How to Avoid Dishonest and Fraudulent Customer Credit Card Chargebacks

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Credit card companies are wonderful at protecting consumers against credit card fraud by taking care of disputes whether they are incorrect amounts, a result of credit card fraud or stolen credit cards, as well as merchant errors. These refunds are called chargebacks. Chargebacks are not only disappointing to the merchant, but also they can be dangerous to your online business, putting your merchant account at risk if you receive too many. Fulfilling an online order can be risky, you face the threat of customers that make a purchase, file a phony dispute with their credit card company and keep the merchandise and their money. However, with the recent influx of data breaches at US retailers, merchants need to focus in on gift purchases, and purchases that just seem odd. Below are tips to avoid a dishonest credit card chargeback.

Check the basic information

Be wary of orders that have dramatically different shipping and billing addresses, mainly if the shipping address is in a different country. You’ll probably see different shipping and billing addresses for legitimate orders from time to time, as gift orders are very popular, but watch for address information that simply looks wrong. If your gut tells you that there may be something wrong with the order, call the customer and question the purchase.

Watch for abnormally large orders

In particular, you should be wary orders that have a large quantity of a single item – especially if you sell higher-priced items. For example, it is not likely that a single customer would need 15 digital cameras or 20 smartphones. Essentially, if an order is so large that is looks too good to be true, it probably is.

Require a signature on delivery

Particularly for large transactions, this may be worth the extra expense. By requiring a signature, your customer cannot make the claim that they never received the merchandise, since they would be liable for the package after it is signed for.

Legitimate chargebacks are hard on a business, let alone a chargeback that has resulted from a fraud. By implementing the above tips, you are sure to lessen your changes of suffering a credit card chargeback due to a fraudulent purchase.

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