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How can an online merchant protect itself from unscrupulous chargebacks?


Topic Expert
Anand Goel
Title: CEO
Company: Optimized Payments Consulting
(CEO, Optimized Payments Consulting) |

Here are some ways to reduce the risk of chargebacks for online fraudulent or unauthorized transactions. Always perform AVS and CVV checks on every transaction (more detail below).

> Negative Database – By maintaining a database of problem customers, you can identify high-risk transactions, block specific credit card numbers and disallow future purchases.

> Multiple Orders – By limiting the number of transactions per hour, day or week from a specific customer, you may reduce potential fraud.

> Address Verification Service (AVS) – AVS is a fraud reduction service that allows you to verify a cardholder’s address prior to completing the sale. The AVS system indicates if there is a full, partial or no match response on the address by comparing an address in the card issuer’s database.

> Know Your Customers – You may avoid chargebacks simply by getting to know your customers. For example, you can capture the customer’s telephone number, then call back to verify the order.

> Customer Service Phone Number – Make sure your customer service phone number is printed on the receipt. This makes it easier for customers to resolve disputes by phone rather than through the chargeback process.

> CVV2/CVC2 – Both Visa and MasterCard have this security feature printed on the back of their cards, which you can verify as an additional security check.

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