchants to become overly stringent in how they detect and prevent fraud.
The unfortunate trickle-down effect of these strict fraud detection rules is an increase in false declines. It’s critical that merchants have solutions in place to prevent false declines and to implement a method of revenue recovery in the event of such errors.
Unfortunately, many merchants are oblivious to these false declines, and as a result do not understand the need to be proactive with changing how they detect and prevent fraud. Having a rules engine that detects fraud is important; however, these traditionally overly strict rules engines contributed to an estimated $8.6 billion in lost sales in 2016 due to false declines.
Because merchants are so focused on preventing fraud and chargebacks, they lose sight of the lost revenue that results from these high false decline numbers. To get ahead and stay ahead, savvy merchants should learn how to prevent false declines to maintain a consistent and valuable revenue stream.
False Declines Are Costly
Unfortunately, the reality of false declines is overshadowed by the cost and danger of fraud. There is no denying that fraud costs merchants; however, it’s important to keep in perspective how fraud compares to the cost of false declines. The same technology that contributed to an estimated $8.6 billion in false declines prevented an estimated $6.5 billion in fraud loss. In other words, the cost of false declines is approximately $2 billion more than that of fraud.
The cost of false declines is not a one-off; it is the cumulative impact of these false declines that can really hurt merchants.

  • Lost revenue. Both initial lost revenue and future losses, due to rejected customers not returning for subsequent purchases.
  • Long-term customer loss. Once incorrectly rejected, customers may not return for future purchases. There can be an extended impact with negative customer reviews and social media exposure.
  • Marketing costs. The cost to market to and connect with customers is high, this expense is lost when target customers are rejected due to invalid assumptions.

Typically, a false decline is triggered when the rules engine of the merchant’s payment solution identifies anomalies in customer behavior or sees a mismatch in identifying data. While this customer monitoring is key in detecting fraud, it’s important to understand that these rules engines cannot rationalize the reasons for the anomaly.
This speaks to the need for merchants to use a multi-layered approach to fraud detection that involves both technological and human interaction. Your customer service team is critical in detecting fraud and preventing false declines.
Customer Service to Prevent False Declines
Along with using a proven third-party solution to mitigate false declines, merchants can do a lot with their customer service team to prevent false declines. While merchants might balk at the perceived cost of using customer service team members to prevent false declines, this proactive communication goes a long way in saving lost sales and in building customer relationships.
Many of these common reasons for false declines can be alleviated with a proactive customer service team:

  • Unusually high order. Typically, unusually high-price orders are automatically rejected by rules engines. Instead, merchants should flag these orders and contact the customer to confirm it. There could be a valid reason for the large order; with a quick email exchange or phone call, the merchant can keep the sale and the revenue.
  • Expired credit card. Payment solutions are programmed to react to invalid credit card information, causing a false decline. Instead, when an expired credit card number is detected, trigger an email to the customer alerting them to the problem. Often, customers are not aware that they’re using an expired card.
  • Address mismatch. Orders are rejected when the provided address does not match that on file. Contact the customer to find out if they have moved, made an entry error (common with mobile devices), or may be an unknown victim of identity theft.

These examples highlight why it’s important for merchants to look beyond the obvious and take a closer look at what the data is showing them. While a strict rules engine is key in detecting fraud, it cannot interpret address mismatches or unusually high orders or an unexpected customer order. These examples can be indicators of friendly fraud – emphasizing why merchants must do more than the standard accepted practices to protect their revenue stream.
Review Proven Technologies
Just as there is not one ideal solution for detecting and preventing fraud, the same holds true for limiting your losses to false declines. It takes a customized approach with intelligent technology and a skilled customer service team to prevent the hidden cost of false declines from hurting your business.
Contact us to learn more about how our Decline Salvage solution can provide you the support you need to realize revenue recovery and prevent the trickle-down effects of false declines.
 
 
 
 


Chargebacks are not the enemy. Yes, chargebacks can cost merchants is loss of sales, drain on resources, and when excessive they can lead to problems with the issuing and acquiring banks. However, chargebacks really do work as a method of protection for both customers and merchants.
Evolved out of the Fair Credit Billing Act in 1974, chargebacks have become established as a form of protection for customers against fraudulent use of their credit cards. Because cardholders were skeptical and nervous about the inherent security of credit cards, a no-fault mechanism was created to provide credit card confidence.
The overarching purpose of the chargebacks process is to protect cardholders from fraud. However, savvy fraudsters have come to depend on the chargeback system as a means to steal from merchants. In addition, honest cardholders use the chargeback process to affect a refund on products or services, rather than contacting the merchant directly. And most often, customers don’t realize the impact that chargebacks have on the merchant.
It’s important for merchants to remember that merchant chargeback rights do exist.
Overlooked Merchant Chargeback Rights 
Unfortunately, the chargeback process is often framed in a cardholder versus the merchant scenario. This sets everyone up for tension and frustration. Most discussion and writing about chargeback reason codes, the representment process, and overall chargeback system is positioned as anti-merchant and pro-cardholder.
This is neither fair nor realistic, and it’s important for merchants to understand that they are not alone in the chargeback process. Merchants need to understand some key rules and conditions surrounding chargebacks, which inherently provide them with protection.

  • No cash-back transactions. Chargebacks cannot be filed as a cash-back remedy for a disputed transaction.
  • Late delivery. If the product arrives after the stated delivery date, the customer cannot immediately file a chargeback. The customer must first attempt to return the item to the merchant.
  • 15-day waiting period. When a customer returns an item, the issuer must wait 15 days before processing the chargeback. This 15-day waiting period gives the merchant time to process a refund and communicate with the customer.
  • Reason codes. Some reason codes clearly detail that the cardholder must make efforts to solve the problem with the merchant. In addition, the timelines in the reason codes have been established to give the merchant time to gather evidence for representment.
  • Purchase price only. The chargeback refund cannot include the costs of shipping, handling, or other surcharges.

Many merchants have a misunderstanding that issuers always agree with the cardholder. While this is easy to assume, since the cardholder is also the customer of the issuer, remember that the issuer also wants to keep the merchant as a customer.
The major credit card companies have systems in place to review purchases, customer history, and chargeback claims. For example, when Visa discovers an invalid chargeback, this claim is returned to the cardholder without the merchant or acquirer ever being notified. As well, most acquirers have systems in place to review and remove invalid chargebacks, without ever alerting the merchant.
Visa, MasterCard, American Express, and Discover have very clear merchant compliance rules and regulations. Not only do these rules protect the credit card brand, but they also give merchants protection in the event of a chargeback. The rules around refund and return policies, for example, are designed to protect merchants from unwarranted returns. Merchants should be familiar with the documentation provided to them by credit card companies and ensure they’re fully protected against chargebacks.
The Importance of Chargeback Representment
The right of chargeback representment is among the most important right that merchants possess. The right of representment allows merchants to dispute fraudulent chargebacks and prevent chargeback fraud.
There is a misconception that the chargeback representment process is designed to defeat the merchant. Often, this belief goes unquestioned because so many merchants do not understand the representment process, or they have been stung by a difficult representment experience.
When a merchant is prepared with the requisite evidence, a well-written dispute letter, and complies to the representment stipulations as outlined in the reason code, these efforts serve to assert a very promising opportunity for the merchant to win the dispute.
Yes, to win a chargeback representment case, the merchant must be prepared. However, this preparation should not be a barrier to disputing fraudulent chargebacks. The chargeback representment process is the best way for merchants to highlight fraudulent chargebacks—convincing acquirers and issuers of the problems in the system and to prove to criminals that merchants cannot be bullied by theft.
You do have rights. You can and must exercise your right of chargeback representment. Contact us to learn how we can help you with your chargeback representment case. Stand up and use the chargeback process to detect and prevent fraud, and, above all, protect your business.


Paying for groceries with a hover of the wrist over a point of sales terminal. Ordering and paying for coffee on a mobile app. These methods of paying are quickly becoming the standard.
Just as digital streaming hastened the demise of video rental stores, the same is happening to the overstuffed wallet packed with credit, debit, and store cards. Replaced by their digital cousins, consumers now have the ultimate convenience in buying and payments. And merchants have the added benefit of an always-on and ready-for-business sales model.
Of course, with this convenience economy comes the heightened risks of payment fraud. As merchants know, every new payment method brings with it inherent risks. The good news with mobile payments is that the very technology that makes it possible for customers to tap, swipe, or hover also provides a layer of security.
The key, however, is in not depending on this as the sole source of mobile payment fraud protection. Just as merchants want to grow their revenue, so do criminals. Hence, the constant drive for fraud detection improvements and the need for everyone involved in payments to commit to real action.
Mobile Payments Are Here to Stay
It’s not just groceries and coffee that have cracked the mobile payments scene. Now consumers expect to pay for everything digitally: when choosing a product or service, consumers want to pay for it with ease and convenience.
An entire infrastructure of businesses has been born out of this ubiquitous mobile payment environment. From online banking to budgeting apps that track mobile payments and to digital loyalty programs and mobile-only sales, mobile payments have become big business.
Recent research from The Statistics Portal, tracking the global mobile payment revenue, highlights this trend: $450 billion in sales in 2015 is projected to exceed $1 trillion in 2019.
Merchants across all industries are desperate to harness this sales and revenue potential. Mobile payments technology has these three advantages for merchants:

  • Larger customer base. With mobile POS and m-commerce options, merchants are able to sell to a wider, more diverse customer base. Providing customers multiple payment options reduces barriers to sales.
  • Happier customers. Customers want convenience. Giving customers control over how they pay for their purchases enhances their buying satisfaction.
  • Cost savings. The convenience of mobile payments allows merchants to reduce their infrastructure needs, in regard to the lower cost of operating an m-commerce store versus that of a brick-and-mortar store.

Merchants must appreciate that these advantages come in a very tight marketplace. Consumers expect seamless, fast, secure, and easy-to-use m-commerce and mobile POS experiences. The moment there is a problem with the app, entering a password, or a delay in authorization, the customer could be lost to a competitor.
Managing Mobile Payments Fraud Challenges
With any new change in payment methods, there is a risk for payment fraud. Mobile payments, even with intelligent technology allowing for instant authentication and authorization, are not immune to fraud risk.
By identifying key fraud challenges, merchants can implement the solutions and technology that uniquely work for them. Relying on an off-the-shelf approach to mobile payment fraud detection and prevention may not be the right approach.

  • Minimal transaction history. Not having a customer transaction history can make it challenging to track abnormal purchasing behavior. Using device authentication and fingerprinting technology can help verify the customer identity.
  • User error. Smartphones have small keyboards, making it easy for customers to incorrectly enter passwords or credit card data. Take advantage of technologies that allow secure data storage paired with geolocation security to enhance customer identification.
  • Slow mobile site loading. Some mobile sites and apps are slow to load, due to the fraud detection technologies being used. Consider using a multi-factor authentication to work around this latency.

Merchants cannot be expected to become experts in identifying mobile payment fraud risk and then determining the right fraud prevention solutions. For this, we urge you to rely on the experts at Verifi.
We specialize in payments solutions that work for you to detect and prevent fraud. Our Global Payment Gateway provides robust and customizable options for merchants who want comprehensive payment fraud protection. Contact us to learn how our “Super Gateway” can protect you from payment fraud, while simultaneously allowing you to take advantage of the booming mobile payments environment.