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BizReport : Ecommerce archives : April 02, 2019

Top 3 tips to cut back on "friendly fraud"

So-called "friendly" fraud is a thorn in the side of many retailers and merchants because there is little interest, from the consumer side, in learning about what this kind of fraud is. It happens with a consumer orders a product or service, forgets about receiving the product or service, and asks their credit card company to charge-back the retailer. What can merchants do to prevent this type of fraud? Here are three tips.

by Kristina Knight

First, look at where friendly fraud begins

"Identify the root causes of your chargebacks. Tracing the roots will help you determine the solution and tools needed to prevent friendly fraud. It is estimated that 20 - 35% of chargebacks happen due to operational issues. Use an analytical tool or third-party provider to determine the true reasons behind your chargebacks," said Srii Srinivasan, CEO, ChargebackGurus.

Second, ensure your payment processing system asks for the CVV and verifies the customer address.

"Always verify the address and CVV (Three-digit code at back of card) of your customer. Ship your goods only to the billing address that is on file with your customer's credit card. To accomplish this goal, use Address Verification System (AVS) to ensure that the billing address and the shipping address are the same. Also, authorize purchase only with a valid billing address. If billing and shipping address is different, use third party tools to verify if the shipping address is a residence or a P O Box or office. Avoid shipping to P O Box for large ticket items," said Srinivasan.

Third, use payer authentication programs

"Participating in payer authentication programs such as Verified by Visa, MasterCard SecureCode, Amex SafeKey and 3D Secure 2.0 helps your business to minimize friendly fraud chargebacks," said Srinivasan.

And don't forget, detection is key to the process, as well. Here are three of Srinivasan's tips to detect friendly fraud:

▪ Simple return and refund policies can help merchants prevent friendly fraud.
▪ Top notch customer service, trained personnel and 24/7 support has been proven to reduce friendly fraud.
▪ Communicate with your customers about their orders and rebills before and after billing to keep them aware of the transactions. Surprises often lead to consumer disputes.

Tags: Chargeback Gurus, ecommerce, ecommerce returns, friendly fraud, mcommerce returns, mobile commerce, mobile marketing

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