As a business owner, it’s in the best interests of your company to guarantee customer satisfaction and loyalty. You want buyers to not only keep patronizing your goods and services, but to tell their friends about your products. Even though you work hard at building a solid relationship with your audience, you may encounter a scam artist who takes advantage of your good will. Online fraud can impact your sales and revenue and cause you to become suspicious of certain consumers.
Chargeback abuse can take many forms. For example, a thief may make a large online purchase with a stolen credit card and then turn around and return it for a cash refund or gift card. He or she can then purchase another item and sell it for cash. In some cases, the fraudster receives a “double refund” after receiving a refund from the online company and then a chargeback on the credit card.
As an Internet retailer, it’s imperative to have fraud prevention methods in place to protect your business from chargeback abuse. There may be honest customers who have a legitimate issue that necessitates the need for a chargeback, but high rates of return that are questionable can negatively impact your business.
Chargebacks can occur for many reasons, such as customer disputes, processing errors, authorization issues and non-fulfillment of orders. The more proactive you and your staff are about proper merchant procedures, the less likely you’ll be to do something that might result in an unwanted chargeback. And remember that chargebacks are not always the consequence of something merchants did or did not do. Card issuers and cardholders can be just as guilty in making errors.
Chargeback abuse is becoming a reality for many merchants, but for the diligent small business owner, it does not have to affect your bottom line. Take precautions when shipping to international addresses, of large quantity orders and repeated attempts to order on the same card. Fraud prevention measures can help you win the fight against e-commerce fraud.
