Sure, it’s only August, but if you are an e-tailer, you are already thinking about the holiday season. Here are 5 top payment processing tips to reduce fraud and prevent chargebacks. Make the most of the holiday rush by being prepared!
1. Manually verify the order — While it sounds time consuming, sometimes your best bet is a little human interaction. If in doubt:
- Call or email the customer to make sure the order is legitimate.
- Reverse look up the phone number and check that the phone number matches the ZIP code area. Mismatched phone numbers and ZIP codes typically create higher fraud rates.
- Look for different bill-to and ship-to addresses.
- A foreign credit card shipping locally often is a warning sign for fraud.
- Shipping to a temporary address, such as hotel or PO Box can be an indicator. A quick phone call can prevent a chargeback.
2. Check IP — If your system can check where IP address are from, you will be able to identify anomalies such as a billing/shipping address in one country, and the IP address locator indicating the IP address used was from another country. This can trigger the merchant to evaluate the purchase and take anti-fraud measures.
3. AVS Match — Using AVS is a must. Merchants can set up AVS to accept or reject orders based on certain criteria. Your system should allow customers to enter both billing and shipping addresses. It is critical that the billing address matches the customer’s credit card information. If it doesn’t match, the credit card company will automatically side with the customer in a chargeback. Enable your AVS to reject orders that don’t match the billing address and ZIP code.
4. CVV2 Match — It is against Visa/MasterCard regulations to store the CVV2 number. By verifying it, it helps assure that the person placing an order physically had possession of the credit card that was used.
5. Create a block list — Many payment processing solutions allow you to create a “block” list. For example, you may block countries or IP addresses that are typical sources of online fraud. You might hesitate to block a large segment of perceived potential customers, but smart choices can reduce fraud. Consider your industry, customer base, buying behavior, and other unique business characteristics when creating your block list.
U.S. merchants incurred losses of over $150 billion resulting from stolen merchandise; identify theft, and lost interest and fees associated with chargebacks, according to a LexisNexis Risk Solutions report.
TC CrediGuard can be merchant’s fraud protection partner. It is sophisticated fraud detection and scoring software featuring a Web-based management console. Monitor 24×7 by activating different checks to aid in fraud prevention specific to your unique environment and industry.
Velocity Controls allow the merchant to determine when an account behavior is excessive or abnormal. Options include:
- Global: restricts the total number or dollar value of transactions
- ZIP code: restricts the total number or dollar value of transactions submitted from a certain ZIP code
- IP Address: restricts the total number or dollar value of transactions submitted from any one IP
- Credit Card: restricts the total number or dollar value of transactions submitted from any one credit card
Merchants can create a Black List rule to indicate the value to be blocked. Transactions that match a Black List rule are not processed and are reported as Declined/Blacklist.
- ZIP code
- IP address
- Full credit card number
Use TC CrediGuard in conjunction with AVS and CVV checking for powerful results. To learn more, call 800.915.1680 and speak with a solutions consultant.