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Another method of fraud


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There need to be some changes made in the credit card system so merchants quit being the ones punished for the fraudulent practices of the cardholders.

 

 

Actually changes have been made. Visa and MasterCard rolled out the Verifed by Visa and MasterCard SecureCode programs to provide merchants with guaranteed payments.

 

Participation in the programs allows merchants to begin to accept international transactions without the fear of fraud. These global programs provide merchants with guaranteed payments on authenticated transactions which eliminate the "I didn't make that purchase" types of charge backs. Once a transaction is authenticated during the checkout process, the liability for the transaction is shifted from the merchant account to the Card Issuer. This means no more charge back fees, no more loss of goods..etc.

 

Visa Program information : http://usa.visa.com/business/accepting_vis...gement/vbv.html

 

JCB has also launched a program (JCB J/Secure) based on the same guidelines, and provides the same types of benefits to merchants.

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Actually changes have been made. Visa and MasterCard rolled out the Verifed by Visa and MasterCard SecureCode programs to provide merchants with guaranteed payments.

 

Participation in the programs allows merchants to begin to accept international transactions without the fear of fraud.  These global programs provide merchants with guaranteed payments on authenticated transactions which eliminate the "I didn't make that purchase" types of charge backs. Once a transaction is authenticated during the checkout process, the liability for the transaction is shifted from the merchant account to the Card Issuer. This means no more charge back fees, no more loss of goods..etc.

 

Visa Program information : http://usa.visa.com/business/accepting_vis...gement/vbv.html

 

JCB has also launched a program (JCB J/Secure) based on the same guidelines, and provides the same types of benefits to merchants.

 

I will definitely look into this program.. I have read some on it in the last couple of weeks.  Thanks for the heads up.  :)

ElLeonBlanco

 

"The man of genius makes no mistakes. His errors are volitional and are the portals of discovery." James Joyce (1882?1941)

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I would think just adding the extra $2 automatically as a Handling fee and using that money to pay for the tracking would do the trick..

 

 

Fussmussy agrees an additional handling fee should solve it. But if you figure the tracking, or signiture required upon delivery into you operating expenses, then add it onto your product as that. You are entitled to add operating expenses onto the price of the product. It certainly would be worth the aggravation of all this. :blush:

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Aren't you the lucky one! Ship from outside the USA to the USA. Do you know what that means??? Want a chargeback... ship something to the USA. If you are a foreign merchant you have absolutley NO recourse with the credit card companies. One client I have has an average order over $250.00 and he has a very difficult time because all JOE TRAILERPARK has to do is order some very expensive items... wait for them to arrive... and then call the credit card company and deny he ever ordered it. When you contact the credit card agency "ie. WORLDPAY" they ask for a pile of documents to prove it. You send copies of the order, the transaction, and even where JOE TRAILERPARK signed for the order at his billing address and they still find in favor of the consumer.

You are out not only your product and shipping but it raises your chargeback percentage and with most of them if you go over 1% in chargebacks they suspend your account. So you end up a total loser because now your money from other orders in thier accounts is tied up for at least 6 months. If you get it back then.

There need to be some changes made in the credit card system so merchants quit being the ones punished for the fraudulent practices of the cardholders.

 

 

Sounds like you need to make better use of fraud prevention tools provided. What are the AVS scores provided by Worldpay on your transactions. If any of them are a fail then you should deny the transaction. But then Worldpay isn't an American card processing company. They are owned by the Royal Bank of Scotland. Having used them with one site that sells thousands per day, I have to say they are one of the worst processors for fraud protection. Currently we are looking forward to implementing a new processor that gives better anti-fraud tools and more control over what we process and don't process. However, I would say most of our fraud comes from Southeast Asia, Africa and the Middle East. We have found another indicator of fraud is free email addresses. Since the product we sell requires a valid domain name, we have banned purchases from free email addresses as well.

 

6 months ago we did have a lot of problems with fraud. Mostly because we accepted any sale. Since our product is distributed electronically, we have never won a chargeback. It was only when the card companies threatened a $50,000 fine for excessive chargebacks did the people above me listen to the problem at hand and steps were taken to fix it. Since that time, I haven't fielded a single phone call for an unauthorized charge.

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Fussmussy agrees an additional handling fee should solve it. But if you figure the tracking, or signiture required upon delivery into you operating expenses, then add it onto your product as that.  You are entitled to add  operating expenses onto the price of the product. It certainly would be worth the aggravation of all this. :blush:

 

 

For my private retail business (different from the one mentioned in the post above), we add Delivery Confirmation on every order and only charge a $5.95 shipping charge for any order under $75.00. All orders over $75.00 get free shipping and we also include insurance on those orders at no cost to the consumer. Eats a little into profits but not enough to really hurt.

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Did you know that if you ship your products priority mail and use www.endicia.com as your mailer, your delivery confirmation costs are zero? Free delivery confirmation with Priority mail. It helps eliminate this problem, allows you to use USPS Tyvek bags and/or boxes and adds a specific level of professionalism.

 

Just my 2c.

 

D

 

Some of you may have experienced this, but lately I have been getting hit with a different type of fraudulent orders.

 

What the customer does is places their order (legally) with USPS as selected shipping method.  After about two weeks after order status of 'shipped' the customer does a charge back, or claim through PayPal claiming they never received their merchandise.

 

As you may know, USPS does not give tracking numbers unless you add the additional service, Delivery Confirmation, so there is no way to prove that they have really received their order to the credit card companies, or PayPal.

 

I went out of my way to offer this service to my customers due to some of their lower rates and simply charge an additional $1.00 for taking the order to the post office.  I totally overlooked the whole tracking number thing because it never crossed my mind someone would do something like this. 

 

What is even worse, alot of people that do this work in groups, so once they find out your site has the volnerability, they whole group of people will know.

 

So in the end I decided to just eliminate USPS as a shipping methond and take my losses. 

 

Just a forewarning to anyone that doesn't require Delivery Confirmation.

 

-Dave

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Why don't you ask your customer to confirm shipping option, for example on our web page we have some options like:

a.) One cable: 1 meter or 2 meters (to USA or International) can ship via Canada Post (insurance not included, ships on customer responsibility).

b.) To USA via Canada Post Expedited Ground (insured) - expected arrival about 7-9 business days (to USA).

c.) In Canada ONLY Expedited (insured) about 5-7 bus.days

 

and make sure the customer selects the shipping opiton during the check-out.

 

#Joseph

#Joseph

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  • 2 months later...

I (knock on wood) have only had a few actual fraud attempts, the biggest problem that I have are the 1% of folks who turn in to absolute ****heads if there is a minor glitch or delay.

 

Something to keep in mind with USPS "Delivery Confirmation" is that the package is only required to be scanned upon *delivery*. This may not sound like a big deal, but it seems like quite a few people use this as a "tracking" method. I ran into some major headaches with this after moving & switching post offices. Post office #1 scanned *everything* (and I think that the big processing facility was scanning them too) & my customers were able to use the delivery confirmation # as proof that the item is enroute - it also gave me a leg to stand on for the non-receipt of goods charge-backs. Post Office #2 isn't scanning anything & we found it out the hard way over Christmas - not fun at all! It never fails that the uninsured packages are the ones that have problems.

 

What have I learned? Insurance is worth it to cover my hiney - it is part of my S&H. It's cheaper and much easier to deal with than a chargeback (I use Stamps.com for USPS packages, so I don't have to deal with the US government for insurance claims). I still use delivery confirmation, but now I ask the receiving post office to scan the package into the system rather than assume that they will.

 

Annie

It's not a learning curve, it's a cliff!

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Fraud and USPS...

 

I have had an online store for approximately 5 years, have generated well over 20,000 orders and in that time have had only 5 charge backs totaling less than $400 dollars.

 

All of the charge backs occurred on orders shipped via USPS with Delivery Confirmation. A 'Delivery Confirmation' merely confirms that the package was delivered somewhere, in the Credit Card Companies perspective the confirmation provides no proof that the customer received it.

 

However if you require a 'Signature Confirmation' the package is actually handed to the customer after they sign for the package and the Credit Card Company accept this as the receipt signature. In short if you have a signature of receipt the customer has little to no ground to claim non-receipt.

In addition that works in reverse if the customer claims to have returned the item and is due credit if they have no signature to substanciate receipt of the return.

 

With that said, it doesn't matter whether it's UPS, USPS or FedEx...I require 'Signatures' on each and every shipment.

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  • 1 year later...
  • 1 month later...

From the very start of my store I sent everything USPS with a delivery confirmation. This only costs about .55c to add onto the order and you can track the number online. I email the customer and tell them the tracking number and date of delivery. When I see that the package was delivered, I send another email telling the person that they should have received the package according to the post office. Haven't had any issues when I've shipped this way.

 

Hope this helps

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  • 2 years later...
Sorry to hear about your loss.

 

What you could do to cut down the fraud is insist on a landline number and not a mobile/cell phone. You can call that number and ask to speak to the person that made the order. Ask some simple questions about the payment card used ie. last 3 digits on the back, no. products ordered etc....

 

Just be aware of any hesitation in the 'customers' response. At least you will not only have a record of that conversation and it will be alot harder for the fraudster to claim a chargeback but you could also check the number with the phone company.

 

Hope this helps!

 

hey guys.. how can we do this?? im in uk.. and we only ship to uk

we do have a telephone field as compulsory.. but people use their mobile numbers to register.. how can we restrict it to landline only??? please help me out here?

thanks alot.

i'll be waiting for reply

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You could add validation when the tel no is entered that it must start 01 or 02

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You could add validation when the tel no is entered that it must start 01 or 02

 

Hi,

hey dude.. how can we do that?? im not gud with coding.. so if u can guide me how can we do sumthing like this??

thanks

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