Fraud Mitigation

When legitimate e-commerce prospers everyday, there is still the growing threat of illegitimate business. Unfortunately, there is no way we can stop these people from attaining and using others information. However, we can prevent our vendors from associating with illegitimate buyers. A business that sells tangible goods will experience less fraud than a business that sells intangible goods. It is quite easy to generate great loss by sending a service to a free and untraceable email address opposed to sending a service to a physical address. Fraud will occur in every type of business, some more than others. We find that the most sought after services that accumulate the most losses are hosting, e-books, and templates.

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What are the Bank Assisted Dispute (Chargeback) fees?

Starting on May 1, 2006, 2CO will not convey, and the vendor has no liability for, extra charges if a dispute reason is “fraud.” However, vendors will be charged a fee of $50 if 2CO rejects an order, and you, the vendor, are working separately with that customer to fulfill it over and above 2CO objections. Additionally, if there is a service-related charge, for example if a product is not delivered, or is not ‘as advertised,’ there will be new increases in fees.

What is a Bank Assisted Dispute (Chargeback)?

A chargeback dispute is a forced refund from a customer’s credit card company. It occurs when a cardholder decides to formally dispute a charge on his/her credit card bill, often because someone else fraudulently used that card number before the abuse had been discovered or reported. Chargeback disputes occur on less than 1% of all 2CheckOut transactions.

According to credit card association rules, Internet merchants must accept credit card fraud as part of the normal risk of doing business on the Internet.

The amount of credit card fraud you experience will vary according to the type of products you sell. Products that appeal to children, teenagers, and unmarried men will experience a higher degree of credit card fraud. Products that are purchased primarily by professionals, women, and families will experience a lower amount of fraud.

How can I help to reduce the number of customer disputes?

If you are shipping expensive items, use a package service that provides proof of delivery. There will always be some customers out there who falsely claim that a package was not received (and occasionally there will be packages that truly are lost or stolen). Since you bear the responsibility for those losses, you should take care not to put large amounts of money at risk.

-Hint: The US Post Office provides insurance on packages for a small fee that has an effect of making the receiver of the package provide a signature to indicate that the parcel arrived undamaged. Signature confirmation is also available from other national and global carriers.

*Be accessible! Respond to 2CO requests for information promptly. Check your open issues at least once per day. Provide links to 2CO’s ticket system, open issue interface and telephone number as part of your ‘Contact Us’ page.

*Be sure that customers are completely familiar with your offering before they order. Thoroughly describe your offering, show photos, and disclose any important limitations. Ensuring the customer’s expectations match what arrives in the mail will save you and the customer time, money and aggravation.

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