Merchants need customers. This is a simple fact of business. The challenge for merchants is to attract and then retain these customers. Building loyalty and encouraging customers to trust the brand are key in customer retention.
Long-term customer relationships often hinge on the customer’s first contact with the merchant. This often occurs when the customer contacts the customer service team with a problem or question. Now the pressure is on to find a solution and keep the customer satisfied. Any missteps during this first interaction can result in a lost sale, chargeback, friendly fraud, negative social media review, and a lost customer.
Merchants must not overlook the value of the customer service team. These employees are on the front lines of customer interaction and often deal with unhappy and even angry people. Solving customer problems, responding to questions, and going above and beyond can be the difference between a loyal customer and a lost one.
But what does this have to do with chargebacks and chargeback protection? Simply put, the more a customer service team provides outstanding service helping to resolve problems, the more likely they can prevent a chargeback.
Don’t Overlook Customer Service
To provide good customer service and prevent chargebacks, merchants must be accessible. Customers seek the easiest way to resolve their problem, and, too often, their first step is to contact their card-issuing bank. However, when merchants deal directly with the customer, they can frequently solve the problem and avoid a chargeback.
The problem is that most merchants lack the solutions 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 train their customer service team to provide helpful resolution strategies.

  • Be available. An unhappy customer might not have the patience to search for the customer service email address or phone number. Include a customer service email link, phone number, or feature a live chat option on every web page throughout the payment and checkout process.
  • Be flexible. There are always exceptions to the rule, so consider empowering your customer service team 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 decide on how best to solve the problem.
  • Be proactive. Respond to customer queries quickly and efficiently. Remember, the customer is unhappy and the longer she has to wait for a response, the more likely she is to file a chargeback.

Clear Lines of Communication
Your customers chose you and now you need to work hard to cultivate their loyalty. Don’t assume that a well-designed website, mobile app, or excellent product is all you need to retain 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 analyze how you interact with your customers. Contact us today for advice from Verifi experts that will help put the solutions in place to prevent chargebacks and keep your customers loyal.


It has never been a more exciting or challenging time to be a card not present (CNP) merchant. The barriers to entry into e-commerce, m-commerce, and omnichannel sales networks have largely been erased.
Of course, as with all good things in sales and payments, there are caveats. The digital sales boom also presents many unique fraud risks. Traditional approaches to fighting fraud that work in the retail sales model no longer apply to digital sales.
Too many CNP merchants have not updated their fraud detection and prevention methods to address  cybercrime. The good news is that the popularity of omnichannel sales has forced the industry to gain greater understanding of how fraudsters work, how CNP merchants are at risk, and the best strategies and tools to prevent fraud.
The Challenges of Digital Goods Sales
The immediacy of digital goods is a major consumer draw. They see something they want, click to buy, and in an instant can place their order. What could be better for the customer or the merchant?
Unfortunately, this instant gratification sales model sets CNP merchants up for unique fraud risks that don’t come with traditional brick and mortar transactions. CNP merchants specializing in digital good sales must deploy the most current and effective fraud detection and prevention solutions to manage their fraud risk.
Having a firm grasp of the challenges facing CNP merchants face is a the first step:

  • Instant delivery. With instant delivery, the merchant has little or no time to review the order, check for automated fraud, or conduct a manual review. The purchase and authorization happen in real-time, forcing merchants to make split-second automated approvals or rejections.
  • False declines. Because of the limited time available to approve a purchase, many merchants rely on rigid rules to approve or decline an order. With fear of fraud on the rise, this has resulted in a startling high percentage of false declines causing frustrated customers, lost revenue, and negative brand perception.
  • No data. No phone number, no delivery address, no prior purchase history means no data available to review and verify the purchase. This lack of data sets merchants up for large-scale fraud from savvy criminals, who know they can hide behind multiple fake email addresses and proxy servers.
  • Customer demands. Customers want fast, easy, and simple purchase experiences. Entering passwords, waiting for a confirmation email, or responding to an SMS verification message frustrates this growing population of impatient consumers. The more required of these customers, the greater the risk of abandoned shopping carts or chargebacks.

In knowing the challenges of digital goods sales, CNP merchants can take the proper steps to protect themselves and their honest customers from fraud.
Best Practices to Detect and Prevent Digital Goods Fraud
For most CNP merchants, the right solutions and best practices to  prevent fraud comes down to balance. Merchants who are overly rigid risk losing sales and driving customers away, while merchants who are too lax with review policies and data monitoring are vulnerable to fraudsters.
By mixing and matching fraud prevention tools, CNP merchants can implement the ideal solution for their specific business. Here are some guidelines:

  • The right tool for your sales model. Choose fraud detection solutions that are designed to match the savviness of cybercriminals. Identify solutions that have built-in flexibility along with intelligence to mitigate false declines.
  • Take advantage of data. One of the major challenges of digital goods sales is the lack of data. But with the right solution, even the smallest piece of information such as an IP address or an open Wi-Fi network can be enough to review, confirm, or reject a purchase.
  • Act fast. Digital goods sales fraud is not going away. Put the same effort into your CNP fraud prevention strategy that you put into building your mobile app and creating the omnichannel experience.

Be Proactive Against Digital Good Sales Fraud
The explosive growth of digital goods sales has placed unprecedented demands on merchants to update their fraud detection solutions quickly to combat cybercrime.
Unfortunately, too many merchants can’t keep up with the most current information. Contact us to learn how Verifi solutions can keep sales flowing and prevent digital goods fraud.


Fraud comes in many shapes and disguises. Over time it slowly but surely takes its toll on a merchant. When he discovers he has been victimized, the merchant is left with a long list of questions about how and why it happened. What’s confounding is that fraud is not simple and straight-forward – when done expertly it is subtle, savvy, and debilitating.

Clean fraud is so successful because it seems to sneak up on merchants, cloaked in any number of forms including friendly fraud, first-party fraud, and fraud by false claim. What makes clean fraud different is the way thieves use real customer data and identities to commit the crime. Most merchants are aware of the threats that come with stolen identities, fake credit cards, and security breaches, responding with multi-layered solutions designed specifically to stop this kind of fraud.

What makes clean fraud so difficult to detect is that it uses real data to commit fraud. Friendly fraud, first-party fraud, and fraud by false claim do not hide behind fake identities or stolen data. The success of clean fraud relies on the rules systems and checks and balances inherent in fraud detection solutions to detect fake or questionable data. Real data slides through, paving the way for the criminal activity. Yes, it is disconcerting – but the good news is that just like everything in payments and fraud, knowledge is power.

What Is Friendly Fraud?
One of the biggest challenges for merchants is understanding and preventing friendly fraud. The fact is that there is nothing friendly about it, because the fraudster makes claims that appear believable and honest but often are not. The existing merchant-cardholder relationship can make friendly fraud hard to identify and even harder to defend against in a chargeback representment case.

There are five key types of friendly fraud that must be on a merchant’s radar:

  • Item wasn’t delivered. The cardholder claims the item didn’t arrive when in fact it was received.
  • Item purchased doesn’t match the online description. The cardholder claims the item on the website is different than the description and wants a refund.
  • Item returned but the refund wasn’t processed. The cardholder attempts to receive two refunds for one returned item.
  • Cancelled the order but still received the item. The cardholder claims the order was cancelled but received the item, hoping they can keep the merchandise and receive a refund.
  • Doesn’t remember making the purchase. The cardholder claims they didn’t make the purchase and their credit card must have been violated.

Preventing friendly fraud requires an expert customer service team, a payments solution designed to provide key confirmation and authorization messages, and best business practices in place including tracking numbers, clear online descriptions, and fully detailed refund/return policies.

What Is First-Party Fraud?
First-party fraud is one of the most prevalent but overlooked types of fraud plaguing merchants and issuers.

First-party fraud happens when the criminal applies for and uses a credit card with no intention to pay for the purchases. Because real identities and easy to validate information (addresses, phones numbers, email address, credit history) are used to verify the legitimacy of the credit card applicant, it’s difficult to distinguish a new, legitimate customer from a potential first-party fraud risk.

The primary victim of first-party fraud is the issuer, but the merchant doesn’t escape unscathed. The trickle-down effects of the credit loss include higher issuer fees, tighter and more restrictive credit card monitoring programs, and great scrutiny of merchant reliability.

What Is Fraud by False Claim?
Similar to friendly fraud, the cardholder takes advantage of the chargeback process to mask their fraud claim. Typically, fraud by false claim occurs when the cardholder stops a recurring purchase, claims they don’t remember the purchase, or claims buyer’s remorse.

By taking advantage of the inherent problems in the chargeback process, criminals understand that most merchants and issuers don’t have the resources or expertise to identify fraud by false claim easily. Because the chargeback reason is wholly believable, fraudsters can sneak through undetected. Often criminals target merchants who have unclear refund/return policies, out-of-date website information, or lack a strong customer service team.

How to Detect and Prevent Clean Fraud
There are no shortcuts or quick-fix solutions that will prevent clean fraud. It requires a multi-layered fraud prevention solution that uses best-in-class technology, including data analysis, artificial intelligence, IP analysis, biometrics, and more. It’s not enough to know that clean fraud is happening. It takes knowing how clean fraud happens, why it happens, and in anticipating the next incarnation of clean fraud – this is the only way to detect and prevent clean fraud.

You can contact us to learn how our payment solutions, specifically Order Insight and CDRN which can keep you on the cutting-edge of fraud prevention and detection.


The Payments Future
Remember when the ATM was innovative? Insert a bank card, tap some keys, and get money instantly. Gone were the days of standing in a long line at the bank and presenting a withdrawal slip. Access your money when and where you wanted it.
Flash forward thirty years and payments can happen with the hover of a winter glove or the scan of a lapel pin or sticker. These payment innovations will debut at the 2018 Winter Olympics in PyeongChang, South Korea. Visa partnered with South Korean retailer Lotte to design and create the latest in payments wearables. The gloves, lapel pins, and stickers feature a duel interface chip and contactless antenna enabling instant authorization of payment.
What’s next for the future of payments? How far can innovation and technology drive the way customers pay for purchases?
Accenture’s 2017 North America Consumer Payments Pulse Survey of 1,500 consumers in the United States and Canada reveals that consumers are ready for payments innovation.

  • 68% of Generation Z consumers, those born between the mid-1990s and the early 2000s, are interested in person-to-person payments – more than any other group.
  • 61% of consumers welcome open access to their finances to view checking account or credit card balances when paying with any mobile app.
  • 64% of consumers plan to use a mobile wallet in 2020, up from current 46% – a 39% rise in the user base.

The general consensus is that the evolution from paper bank withdrawal slip to ATM card to in-store payment terminals to payments wearables is a good thing. The largest drivers in the payments evolution are consumers’ willingness to embrace the technology, and in the payments infrastructure ability of payment processors to deliver a secure solution.
The Power of Generation Z
Gen Z comprises 25% of the U.S. population and promise to be real game-changers in the payments industry.
This generation has never lived without the Internet, Google, or social media. They are highly digital-literate and early adopters of the latest and greatest technologies. For merchants who sell to this demographic, being responsive to demands for mobile apps, digital wallets, and the blurred lines between social media and payments is critical.
Consider this revelation from the Accenture 2017 North America Consumer Payments Pulse Survey: 80% of Gen Z would give up their television for a day – and 28% would give up friends or money just to keep their mobile phone.
Shared Data Analysis
Today’s consumers are not naïve, they know that their data is collected, analyzed, and used to tailor messaging to their specific buying habits. While there are underlying trust issues, most consumers accept that this vast amount of data enhances their shopping experience.
For merchants invested in omnichannel, m-commerce, and e-commerce, this points to maintaining a focus on delivering the ideal customer experience. Customers know the data is there – and they expect to receive a personalized and customized browsing, shopping, and payment experience. Merchants must also know how the customer wants to pay from their device of choice and make available account credentials across all devices.
Mobile Wallet Push
There has been a lot of buzz about mobile wallets and how the industry will adopt this emerging technology. By examining what is happening in China, we can gain insight into what will soon happen internationally.
China has consistently been ahead of the curve with technology and communication adoption rates, making it a truly mobile-centric nation. Alipay, a major Chinese payments leader, has developed mobile solutions that support their estimated 520 million active customers.
By partnering with major payment providers, including First Data, Verifone, Payworks, and Stripe, Alipay enables consumers to use mobile wallet technology wherever they are. Alipay supports 27 currencies in 30 countries, driving how Chinese consumers, and soon North Americans, will pay for purchases.
Staying Afloat in the Evolving Payments Future
Admittedly, we have only scratched the surface of what is happening in the world of payments. This is an exciting time to be involved in how consumers, merchants, and banks support and drive e-commerce. The entire transaction life-cycle is tied to payments – security, fraud prevention, data analysis, marketing, growth, and revenue.
This payments ecosystem requires merchants and their banks to be flexible and agile when it comes to doing business. The fear of missing out is real– wait too long to integrate mobile wallet technology or to deliver a personalized shopping experience and customers will leave.
Merchants need to understand how to prepare for the evolution of payments to meet customer needs. Verifi has a deep understanding of trends in the payments industry and can be a source for planning future strategies.  Contact us to learn how you can prepare for consumer demands, bank expectations, and the ever-present fraud risks lingering in the background of this exciting payments universe.


The cold hard truth is that chargebacks can be the undoing for many merchants. Either due to inexperience with best practices that result in unnecessary chargebacks, attacks by professional fraudsters, or simply out-of-date chargeback management principles – chargebacks happen at an alarming rate.
All too often, merchants get caught up in the big picture, focusing on omnichannel security or m-commerce fraud prevention, or constantly testing the latest in fraud prevention technology. While these measures are vitally important, merchants must also take the necessary steps to prevent chargebacks.
The chargeback rebuttal letter is often left to the last minute or worse, completely forgotten. Merchants have very few lines of defense once a chargeback has been filed and the onus is on them to contest the dispute as an important line of defense against fraudulent chargebacks. Do not underestimate the value of a well-written and researched chargeback rebuttal letter.
The Chargeback Rebuttal Letter Matters
It’s important to begin by recognizing a few key facts about the complicated chargeback system:

  • The chargeback process is deeply flawed
  • Most cardholders bypass the merchant and contact their bank first
  • Banks have limited information at to validate the sale and to respond accordingly

This flawed chargeback management system frustrates even the most proactive merchants and leaves the chargeback rebuttal letter as one of the best ways to defend and win a chargeback dispute.
The Keys to A Successful Chargeback Letter
A successful chargeback rebuttal letter comes down to having the right resources in place that allow merchants easy access to the information and facts about the disputed charge.
Time is not on the side of the merchant when it comes to building and presenting the response. Using a solution that monitors purchase data, tracks payment and delivery details, and allows direct insight into order history gives merchants the timely and detailed data they need to write the chargeback rebuttal letter.
The ability to win a chargeback dispute comes down to the compelling evidence that supports how and why the chargeback is unwarranted. Compelling evidence can include:

  • Copy of the refund/return policy
  • Proof of cardholder approval for the purchase
  • Confirmation emails/transcripts with the cardholder to prove the purchase
  • A clear copy of the sales receipt, invoice or order form
  • Delivery details, including the tracking number, signature upon receipt, and delivery time/location
  • Proof that the customer lives or works at the delivery address
  • Photos, descriptions, etc. that can prove the purchase matches the description provided
  • Indications that previous transactions from the same IP address, email address, physical address or telephone number were undisputed
  • Evidence of the customer’s IP address and the download time and date (if a digital service)
  • Proof that someone related to the customer could have made the purchase with the customer’s card

To be effective, the compelling evidence must leave no doubt that the cardholder authorized the purchase and received delivery. The only way to do this is to have the appropriate payment solutions in place to address everything that results in a chargeback.
Chargeback Management Success
Realizing chargeback management success is quite possible. However, this success requires a thorough understanding of your sales, payment, and authorization processes.
It takes a cohesive and connected approach to payments processing. Knowing you have the best solutions for your unique process will enable you to realize chargeback management success.
Learn about Verifi’s payment solutions, including Order Insight and our Chargeback Revenue Recovery Service. Be sure to visit our Resource Center and Knowledge Base to arm yourself with the best information possible in the defense against chargeback fraud and losses.


There is not a merchant, cardholder, issuer, or acquirer who wants to hear the words data breach. The impacts can be devastating, potentially affecting everybody in the transaction life-cycle, including innocent cardholders.
Our intent is not to frighten merchants, rather it is a wake-up call to data breach risk. If merchants ignore the risk, it can and will happen.
Merchants can and must be proactive in the face of data breach attacks. The best defense against fraud comes from being proactive, aware, and prepared.
How a Data Breach Happens
Professional hackers and data breach experts excel at their jobs. Yes, jobs – these criminals execute data breaches and fraud for a living. Because of this professional approach to fraud and hacks, merchants and cardholders cannot become complacent or live in hope they won’t fall victim.
To be successful, a professional hacker does the following:

  • Research. Savvy hackers look for merchants with security weaknesses. These vulnerabilities can include an open and free WiFi network, disgruntled employees, outdated security systems, relaxed attitudes to storing customer data, and any other holes in communication and security.
  • Invade. It is imperative for cybercriminals to move fast and efficiently. These hackers want to break in and move around freely without being noticed. This requires advanced technology, inventiveness, and confidence.
  • Attack. There are two primary attack methods: network and social. In a network attack, the criminal uses holes or weaknesses in the company’s IT infrastructure or network to access confidential data. A social attack takes advantage of the complacency of employees, tricking them into giving up secure information or access to databases. This can happen with a believable looking email that asks the employee to confirm their credentials or open an attachment that has embedded malware.
  • Steal. Once the criminal has successfully invaded and attacked the company, he completes his task by committing the theft.

Typically, fraudsters target companies that have access to confidential data. Common targets are healthcare organizations, online shopping merchants, social websites such as dating sites, government organizations, and credit providers. These types of organizations have access to personal data including credit card details, complete addresses, social security numbers, healthcare data, bank account information, and email addresses.
With this data, hackers have what they need to sell the data, apply for credit cards, go on online shopping sprees, steal directly from bank accounts, or more.
Costs of a Data Breach
One of the principal reasons for complacency towards data breach attacks is not understanding their true cost. Most people are made aware when hackers compromise a large organization and steal personal data. But unless it is a very high profile case, that’s where the story ends. There is little to no follow-up on what this data breach means for the organization – beyond the negative publicity.
When considering payments security and fraud prevention, merchants should be aware of the hard and soft costs of a data breach:

  • Loss of merchandise. This is the direct result of data breach fraud when thieves use stolen credit cards to “purchase” merchandise with fraudulent transactions. This merchandise is never recovered.
  • Customer communication. Merchants and other organizations must be proactive in communicating with their customers about a data breach. There can be significant resource and time demands communicating the breach to victimized and at-risk customers.
  • Forensic review. Merchants are bound by regulations to undergo a forensic examination of their payment system after a data breach. The costs of this forensic review can range from $20,000 to $50,000.
  • Issuer and acquirer fees. Merchants impacted by a data breach absorb chargebacks and their associated costs. This translates into higher issuer and acquirer fees and for some merchants can lead to placement in chargeback monitoring programs.
  • Brand reputation. Recovering from a data breach is not easy, because the negative publicity can cause long-term brand damage. Merchants must be actively engage in communicating with their customers, investors, and other third-parties to mitigate the impact of a breach.

Be Proactive Against a Data Breach
One positive result that has emerged from the recent high-profile data breach attacks is the increased awareness of tried-and-true steps merchants can take to protect themselves from a similar attack. At the same time, cybercriminals constantly strive to stay one step ahead of preventative measures, so merchants must remain current with the latest payment solutions technology.
Merchants who are fully committed to payment solutions security and cardholder protection can address potential weaknesses and protect themselves and their customers from attacks.

  • Multi-layered fraud prevention. Choose payment solutions that employ layered fraud detection technologies to detect and stop criminals.
  • Be smart about data. Don’t keep any customer data on file, in the cloud, in a database, or on a USB drive.
  • Use encrypted communications. Work with industry experts to configure an encrypted communications network and payments solution.
  • Stay alert. Conduct reviews of your payment solutions, educate your employees on the risks and potential for data breach attacks, and know the signs of fraudulent activity.

Data breach attacks happen, but with the right partners they can be prevented. Contact us to learn more about how Verifi experts can help keep your network and payments data safe and secure.


Shopping has evolved. Who could have predicted that social media would become the new shopping mall? Now consumers open their Instagram, Twitter, and Facebook mobile apps and tap ‘buy.’ Merchants benefit from a new way to capture consumer interest and to generate sales.
However, this m-commerce shift comes with some risks. Payment and security solutions must keep pace with cybercriminals or fraud and credit card disputes will significantly increase.
Just as in the early days of e-commerce, m-commerce demands that merchants know their consumers. Demographics, psychographics, shopping trends, and other data analyses are critical to build an m-commerce solution that appeals to consumers. Today’s m-commerce consumer has no patience to struggle through a learning curve – they want instant gratification and hassle-free transactions.
M-commerce is expected to become a $626 billion industry in 2018. According to Goldman Sachs, m-commerce will dominate consumer sales. A growing number of people will make purchases with their smartphones and tablets. The convenience and freedom to shop anywhere, anytime, is the basis for Goldman Sachs’ estimate that 535 million worldwide consumers will adopt m-commerce in 2018.
Merchants who hope to benefit from m-commerce growth must answer two critical questions. First, how can they harness the m-commerce marketplace? Next, what is happening in the m-commerce marketplace? Read on for the answers.
Maximizing M-Commerce Potential
When they make a purchase, consumers have no tolerance for delays, cart updates, or slow-downs in authorization. When consumers see the Add to Cart and Checkout buttons, they expect action. The longer the delays between adding items to the cart and final purchase authorization, the greater the chance for cart abandonment.
The ability to harness consumer impulse buying habits is the big challenge for m-commerce merchants. Standing out from competitors with an app that is easy-to-use, fast, and secure is vital. Along with a Buy button, consider adding an Instant Buy button, similar to Amazon’s website model. Encourage consumers to act immediately and make it easy to do so.
The more personalized the messages and content consumers see when they open their m-commerce and social media apps – the better. Consumers are savvy and expect to see products and services tailored to their interests and browsing habits. This is the new m-commerce marketing – limit the choice and get personal with specific products. Personalization makes consumers feel that the merchant cares and pays attention, much like the personal touch they experienced in brick-and-mortar stores.
What used to be considered invasive and pushy is no longer the case in the 2018 m-commerce paradigm. Consumers want to buy on their terms so give them what they want whenever they want and make buying effortless.
M-Commerce Technology Is Not Standing Still
The obvious next step to benefit from the m-commerce boom is to employ the right technologies at the right time. While technology constantly shifts, there are some tools merchants should take advantage of now:

  • Artificial Intelligence (AI). AI enables merchants to get personal by matching consumer preferences to specific product recommendations.
  • Data analysis. Use the analysis to create customized mobile app experiences. With information such as location, personal preferences, and browsing history, deliver a truly personalized mobile app experience.
  • Omnichannel. Consumers want a complete omnichannel shopping experience. Make sure they can decide how, when, and where they receive their purchases.
  • Chatbots. Consumers want useful information. Responsive and effective chatbots or smartbots can be a big differentiator.
  • Augmented Reality (AR). Items like furniture and clothing often need to be seen before buying. With AR, consumers can see in real-time how the new couch looks in their home or ensure the pants will fit correctly.

There is no silver bullet to achieve m-commerce success. It requires being current with the latest consumer trends, changes in technology, and fraud threats. The underlying factor with all of these is data. The ability to analyze data and take action gives you the insight you need to fix and improve your m-commerce experience.
Whether it is creating a more tailored and simple mobile app or giving customers instant gratification or quickly identifying fraud threats, it all comes down to data. Take advantage of the data your payment solution collects to harness the m-commerce marketplace. Your current and future profitability depends on it.


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.