Chargeback Gurus' Audio Blog: Recent Episodes
Chargeback Gurus
Chargeback Gurus is a global company offering chargeback management and analytics solutions to increase customer satisfaction and drive repeat purchases. As trusted advisors to card networks, financial institutions and the Fortune 500 — Chargeback Gurus empowers businesses to combat constantly evolving fraud tactics and customer disputes that directly threaten profitability.
A brief history of brick-and-mortar shopping would reveal a trend of less and less contact between the customer and the cashier over time. First there was cash, then came payment cards, and now contactless payments through digital wallets are becoming increasingly common.
While you’re probably still doing most of your in-person shopping with a credit or debit card, a future where contactless payment is the norm is getting closer every day. Recently, twenty-nine countries in Europe and Asia changed their regulations to allow for higher contactless payment limits. Is this good news for tech-savvy merchants, or are there potential drawbacks to watch out for?
The timing couldn’t be more ripe for an expansion of contactless payment schemes. The COVID-19 pandemic changed customer behavior in many ways, including many customers trying to limit how often they touched things other people have touched. While some things have gone back to normal, many will want to keep using contactless payment methods now that they've discovered the convenience of not having to insert a card and wait a few seconds for each transaction.
Full Text:
https://www.chargebackgurus.com/blog/contactless-payment-limits-increase
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Many merchants, businesses, and consumers rely on credit and debit cards for daily transactions. But with the rising popularity of cards comes the increased risk of cases of fraud, which could spell disaster for merchants when chargeback ratios rise and profits plummet. Hence, security measures are put in place to protect all the parties concerned.
The initial string of numbers on your card make up the Bank Identification Number (BIN), which can be used to identify the card’s issuing bank or institution. What do these numbers mean and what role do they play in business transactions? How do these numbers help merchants?
Here’s what you need to know about Bank Identification Numbers and their uses.
Full Text:
https://www.chargebackgurus.com/blog/bank-identification-number
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
When the lawmakers who wrote the Fair Credit Billing Act of 1974 created the legal mandate for chargebacks, they were thinking about protecting consumers from credit card thieves and dishonest merchants. They probably weren’t anticipating the way the chargeback process itself could become an instrument of fraud.
The truth is that credit card disputes exist to help consumers who are victims of fraud. When consumers leverage that system to take advantage of merchants, however, they are committing what's called credit card dispute fraud.
What is credit card dispute fraud? It is when cardholders claim that legitimate transactions were fraudulent in order to claim free goods and services. When consumers dispute credit card transactions based on false claims, they’re committing fraud—and merchants are the victims. Fraudulent chargebacks are extremely costly to merchants, whether they’re accepting the loss to their revenue or taking the time to fight them. What can merchants do to protect themselves from credit card dispute fraud?
Full Text:
https://www.chargebackgurus.com/blog/credit-card-dispute-fraud-prevention
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
PayPal has come a long way since the days when it first arrived on the eCommerce scene, back when eBay buyers were still mailing paper checks to sellers. Today, they offer a wide range of merchant services, including functioning as a payment processor and an acquirer.
Familiarity and convenience are what draw many merchants to PayPal, but one of its biggest advantages is the PayPal Resolution Center, which is designed to resolve merchant disputes without involving the customer’s issuing bank. In other words, it helps merchants avoid chargebacks. How can merchants make best use of the PayPal Resolution Center to keep their customers happy and protect their revenue?
Full Text:
https://www.chargebackgurus.com/blog/paypal-resolution-center
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
In the early days of ecommerce, returning a product you’d purchased online was a hassle. All the convenience of shopping from your computer seemed to evaporate when you’d have to repackage a product and wait in line at the post office to send it back.
Reusable boxes, pre-printed shipping labels, and other conveniences have taken a lot of the sting out of returning an online purchase, but some merchants find easy returns to be a double-edged sword. How can merchants create return policies that keep customers happy without putting too much of their revenue at risk?
Full Text:
https://www.chargebackgurus.com/blog/customer-return-policy
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
The last chance a merchant has to stop a chargeback from happening is when the cardholder is on the phone with their bank asking for one. Unfortunately, the merchant is rarely involved in these conversations. While the bank may try to guide cardholders toward investigating an unfamiliar transaction on their end, or resolving a product complaint directly with the merchant, they don’t always have enough information to prevent every invalid chargeback.
Visa hopes to address this problem with Order Insight, a collaboration tool from Verifi. Can merchants make effective use of Order Insight to provide issuers with purchase details in time to stop chargebacks?
Full Text:
https://www.chargebackgurus.com/blog/order-insight
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
When we discuss chargebacks, there’s often an implicit assumption that we’re talking about Visa and MasterCard transactions. These two card networks facilitate the vast majority of credit and debit card purchases in the United States, and their policies and procedures tend to be similar where chargebacks are concerned. When you’re dealing with chargebacks from other card networks, you might find yourself in unfamiliar territory.
The way American Express handles disputes and chargebacks is different in several key ways, which can trip up merchants who aren’t used to it. What do merchants need to know about navigating the American Express chargeback process?
Because they carry higher interchange fees than Visa or MasterCard transactions, not every merchant accepts American Express cards. However, they are popular with many consumers, and some merchants may find that accepting them leads to better customer experiences and increased sales.
If you do accept American Express cards—or if you’re considering it—it’s important to learn how their dispute process works and where American Express chargebacks will fit into your overall strategy of preventing and fighting chargebacks.
Full Text:
https://www.chargebackgurus.com/blog/american-express-chargeback
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
Credit cards make it incredibly easy to make payments at online and in-person retailers, but when it comes to informal transactions between friends and family, they’re a non-starter. With fewer people making a habit of carrying cash around, peer-to-peer payment apps like Venmo have stepped in to make it easy to make small electronic payments to individuals.
As Venmo’s popularity grows, some merchants are starting to accept it as a form of payment, but even Venmo transactions can turn into chargebacks. Before leaping into the brave new world of P2P payments, what do merchants need to know about Venmo chargebacks?
Since its debut in 2009 as an app designed to facilitate bill-splitting and IOU payments between acquaintances, Venmo’s user base has grown to exceed 40 million people, making it one of the most popular and widely-used P2P payment platforms. Venmo is especially popular among younger demographics, so many merchants who target those age groups see a clear benefit to including Venmo as one of the payment options they accept.
Full Text:
https://www.chargebackgurus.com/blog/venmo-chargebacks
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
The coronavirus pandemic has had a singular influence over consumer shopping habits this year, with shutdown orders and safety concerns forcing many brick-and-mortar retailers to operate at reduced capacity or close their doors entirely. Ecommerce merchants have had to step up to meet a massive upswell in in demand, and with the holiday season upon us, the biggest surge may be about to hit.
This wave of new customers could mean big profits for online merchants—as long as their fraud screening tools don’t falsely flag them. What can merchants do to make sure that anti-fraud algorithms don’t turn away customers new to ecommerce shopping?
Fraud is a pernicious problem that carries many negative consequences for its victims, but the opposite problem—good customers mistakenly identified as fraudsters—can have financial consequences for merchants that are just as serious. Some analysts estimate that the revenue losses from false declines exceed that of fraud by a factor of 70. A false decline won’t lead to a downstream problem like chargebacks, but it can have a serious negative impact on your business.
Full Text:
https://www.chargebackgurus.com/blog/holiday-false-declines
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
As an ever-greater share of consumer purchasing shifts to the world of eCommerce, people are using their credit and debit cards more than ever before. It’s easy for them to lose track of how many card purchases they’ve made, where they made them, and what they were for.
Billing statements provide an opportunity for cardholders to review their transactions, and when they see one that they don’t recall making, that may be a sign of fraud—or it may just be that the merchant description attached to the card is vague or confusing. How can merchants create recognizable billing descriptors that won’t get mistakenly reported as fraud?
Full Text:
https://www.chargebackgurus.com/blog/merchant-descriptor
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
Phone numbers have become a common way to verify your identity online. We’re in an era where many of us view our smartphones as practically extensions of ourselves, so it stands to reason that sending a text message to a personal phone number is a good way to perform two-factor authentication or validate a login from an unfamiliar device.
This method is secure and effective—unless a fraudster manages to hijack your phone number with a SIM card swap. It’s not the easiest scam to pull off, but when it succeeds, what can victims do to mitigate the damage and protect their online accounts?
Many of the apps and sites that store our most valuable personal data—like our social media, email, and online banking—use our phone numbers to make sure we are who we say we are when we’re trying to access or make changes to our accounts. After all, most of us always have our phones nearby, and replace them immediately when they’re lost or broken.
Full Text:
https://www.chargebackgurus.com/blog/sim-swap-fraud
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
The most important step when processing a credit card transaction is getting an authorization from the card issuer. This provides the confirmation that the customer’s identity has been verified to the best extent possible, and that the card is valid and has sufficient funds to cover the purchase.
A card transaction that hasn’t been authorized is like a great big bullseye target for chargebacks. However, interpreting the authorization codes that the issuer sends back can be confusing. What do the various codes sent back in authorization response messages mean, and how can merchants use them to make safer decisions when processing transactions?
Full Text:
https://www.chargebackgurus.com/blog/credit-card-response-codes
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
In this hyperconnected digital world we’re living in, customers can come at you from any direction, and smart merchants are learning to meet their customers where they’re at—no matter where that might be. The name for this approach of marketing and selling across multiple platforms is the omnichannel, because it encompasses every possible vector through which merchants might engage their customers.
Unfortunately, any conduit for customers will also bring fraudsters, and the omnichannel presents them with multiple opportunities and vulnerabilities to exploit. How can merchants safely take advantage of omnichannel marketing without exposing themselves to excessive fraud and chargebacks?
Full Text:
https://www.chargebackgurus.com/blog/omnichannel-payments
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
To many American consumers, it may feel like QR codes had their moment a few years ago, but they never really went away—and with contactless payments becoming a big priority in light of the COVID-19 pandemic, they’re starting to make a comeback.
QR codes offer an easily accessible way to receive contact-free payments without investing in the near-field communications hardware required by many digital wallet platforms, but greater accessibility sometimes means a greater risk of fraud. How are fraudsters exploiting QR codes to steal money, payment card credentials, and sensitive personal data?
QR (Quick Response) codes were invented in 1994 to track materials in automobile factories, but the dawn of the smartphone helped them take off in a big way for the average person. While they were prevalent for a time, they never quite found their essential purpose—not in the United States, anyway, where they typically served as shortcuts to load a URL or contact information on your phone. In China and Southeast Asia, however, they found widespread use as a means to facilitate digital payments.
Full Text:
https://www.chargebackgurus.com/blog/qr-code-payments
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
At a glance, processing a credit card payment couldn’t seem more straightforward. The card goes in the slot, the terminal does some behind-the-scenes communication with the credit card mothership, the customer scribbles a rough approximation of their signature on the screen, and presto—a transaction has occurred.
For the layperson, this explanation may be sufficient, but merchants need a better understanding of the technical details of credit card processing in order to protect themselves from fraud and chargebacks. What do merchants need to know about how credit card processing works, and how can this inform the best practices for handling transactions?
Full Text:
https://www.chargebackgurus.com/blog/credit-card-processing
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Every merchant knows how their transaction process is supposed to work. The customer gives you money, and you give them your goods or services in return. It’s never ideal when merchants have to give money back to the customer, but of course it happens frequently and is sometimes unavoidable.
When you’re dealing with payment cards, there are three different ways that payment reversals can occur. Each happens for different reasons, with its own special implications for the merchant. What are the three types of payment reversals, and how can merchants minimize the impact reversals have on their revenue?
Full Text:
https://www.chargebackgurus.com/blog/payment-reversals
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Every merchant knows that when it comes time for a customer to make a payment to complete a purchase, any little bit of friction can lead to annoyance, second thoughts, and a lost sale. Once consumers get used to an easier way of paying for things, they rarely like to revert back to the less convenient way of doing things.
“Seamless” transactions have been the watchword for a while, but the industry is turning its eye toward idea of invisible payments. What are invisible payments, how do they work, and what do merchants need to do to prepare for this new way of conducting transactions?
Full Text:
https://www.chargebackgurus.com/blog/invisible-payments
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Back in the days of check fraud, brick-and-mortar stores used to post mugshots behind the cash register that said, “Do not accept checks from this person!” Not a very sophisticated anti-fraud solution—but it worked. In the era of eCommerce fraud and cybercrime, things aren’t as simple.
Online anonymity is the fraudster’s best weapon, and consumer demands for stricter privacy regulations have the side effect of making it even easier for fraudsters to mask themselves. However, device fingerprinting remains an effective and hard-to-evade method of identification. How can device fingerprinting be used to stop fraudsters and prevent chargebacks?
Full Text:
https://www.chargebackgurus.com/blog/device-fingerprinting
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Life would be easier for merchants if customers never wanted to return things, but returns are a fact of life and an inevitable cost of doing business. The silver lining is that every return is a potential chargeback avoided—if the customer hadn’t gone through the return and refund process, there’s a good chance they would have tried to get their money back from their bank instead.
In fact, returns and chargebacks often share the same root causes, and refunds are always preferable to chargebacks because they’re cheaper and less harmful to your business. What are the most common reasons behind customer returns?
It’s good to have a generous return and refund policy. When customers know they can come to you with their problems, return an unwanted purchase, and get their money back, they have little reason to dispute the transaction with their bank instead. With a return and refund, you’re only out the cost of the transaction, and you may even be able to resell the returned product.
Full Text:
https://www.chargebackgurus.com/blog/return-reasons
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Many of the most effective fraud prevention methods are all about answering one simple question: is the person making the transaction really who they claim to be? There are various ways to put this to the test, but none of them are infallible.
Many merchants choose to rely on two-factor authentication by requiring their customers to log in with a password and then enter a one-time code sent to their phone via SMS messaging. How reliable is SMS verification when it comes to authenticating the true identity of a person trying to make a credit card purchase?
Most methods of identity verification are based on an idea called “the three factors of authentication.” The premise is that you can verify someone’s identity by using three different factors: something they know, something they are, and something they have. “Something you know” could be a login password. “Something you are” could be biometric data, like a fingerprint. And “something you have” could be a smartphone.
Full Text:
https://www.chargebackgurus.com/blog/sms-verification
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
In the fast-paced mobile economy, peer-to-peer payment apps are surging in popularity over older, more laborious methods of sending and receiving money. Platforms like Cash App make it easy to exchange quick, informal payments, even for users who aren’t customers of traditional banking institutions.
The downside is that cybercriminals are flocking to these platforms too, exploiting their unique features to take advantage of users who are still learning the best ways to protect their finances over these new and convenient apps. What makes Cash App vulnerable to fraud, and how are scammers taking advantage of it?
Full Text:
https://www.chargebackgurus.com/blog/cash-app-fraud
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
Every day, banks and card networks process hundreds of millions of payment card transactions. These digital exchanges are the lifeblood of eCommerce—and many brick-and-mortar establishments, too. With so many businesses participating in this payments ecosystem, you have to wonder how all of these different entities can tell merchants apart and route their transactions to the right recipient every time.
The answer is that every merchant has a unique signifier that functions as their home address in the payments world: their Merchant Identification Number, or MID. What is the significance of your Merchant Identification Number, and what does it actually do for you?
Full Text:
https://www.chargebackgurus.com/blog/merchant-identification-number
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Imagine rigorously following the best practices for ecommerce security, using complex passwords and two-factor authentication for every site you visit…only to be betrayed by your own refrigerator. It’s not that far-fetched—as Internet of Things devices continue to make inroads with consumers, fraudsters are taking a long look at the ways in which these devices can be subverted and hijacked for criminal activity.
Merchants who manufacture, sell, or interface with IoT devices may find themselves facing a rising tide of chargebacks from new and unexpected sources. How do Internet of Things devices open the door to fraud, abuse, and chargebacks?
The global market for IoT devices is expected to grow by more than 10% annually over the next few years. As is often the case with new technologies, first we laugh (“does my dishwasher really need to be connected to the internet?”), then the must-have devices start hitting the market, and before you know it, they’re everywhere.
Full Text:
https://www.chargebackgurus.com/blog/internet-of-things
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Chargebacks can come at you from so many different directions, and it can be tough to come up with a strategy to stop them all. The tools and prevention methods that work to minimize true fraud chargebacks, for example, will do nothing to help you avoid chargebacks that result from merchant error or friendly fraud.
Many merchants feel overwhelmed by the scale of the chargeback problem, and turn to their payment processors and outside vendors for help. Some of these providers offer chargeback protection in the form of services or guarantees that promise to mitigate the threat of chargebacks. Do chargeback protection plans really work?
Full Text:https://www.chargebackgurus.com/blog/chargeback-protection-services
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
If you've got a fraud problem, you've got a chargeback problem. Chargeback rights were enshrined in the law specifically to combat the problem of credit card fraud, which has only grown more pervasive as ecommerce takes over our shopping habits. True fraud chargebacks are especially problematic because they cannot be fought after the fact, only prevented in advance.
One way for merchants to get ahead of fraudsters is by using fraud filters that identify and screen out potentially fraudulent transactions. How well do fraud filters really work, and how they best be used to proactively avoid true fraud chargebacks.
Online retail fraud keeps growing more and more prevalent, costing merchants hundreds of millions of dollars every year. In 2020, the COVID-19 pandemic pushed consumers toward ecommerce shopping in even greater numbers, and all that increased activity has caused a commensurate rise in fraud attempts.
When a consumer finds out that their card has been stolen and used to make unauthorized purchases, their best recourse is to report the fraud to their bank and receive a chargeback.
Full Text:
https://www.chargebackgurus.com/blog/fraud-filters
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
To thrive in the interconnected world of ecommerce, merchants can't just handle everything on their own. Partners and vendors provide merchants with their network connections, web hosting, and many other specialized services—such as credit card processing.
Every day, merchants rely on their payment processors to make it possible for them to accept the card transactions that make online shopping possible. Your relationship with your payment processor is an important one, and it can have a big impact on your bottom line. What do payment processors really do, and how can you choose the best one for your business needs?
In both card-present and card-not-present environments, making a credit card payment has become a swift and seamless process. The customer provides their card information, the transaction is authorized, and payment is complete. It all transpires within a matter of seconds, despite the fact that quite a lot of behind-the-scenes communication is happening to make sure everything is carried out properly.
While there are many entities involved in every credit card transaction, the payment processor does a lot of the heavy lifting. Payment processors make their money by charging fees for the transaction activity they handle—including chargebacks, which are detrimental to the overall payments ecosystem and can have a negative impact on everyone involved in them.
Full Text:
https://www.chargebackgurus.com/blog/payment-processors
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
Getting away with fraud isn’t always easy. As hard as fraudsters try to find newer and sneakier ways to steal payment credentials and deceive merchants, the smartest minds in the payment industry are always finding ways to stop them.
Sometimes the only way to get around state-of-the-art fraud detection is to make everything appear as legitimate and above-board as possible by avoiding all of the usual signs and indicators. Fraud is a dirty business—and some of the most dangerous fraudsters are the ones who make it look clean. What can merchants do to protect themselves from so-called clean fraud?
Clean fraud can come in many forms. It’s defined by its ability to evade detection by normal anti-fraud tools and methods, which can be accomplished in a variety of ways. What makes clean fraud so dangerous for merchants is that it’s so difficult to prevent—you usually won’t know you’ve been victimized by clean fraud until after the cardholder realizes it and demands a chargeback.
Full Text:
https://www.chargebackgurus.com/blog/clean-fraud
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
Credit card fraud is one of the biggest problems plaguing ecommerce today. It steals money from innocent victims, saps consumer confidence in online shopping, and saddles merchants with expensive and harmful chargebacks. To fight this problem, the industry has backed a set of standards designed to protect consumer data from fraudsters.
The Payment Card Industry Data Security Standard applies to all organizations that process credit cards from the major card networks, and provides guidelines on how to safely handle cardholder information to reduce fraud and data theft. How can merchants protect their customer data and prevent fraud by complying with the PCI-DSS?
Adhering to the PCI-DSS standards isn’t just a matter of internal practice. Compliance with PCI-DSS is certified by the PCI Security Standards Council, and for many merchants, PCI-DSS compliance certification is an important way to communicate to their customers and partners that they take data security seriously and have taken all the steps necessary to protect sensitive data to the best of their ability.
Full Text:
https://www.chargebackgurus.com/blog/pci-dss-compliance
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
There are good reasons to offer different billing options for a service. Creating accessible payment plans for the budget-conscious, for example, while offering savings to customers willing to make a larger up-front investment. Sometimes, the billing plan itself is part of the sales pitch, like a free trial or bonus offer that’s too good to pass up.
When the catch is that accepting the offer locks the customer into recurring billings that must be explicitly opted out of, that’s negative option billing, and it can be a frequent source of disputes. What do merchants need to know about using negative option billing?
The history of negative option billing predates the era of ecommerce, and it has never enjoyed a particularly good reputation among consumers, despite the fact that the book-of-the-month and mail-order record clubs that relied on negative option billing offers used to be fairly popular.
Full Text:
https://www.chargebackgurus.com/blog/negative-option-billing
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
Anyone who engages in online gambling understands that there’s a significant element of risk involved. Playing games of chance and letting the odds determine your fate always carries some danger that you’ll end up losing, but the rules you’re playing by are supposed to be fair.
Fraudsters upend this delicate balance by forcing themselves into online gambling scenarios where they can, cheat, hack, and steal to take advantage of both the house and other players. How is fraud impacting the world of online gambling, and what can merchants to do get this problem under control?
Online credit card fraud is a huge problem for every merchant in ecommerce, from the biggest and most family-friendly retailers to small, niche-oriented internet gaming sites. The total global cost of cybercrime may exceed $6 trillion per year by 2021, and a significant portion of that financial burden falls directly on the merchants who sell goods and services over the internet. The costs of ecommerce fraud come back to bite merchants in multiple different ways.
Full Text:
https://www.chargebackgurus.com/blog/online-gambling-fraud
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Phil Claffey
In some ways, online fraud is like any other sector in the tech industry—in order to stay profitable, they have to keep innovating. It’s not always easy to extract actual cash money out of a stolen credit card number, and most fraudsters are interested in cash and not whatever random goods they can purchase before the card gets reported and blocked.
One scheme that fraudsters have come up with to maximize their ill-gotten revenue is triangulation fraud, which effectively launders stolen credit through a legitimate merchant. What can merchants do to keep from getting unwittingly entangled in triangulation fraud?
Organized, professional fraudsters don’t amass thousands and thousands of stolen credit card numbers so they can use them for online shopping sprees. They’re trying to convert a plentiful resource—compromised data—into a more valuable one: cash.
Full Text:
https://www.chargebackgurus.com/blog/triangulation-fraud
©Chargeback Gurus 2021
Production: Emily Woodward
Narration: Sarah Rife
Credit card fraud remains one of the biggest problems to plague ecommerce. For the most part, consumers accept the risk, knowing that they’re protected from liability if someone uses their card without authorization. This protection comes in the form of chargebacks, and merchants end up footing the bill.
Merchants are stuck accepting true fraud chargebacks and eating the associated costs and fees. The only real way to avoid true fraud chargebacks is to identify or prevent fraudulent transactions before they can be completed. How can merchants detect credit card fraud in time to stop it from happening?
Payment cards are easy to use because you only need to transmit a few simple numbers to the bank in order to identify your account and authorize the transaction. This simplicity makes them vulnerable as well, because it’s very hard to practice rigorous data security on a few simple numbers that must be shared with the parties you’re transacting with.
Full Text:
https://www.chargebackgurus.com/blog/credit-card-fraud-detection
©Chargeback Gurus 2021
Production: Tyler DeLarm
Narration: Sarah Rife
Fraud is an ever-present danger for ecommerce merchants, and true fraud chargebacks can be some of the most frustrating to deal with. Even when you've optimized your business operations to reduce merchant error chargebacks and have a good system in place for fighting friendly fraud chargebacks, true fraud can remain a persistent problem, and there's no way to fight them after the fact.
The best strategy for merchants is to follow best practices for preventing fraud and use effective and up-to-date fraud prevention tools. When merchants are struggling with fraud, how can they select the right tools for the job?
Fraud based on payment card and identity theft just keeps growing and growing in the card-not-present environment, despite significant efforts from card networks and other stakeholders to get the problem under control. In fact, 2019 was the worst year for online fraud on record. Fraud is a problem that concerns every merchant, and true fraud chargebacks are inevitable.
Full Text:
https://www.chargebackgurus.com/blog/fraud-prevention-tool
©Chargeback Gurus 2021
Production: Tyler DeLarm
Narration: Phil Claffey
To protect your ecommerce business from fraudsters, you need the right tools for the job. Good fraud prevention tools can identify and screen out fraudulent transactions, but there’s always a balance to be struck. If you reject orders that come with even the smallest red flags, you might reject legitimate customers. If you’re too lenient, the anti-fraud tools can’t serve their purpose. One solution is to manually review the orders that fall into this gray area. Are manual review processes the best way for merchants stop fraud and chargebacks while minimizing the risk of turning away real customers?
When you’re trying to bring down a rising chargeback rate, one of the most persistent challenges is dealing with true fraud. While friendly fraud chargebacks can be fought and won, and merchant error chargebacks can show you where you need to improve your business operations, by the time you see a true fraud chargeback it’s too late to do anything about it. The only thing you can do to beat a true fraud chargeback is prevent the fraud before it occurs.
Tools that screen for fraud during the transaction process can identify many possible fraud indicators: mismatched addresses, suspicious IP or geolocation data, strange ordering patterns—there are all sorts of red flags you can look for, and they can vary depending on the country, industry, even the individual merchant. Anti-fraud screening tools can apply rules that look for these signs and block orders that fit certain criteria, but because of the subjective nature of interpreting certain fraud indicators, they do make mistakes sometimes.
Full Text:
https://www.chargebackgurus.com/blog/manual-review
©Chargeback Gurus 2021
Production: Tyler DeLarm
Narration: Sarah Rife
For consumers, few things are as frustrating as a package that never arrives. They’ve paid for it, anticipated it, waited for it…and it doesn’t show up. No matter what the cause—the carrier took it to the wrong address, thieves swiped it, it got lost under a conveyor belt somewhere—the buyer is going to want someone to make things right, and often that means they’re going to call their bank and demand a chargeback on the grounds that the merchant never delivered their order. Most carriers offer delivery confirmation, but is that really enough to protect merchants from these disputes?
“Merchandise not received” is a chargeback reason common to all the major networks, and it gets a lot of usage. It does serve an important purpose; there are plenty of fraudsters out there who will pose as legitimate merchants online, take money for orders, and never ship a single product. Unfortunately, it’s also an easy reason code to exploit for friendly fraud. For some people, working out product issues with the merchant is too much of a hassle—they’d rather just call their bank and lie about never having received the product at all.
Delivery confirmation would seem to be rock-solid evidence against this sort of chargeback, but “delivery confirmation” can mean many different things depending on the level of service you’re getting from your carrier. The confirmation methods themselves can also present some issues for merchants and customers.
Full Text:
https://www.chargebackgurus.com/blog/fighting-chargebacks-with-delivery-confirmation
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
It’s a little bit ironic that while cash-based transactions keep becoming increasingly less frequent, it’s never been easier to get cash. What once required an in-person transaction with a human bank teller became a self-service process at automated teller machines, and nowadays, who wants to bother hunting down an ATM that won’t charge fees when you could just get free cash back with any purchase at your local corner store? Once the exclusive domain of grocery stores, many merchants now offer cash back with a debit transaction as a convenience for their customers—but what happens when a customer asks their bank for a chargeback on a cash back purchase?
Merchants who operate brick and mortar stores and process card-present transactions are faced with the choice of whether to allow their customers to receive cash back on purchases made with their debit card. The main reason to do so is because customers like it! It’s easy and convenient, it costs them nothing, and if your store sells inexpensive sundries they may come in and buy something just because they need to get some quick cash. It can also be more convenient for merchants to reduce the amount of cash they have to deposit by converting it into card sales that will be settled electronically.
Full Text:
https://www.chargebackgurus.com/blog/dealing-with-cash-back-chargebacks
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
Visa is the world’s largest card network, with an annual purchase volume that exceeds $1 trillion. Nearly every merchant that accepts credit cards accepts Visa, and so it is vitally important for merchants to understand Visa’s chargeback rules, especially as they relate to fighting fraudulent chargebacks that come through the Visa network.
A solid grasp of these rules can help merchants win disputes, prevent chargebacks, and lower their chargeback rate. Of course, some of the rules are more relevant to common chargeback situations than others. What are the most important things for merchants to know about Visa chargebacks?
What are Visa Chargebacks?
When a cardholder files a dispute with the issuing bank that provides their Visa-branded credit card, the transaction becomes a Visa Chargeback, also known as a Visa Dispute. A transaction can be disputed whether it was made online, in person at a retail store, over the phone, or via mail.
Full Text:
https://www.chargebackgurus.com/blog/visa-chargebacks
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Phil Claffey
The very thing that makes credit cards so easy and convenient to use in so many different situations is the same thing that makes them so vulnerable to fraud. You only need to have a few key numbers to complete a credit card transaction, and in the age of ecommerce those numbers are being stored and shared constantly.
From one small act of data theft, a fraudster can potentially steal thousands of dollars. But credit card numbers don’t have to be permanent. Could the virtual account numbers that some banks are offering help to prevent ecommerce fraud and chargebacks?
A virtual account number is a lot like a tokenization scheme, but it gives the cardholder more control about when and how to make use of it. When a cardholder makes a transaction with a virtual account number, their actual card number is never transmitted to the merchant, making it impossible to steal, even if fraudsters have breached the merchant’s network defenses. Cardholders may also feel more secure using virtual account numbers with newer, smaller merchants that haven’t yet earned a trustworthy reputation.
Full Text:
https://www.chargebackgurus.com/blog/virtual-account-numbers
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
What does the latest must-see streaming video service have in common with the subscription box companies that ship grooming supplies and cocktail ingredients on a monthly basis? They’re both relying on recurring billing to get paid for the goods they’re providing. Popular with merchants and consumers alike, subscription services are a fast-growing trend in ecommerce.
There’s just one drawback—they tend to attract a lot of friendly fraud chargebacks. When subscriptions are a major contributor to your revenue stream, this can quickly become a critical issue. What can merchants do to keep their recurring billing transactions safe from chargebacks?
Even if your entire business model isn’t built around subscription services, there can be good reasons to offer them. They can provide a regular and predictable source of revenue and give you a greater ROI on your customer acquisition efforts. Consumers like them too, for reasons such as convenience of payment and the anticipation of monthly subscription deliveries.
Full Text:
https://www.chargebackgurus.com/blog/recurring-billing-chargeback
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
Stripe was founded on the premise of the online economy’s potential. It is a payment platform that allows merchants to collect and customers to send payments online and via mobile. Over the years, Stripe has seen a rise in popularity due to its customizable development tools and straightforward solutions.
While Stripe is preferred by a number of merchants for eliminating financial complexity, merchants still see a fair share of disputes. So what do you need to know to overcome your next Stripe chargeback?
Full Text:
https://www.chargebackgurus.com/blog/stripe-chargeback
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
The big problem with fraud is that it’s always changing forms. As soon as regulators and consumers get wise to a particular scheme and learn how to prevent it, the fraudsters come up with a new way to steal people’s money. Many forms of fraud involve exploiting the chargeback process, which is why the card networks keep handing down new mandates to get them under control. Next month, new Visa rules will be taking effect to deal with first-party fraud. What is first-party fraud, and what do merchants need to know about the changes Visa is making?
Merchants already know one of the more common forms of first-party fraud, which we usually refer to as “friendly fraud.” In fact, they’re overlapping categories—friendly fraud can sometimes be the result of a genuine misunderstanding on the customer’s part, but first-party fraud is understood to be intentional. The subset of friendly fraud that is committed knowingly—like when a customer regrets a purchase and disputes the charge by falsely claiming they made the purchase by accident, or that their child made the purchase without their permission—would be considered first-party fraud.
Full Text:
https://www.chargebackgurus.com/blog/first-party-fraud
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
The only effective way to stop true fraud chargebacks is to prevent fraud in the first place, and one of the most often recommended anti-fraud tools is Address Verification Service, or AVS. It works by matching the address provided by the customer against the cardholder’s address on file with the card issuer, where a discrepancy would indicate possible fraud. This can work well as a frontline defense against stolen cards, but it won’t catch every fraudster, and using it too restrictively could block out some legitimate transactions. How should merchants use AVS in their strategy to fight fraud and chargebacks?
Merchants and customers are quite accustomed to various degrees of AVS matching. We’re used to entering our full billing address at the online store, but the gas pump just gets our ZIP code. Who decides how much address needs to be verified? The merchant—although the banks may try to influence things in a “safer” direction with higher processing fees for unverified transactions.
If you’re dealing with a high rate of chargebacks resulting from true fraud, it’s worth taking a look at how your AVS is set up to see if it could be doing a better job of filtering out the fraudsters.
Full Text:
https://www.chargebackgurus.com/blog/avs-address-verification-service
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Phil Claffey
The chargeback process is heavily rule-based, and it can be tempting to believe that if you memorize the rules and follow them carefully, you can avoid any serious chargeback problems. As any eCommerce merchant can tell you, it’s not really that simple. In fact, there exists a special type of “pre-compliance” chargeback that banks can initiate to seek reimbursement from other banks when rule violations cause them financial harm. What should merchants know about these behind-the-scenes chargebacks—and more importantly, do they need to worry about trying to prevent them?
Pre-compliance chargebacks happen under the Visa card network as a way to resolve chargeback-related disputes between participants in the Visa network. When one party believed that another party had violated a Visa rule in the course of handling a dispute, they could file a chargeback under reason code 98 (“other”) to seek redress.
ith the introduction of the Visa Dispute Resolution system and the Visa Resolve Online (VROL) platform, reason code 98 became obsolete—Visa no longer wanted chargebacks filed under a generic catch-all reason code, and made the pre-compliance chargeback process a function of VROL.
Full Text:
https://www.chargebackgurus.com/blog/pre-compliance-chargebacks
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
The card networks are the final authority on chargebacks. All of the rules, reason codes, and phases of the chargeback process are designed by the card networks, and when the banks can’t agree on an outcome, the card network is the final arbiter. On the surface level, chargebacks appear largely the same no matter what network you’re dealing with, but each one has different regulations and time limits. To manage your chargebacks effectively, you have to know how to play by each network’s rules. What do merchants need to know about MasterCard chargebacks?
MasterCard and Visa are the two most widely used card networks, and it’s true that their chargeback processes are pretty similar. However, ignoring the differences between card network rules can cause you to miss response deadlines, misinterpret reason codes, and submit the wrong kind of evidence in representment. There’s nothing worse than getting stuck with an avoidable chargeback, so familiarizing yourself with card network rules is an important part of your overall chargeback management strategy.
The card networks update their rules regularly in order to account for the changing landscape of eCommerce and new forms of payment card fraud. The updated guidelines they publish aren’t exactly light bedtime reading, but they’re the best source for a comprehensive overview of the rules and the latest changes.
Full Text:
https://www.chargebackgurus.com/blog/mastercard-chargeback
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Phil Claffey
The growing online and global market has seen the rise in credit card disputes, many of which are billed as “friendly fraud” as a result of chargebacks being abused by consumers. Disputes take up a lot of time, resources, and research for merchants, card issuing agencies, banks, and even customers themselves.
The rising number of credit card disputes, also known as chargebacks, along with increasing processing times and costs has prompted Visa to come up with the Visa Claims Resolution (VCR) initiative. This system allows for a more streamlined processing of disputes via the Visa Resolve Online (VROL), Visa’s online service dedicated to dispute resolution. But how does the VROL facilitate faster dispute resolution, and how does this benefit merchants?
What Is Visa Resolve Online?
Before discussing Visa Resolve Online, it’s best to begin with the Visa Claims Resolution initiative to have a better understanding of this newer, more efficient dispute resolution system.
Visa has four known dispute categories: fraud, authorization, processing errors, and consumer disputes. While they cannot be avoided completely, steps can be taken by merchants, acquirers, issuers, and cardholders to reduce them.
Full Text:
https://www.chargebackgurus.com/blog/visa-resolve-online
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
You know how the old saying goes: give a person a Bitcoin and they might realize some short-term investment gains for a day; teach them how the blockchain works and they’ll understand a technology with a lifetime of potentially useful applications. Something like that, anyway. The real prize of the cryptocurrency boom may well prove to be the concept of the blockchain itself, or as many now prefer to call it, distributed ledger technology. As with any new technology, sorting out the genuinely good ideas from the hype can be difficult. Some companies are promising that DLT could be a solution for excessive chargebacks and friendly fraud, but is this a real answer or just more blockchain boosterism?
To give this question its due consideration, we have to take a few steps back and look at the history of credit card fraud and the payments industry’s attempts to fight it. When the EMV chip was introduced, it struck a major blow to the use of stolen cards in card-present environments, making it much harder for fraudsters to spend other people’s money at retail stores and other brick-and-mortar locations.
Not surprisingly, credit card fraud shifted heavily toward the card-not-present environment: the world of ecommerce. Unable to rely on physical EMV chips to screen out fraudulent transactions, online merchants and consumers were faced with a growing problem of low-risk, high-reward credit card fraud carried out over the internet.
Full Text:
https://www.chargebackgurus.com/blog/can-distributed-ledger-technology-prevent-friendly-fraud
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
When we talk about how to “fight and win” against chargebacks, what are we really saying? For the most part, what we’re referring to is chargeback representment. This is the part of the dispute process where the merchant has a chance to contest the chargeback and convince the issuing bank to reverse it and give back the disputed funds. It’s called representment because the merchant is “presenting” the charge a second time. Understanding how chargeback represenment fits within the overall dispute process is crucial to fighting back effectively.
To dispute a transaction and obtain a chargeback, cardholders must give their issuing bank a reason why the charge was invalid and they shouldn’t have to pay it. The issuer may ask some questions and try to dissuade cardholders from filing a baseless dispute, but in most cases the cardholder will receive a chargeback if they demand one.
Chargeback representment happens when the merchant does not agree with the cardholder’s claims and does not want to accept the chargeback. Upon receiving notice of the chargeback, they can submit the transaction again, along with evidence that proves its validity. This evidence is first received by the merchant’s acquiring bank, who sends it back upstream to the issuing bank, who makes a decision and notifies the merchant and the cardholder.
Full Text:
https://www.chargebackgurus.com/blog/what-is-chargeback-representment
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Phil Claffey
It’s been a long time since anything had as big an impact on the way we shop as ecommerce. Online shopping has had a tremendous influence on consumer preferences and expectations, and physical retailers have had to make many changes and concessions to keep shoppers walking through their doors.
One such innovation is allowing customers to make a purchase online, but holding it at a retail location for pickup instead of shipping it. This practice is a hit with consumers, but it has created new opportunities for fraudsters. How is the “buy online, pick up in store” trend causing new chargeback headaches for merchants with brick and mortar stores?
Many of the friendly fraud schemes and other common chargeback scenarios we discuss are native to the online ecommerce world and don’t always translate well to the card-present shopping environment, where EMV chips, face to face interactions, signatures, and other tangible artifacts can make it harder for fraudsters and unethical consumers to get away with the exaggerated claims and falsehoods that propel so many card-not-present chargebacks through the dispute process
Full Text:
https://www.chargebackgurus.com/blog/recurring-billing-chargeback
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
Merchants who deal in the necessities of modern life and other traditional commodities may feel less vulnerable to chargebacks than retailers operating in the wild west of ecommerce. Certainly, there are risks that are reduced when you’re selling straightforward products at physical storefronts. However, merchants should always seek to understand the specific chargeback scenarios that affect their type of business. This October, the chargeback liability for non-EMV transactions at gas stations will shift, putting those merchants at increased risk for chargebacks. Are fuel merchants prepared to make the changes necessary to protect themselves from a dramatic spike in chargebacks once this shift occurs?
EMV-enabled card readers are ubiquitous at brick-and-mortar retail establishments these days, and for good reason. The EMV chip helps to prevent the authorization of transactions made with stolen or cloned credit cards, protecting consumers and reducing fraud in card-present environments. Many gas station pumps, however, still use card readers that work by reading the magnetic stripe on the back of the payment card.
The risk of using non-EMV card readers at gas pumps is compounded by the existence of card skimmers. These are small electronic devices that criminals insert into the card reader itself. When a customer swipes their card at the gas pump, the skimmer reads the card information off of the magnetic stripe and stores it for later retrieval. When the fraudster comes back later to pick up the skimmer, they can use the stored payment card data to create “cloned” credit cards or to place card-not-present transactions over the phone or internet.
Full Text:
https://www.chargebackgurus.com/blog/gas-station-chargebacks
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Phil Claffey
For merchants making their first ventures into the waters of ecommerce, platforms like Shopify can be extraordinarily helpful. By serving as a single source solution for the biggest hurdles that new entrepreneurs face, these providers can be the deciding factor between a business idea becoming reality or not. Unfortunately, chargebacks will find Shopify merchants as surely as they will any other, and Shopify imposes some of their own requirements on the process. What do merchants need to know before they start dealing with chargebacks that come through Shopify?
Easy to set up and use, there are reportedly half a million active Shopify stores on the web, making it the third-biggest online retailer in the United States after Amazon and eBay. One of the roles Shopify can fill for merchants is as their payment gateway. That places them in the middle of all the merchants’ credit card transactions and makes them a key player in disputes and chargebacks.
In fact, Shopify will respond to the issuing bank and submit the merchant’s response in the event of a chargeback. Merchants who use Shopify must understand this and establish procedures to acknowledge and fight chargebacks from within the Shopify framework, as required, in order to stay on top of their disputes and keep chargebacks to a minimum.
Full Text:
https://www.chargebackgurus.com/blog/shopify-chargebacks
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Sarah Rife
Most of the anti-fraud tools available to merchants are designed to work automatically according to cold machine logic, using algorithms to block fraudulent transactions behind the scenes. In the card-present environment, however, merchants and their employees must sometimes make very human decisions to stop fraud while it is taking place. This may involve placing a Code 10 call to alert the issuing bank to possible fraud without tipping off the suspicious customer. How can merchants know when it’s the right time to call in a Code 10?
To the customer in the store, the Code 10 call sounds like a normal voice authorization request, with the merchant not saying much beyond answering “yes” or “no” questions. To the issuing bank, however, “Code 10” signifies that the merchant suspects possible fraud: either that the payment card has been stolen or tampered with, or that the customer is not who they claim to be.
For merchants and their employees, it can be difficult to make a confident decision about when and if to make a Code 10 call. It can also be nerve-wracking, as the call may have to be made in front of a person possibly engaged in criminal activity. Of course, merchants and workers must put their own safety first, but if they do not believe that placing the call will put them in danger, the decision should be made based on whether reliable indicators of fraud are present. Note that you can place a Code 10 call after the fact, but it will be too late to stop the transaction.
Full Text:
https://www.chargebackgurus.com/blog/code-10-authorization-calls-chargeback-fraud
©Chargeback Gurus 2020
Production: Courtney Freeman
Narration: Phil Claffey
The complex and fast-paced world of air travel is an irresistible lure for fraudsters. Keeping flights full requires selling plane tickets through a variety of channels and dealing with fluctuating prices, limited time frames, and many layers of regulations. This is an environment that fraud, identity theft, and black marketeering always finds ways to thrive in. For airlines and travel agencies, combating fraud and chargebacks can be an ongoing headache. How can participants in the air travel industry fight back more effectively against criminal fraudsters and customers who abuse the chargeback process?
Travel fraud comes in many different forms. Some fraudsters take over accounts in order to trade mileage points and other loyalty rewards on the dark web, others use the high transaction volume and frequent cancellations of the travel business to test out stolen card numbers without arousing suspicion, and some really just want to fly somewhere for free.
According to the International Air Transport Association, airline fraud costs airlines and travel agencies more than $800 million per year. While airlines may be able to bear some of these costs, it’s much harder for smaller, independent travel agencies who operate on slender margins to survive under high fraud or chargeback rates. For these merchants, it is extremely important to make use of appropriate fraud prevention methods and fight back against illegitimate chargebacks.
Full Text:
https://www.chargebackgurus.com/blog/airline-and-travel-agency-chargebacks
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
When it comes to fighting ecommerce fraud, we’re all in it together, every participant in the online payments economy: banks, payment processors, merchants, card networks. This isn’t just a feel-good call for unity—it’s a recognition of the fact that when consumers are victimized by fraudsters, hackers, and other cybercriminals, they tend to be very equitable about sharing the blame among every company that was involved in the incident, whether or not they were actually responsible. How can you maintain the trust of your customers and preserve your reputation when you’re likely to get held accountable for the gaps in another company’s cybersecurity?
Imagine that a fraudster uses payment credentials stolen from Merchant A to make a purchase with Merchant B. When the cardholder finds out, they’re going to be frustrated that Merchant A’s security measures were insufficient, but fairly or not, they’re also going to be upset with Merchant B for accepting the fraudulent transaction, with their issuing bank for failing to pick up on the early warning signs of fraud, for the card network for allowing the transaction to be processed. And of course, Merchant B will be on the hook for the chargeback.
Banks are going through similar issues, especially in the United Kingdom where laws were recently changed to make it easier to start up newer, smaller retail banks. Lacking the infrastructure, capital, and collective experience of the “big four” banks they’re competing with, these so-called challenger banks struggle to keep their cybersecurity protocols as strong as the larger banks’ and get preyed upon by opportunistic fraudsters.
Full Text:
https://www.chargebackgurus.com/blog/challenger-banks-cybersecurity-technology-gap
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
It’s no surprise that the subscription business model has taken hold of so many ecommerce merchants. In theory, it’s pretty hard to beat: once you convert a lead into a customer, all you have to do is keep giving them what they signed up for and they’ll reliably generate revenue for you every month. The unfortunate reality is that even payments from satisfied customers can vanish unexpectedly due to credit card declines, and getting them to update their payment credentials can be as challenging as converting them in the first place. What can merchants do to reduce credit card decline rates?
The first thing to bear in mind is that this is an extremely common problem for merchants who deal in recurring billing and subscription-based payment models. According to Visa and Mastercard, an average of 15% of recurring payments are declined, but for some industries the rate can be double that. Often, this is because cardholders have maxed out their credit limit, but it’s also common for cards to be declined because payment credentials have changed, and not just the expiration dates—30% of credit cards are reissued every year, frequently because of fraud and data theft.
What’s especially frustrating for merchants is that many customers seem to regard a declined subscription payment as a sign from the universe that it’s time to let that subscription lapse, anyway—the success rate for updating a card after its first decline is about 5%.
Full Text:
https://www.chargebackgurus.com/blog/how-to-reduce-credit-card-decline-rates
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
If you’re dealing with chargebacks on an ongoing, long-term basis, you may come to develop some opinions about the banks that get involved. Your primary relationship will be with your acquiring bank, the institution that provides you with your merchant account, but it’s likely you’ll find yourself at odds with some of the larger issuing banks on multiple occasions. With millions of customers across the United States, it’s likely that Bank of America will often be the issuers you’re having to contend with.
An institution the size of Bank of America can be an intimidating opponent, but ultimately, you’re both subject to the rules imposed by Visa and Mastercard, and even big banks have a vested interest in following the rules and doing the right (and legal) thing.
Are you learning how to use the Bank of America's platform to dispute chargebacks? Here's our Step by Step Walkthrough. Full Text:
https://www.chargebackgurus.com/blog/how-to-handle-bank-of-america-chargebacks
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
In the past decade, one of the biggest stories in entertainment and online media is the rise of streamers: people who broadcast live, streaming video of themselves playing video games or engaging in other watchable activities on platforms like YouTube and Twitch. Streamers can make money through endorsements, ad sales, and affiliate programs, but one of their biggest sources of income is direct donations from their fans and viewers. For many gamers and would-be digital media stars, getting paid to livestream yourself playing games sounds like a dream come true, but whenever digital payments are involved, chargebacks can be the bucket of cold water that brings the dream to an abrupt end. What can Twitch streamers do to protect themselves from the harsh reality of chargebacks?
There’s a lot of competition in the streaming world, and while only a select few approach the heights reached by the Fortnite streamer Ninja, who reportedly received over $20 million to join Microsoft’s Mixer platform, it’s not uncommon for dedicated, professional streamers to pull in thousands per month.
Make no mistake, they’re working hard to earn that money. Building and audience and keeping them coming back to your channel on a regular basis takes time, dedication, skill as a broadcast performer, and often a considerable investment in the hardware and software that makes streaming possible. Just like any other digital entrepreneur, streamers can suffer significant losses from chargebacks, missing out not only on the tips and donations that are getting clawed back, but racking up costly fees as well.
Full Text:
https://www.chargebackgurus.com/blog/twitch-chargebacks
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
When you’re trying to prevent credit card fraud, one of the key challenges is answering a deceptively simple question: how do you know that the cardholder is who they say they are? In a card-present transaction, you can make use of PINs, EMV chips, and government-issued identification verified by human eyes. Online, in the card-not-present world of ecommerce, it’s less easy. Security tools can interrupt transactions to interrogate the cardholder to prove their identity, but this is an inelegant and off-putting solution. While third party solutions have done much to tame the ecommerce landscape, sometimes it takes action from the major card networks to solve the biggest challenges. Could it be that Mastercard has found an answer to the problem of verifying digital identities?
Back in March, Mastercard presented a consumer-centered framework for establishing and managing digital identity in a paper titled Restoring Trust in a Digital World. Last month, they announced their plans to begin testing a pilot program for real world applications of their model for digital identity.
Full Text:
https://www.chargebackgurus.com/blog/mastercards-digital-identity-verification
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
Pre-arbitration is not a standard part of dealing with chargebacks, but rather a distinct procedure typically only applicable to Visa cards. Centered on a second chargeback or second reversal of a disputed transaction, pre-arbitration is a formal procedure to clarify whose claim has standing.
Pre-arbitration can be one of the most confusing steps in the chargeback process, not least because Visa is the only card network that uses this particular terminology.
Chargeback MeaningA chargeback is a transaction reversal process initiated when a consumer requests a forced-refund from their issuing bank.
Pre-arbitration refers to the part of the process when the issuer, or their customer, disputes the merchant’s representment and sends the case to the card network for a final decision in arbitration. Only Visa calls this “pre-arbitration” in their official documentation, but it’s common shorthand in the payments industry for the formal procedure to clarify whose claim has standing on the second reversal of a disputed transaction.
Full Text:
https://www.chargebackgurus.com/blog/understanding-the-chargeback-pre-arbitration-process
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
With every “please accept our cookies” overlay we have to click through, we are reminded of the changes the GDPR has made to the web. Now that 2020 is here, America’s first major attempt at internet privacy regulation is ready to roll out. As is often the case in matters of technology, California is in the vanguard here. The state’s California Consumer Protection Act was signed into law back in 2018, and on January 1 it went into effect. Many ecommerce merchants inside and outside of California are now wondering, what impact will this have on them and what do they need to do to avoid running afoul of the new law?
In theory, if you’re a Texas merchant and you block internet traffic from everyone but other Texans, you could get away with ignoring the CCPA—but as soon as you make your site accessible to web surfers from California, you’re subject to the CCPA’s rules.
While hyperlocal marketing may be trending, we don’t think there are many merchants out there willing to restrict their potential customer base that much. In practice, the CCPA is going to be a nationwide law.
Full Text:
https://www.chargebackgurus.com/blog/ccpa-understanding-californias-data-privacy-law
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
As if the loss of revenue from chargebacks wasn’t bad enough, every chargeback has the potential to bring along a host of subsidiary problems—bank fees, increases to your chargeback ratio, time and labor spent in representment, and more—but the most galling one to encounter can be the dreaded double refund chargeback. This is when both a chargeback and a merchant-initiated refund get processed for the same transaction, leaving you with twice the amount of lost revenue on top of the fees, product cost, and other losses. What can merchants do to prevent double refund chargebacks from occurring?
To prevent double refund chargebacks, it is necessary to understand how and why they occur. Obviously enough, they refer to situations in which one hand doesn’t know what the other is doing: either the merchant processes a refund unaware that a bank dispute is in progress, or the bank escalates a dispute to a chargeback before checking with the merchant to see if a refund has already been issued. It doesn’t matter whether the refund was initiated first, or the dispute—double refund chargebacks can occur either way.
Full Text:
https://www.chargebackgurus.com/blog/chargebacks-preventing-double-refunds
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Merchants, banks, and card networks may dominate discussions about chargebacks and other challenges within the payments industry, but we should never overlook the other players in this ecosystem who make instantaneous global ecommerce possible. Payment processing companies perform the essential work of authorizing and settling transactions for merchants, handling all of the lightning-fast checks and communications that allow you to enter in payment credentials and see the “approved” message pop up within a matter of seconds. This is vital work, but in today’s competitive environment, it sometimes goes unrecognized. How can payment processors set themselves apart from the pack and strengthen their relationships with the merchants they serve?
The reality for payment processors is that the competition is fierce and plentiful—there are over 10,000 payment processing companies operating within the United States alone. So much competition means that profit margins are razor-thin for most processors, since there’s always another company willing to undercut you by a few fractional cents.
Full Text:
https://www.chargebackgurus.com/blog/3-payment-processor-tips-better-merchant-relationships
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
What is a credit card chargeback?
Credit card chargebacks are initiated when you request a transaction reversal through your issuing bank. Because chargebacks can be detrimental to a business, it is very important you attempt to resolve any issues you may have with the merchant before requesting a reversal. Otherwise, you may be inadvertently committing illegal fraud.
As a merchant, you might feel like the chargeback process is weighted against you. It can seem as though, with just a single call to his or her bank, a customer can snatch back the money from a completely legitimate sale, leaving you with the burden of proof to gather and present evidence that you're entitled to keep the proceeds from that transaction.
Full Text:
https://www.chargebackgurus.com/blog/what-rights-do-merchants-have-in-credit-card-chargebacks
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
When it comes to chargebacks, the fewer there are, the better. Whether they're legitimate or not, too many chargebacks can result in a merchant losing their ability to process credit card payments or ending up on the MATCH list. Sometimes, a chargeback is initiated over an issue a merchant would have been happy to resolve, in the customer's favor, before getting the banks involved.
Fortunately, you can recover this opportunity by utilizing chargeback prevention alerts.
What are chargeback prevention alerts?
Chargeback alerts are guaranteed to reduce chargebacks. With chargeback alerts, you receive a notification each time the consumer initiates a dispute. Upon receipt, you will have an opportunity to resolve the dispute before it becomes a chargeback.
Full Text:
https://www.chargebackgurus.com/blog/a-merchants-guide-to-chargeback-alerts
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
It’s often said that giving gift cards is “impersonal,” but consumers have spoken, and it turns out that as both givers and recipients, we’re perfectly fine with impersonal. Consumers love the flexibility and convenience of gift cards, merchants love consumers who buy their gift cards. Unfortunately, gift cards are prime targets for scammers and fraudsters, and gift card fraud can leave merchants vulnerable to damaging chargebacks from the credit cards that were originally used to purchase them. How can merchants protect themselves—and their customers—against gift card fraud?
Gift card sales were around $160 billion in 2018, and eyebrow-raising figure that keeps growing every year. Despite the risks, it makes sense that merchants would want to offer gift cards—consumers want them, they increase sales, and they can be a good marketing tool. The important thing is to understand the ways in which fraudsters can exploit gift cards so that you can take precautions to minimize the risk and empower your consumers to keep their funds safe.
Full Text:
chargebackgurus.com/blog/gift-card-fraud
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Here we are in 2020, and the deadline for compliance with the revised Payment Services Directive (PSD2) has passed. To any American merchants thinking “deadline? What deadline?” right now, don’t panic—the PSD2 is a directive from the European Union that only applies to merchants with a presence within the greater European Economic Area. Whether you’re subject to it or not, the PSD2 is mandating big changes that are likely to have a ripple effect on ecommerce worldwide. Many players in the industry are starting to wonder: how well is the migration toward PSD2 compliance faring so far?
First, a refresher on what, precisely, the PSD2 entails. There’s a lot to unpack in a set of rules that covers as much as the PSD2 does, but two of its requirements have emerged as the most significant:
- Open Banking, which requires banks to make their payment initiation and account services accessible to third party service providers.
- Strong Customer Authentication, which mandates the use of two-factor authentication and other security requirements to protect consumers from fraud.
Full Text:
https://www.chargebackgurus.com/blog/psd2-migration-status-update
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
At the start of the 21st century, trend forecasters predicted that our homes would be full of desktop computers by now. Given how quickly we were all warming up to personal computing and internet technology, it was a reasonable expectation—but it failed to anticipate the rise of mobile devices. There’s no need to cover every available desktop surface with a computer when you’re walking around with a smartphone that can do whatever you need, but when it comes to cybersecurity most of us are still stuck in a PC computing mindset. As more and more shopping and payment processing is happening through phones and tablets, what can we do to promote a safe and fraud-free mobile payments environment?
The golden rule of fraud is that it follows the money. As consumers have warmed to mobile ecommerce, payment apps, e-wallets, and other technological conveniences, fraudsters have been right behind them, testing new systems for weaknesses and finding vulnerabilities in the hardware, software, and human behaviors that enable them.
Full Text:
https://www.chargebackgurus.com/blog/mobile-app-fraud-prevention-security-elements
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
While the chargeback process is largely defined and structured by the heavyweight card networks like Visa and Mastercard, the issuing and acquiring banks that get involved in transaction disputes have some leeway to set their own unique rules and procedures. The right representment for one issuer might not pass muster with the next bank you deal with because of some small detail related to timing or documentation. We hate to see merchants lose out on revenue due to avoidable mistakes, so we want to arm you with the information you need to deal with all the major issuers. With that said, what do merchants need to know about Wells Fargo chargebacks?
As the seventh largest credit card issuer in the United States, Wells Fargo handles a commensurately high rate of chargebacks, so you can expect to be dealing with them fairly often. Wells Fargo has lost some market share in recent years because of the fallout from their 2016 account fraud scandal, and while that means they have extra incentive to keep their current customers happy, we would hope that it also motivates them to carefully abide by the card networks’ dispute rules.
Full Text:
https://www.chargebackgurus.com/blog/wells-fargo-chargeback
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey
By default, merchants bear the financial liability for chargebacks. When a cardholder gets a charge reversed, the funds to make them whole again have to come from somewhere, and that somewhere is the merchant’s bank account. This can make it feel very frustrating when chargebacks seem to originate from cardholders who are reckless with their account security, or from issuing banks that don’t push back against the more dubious or outlandish claims of friendly fraudsters. Merchants are regularly monitored for fraud and excessive chargeback activity—it’s fair to ask, where is the oversight on the other end of the equation?
As of October 2019, Visa has expanded its scrutiny of issuing banks and their fraud rates. That means they’ll be taking a closer look at how many incidents of fraud and fraud-related chargebacks are coming from specific issuing banks, and enrolling banks that exceed their fraud threshold in the Visa Issuer Monitoring Program (VIMP) until they are able to reduce the number of fraudulent charges they’re authorizing.
Full Text:
https://www.chargebackgurus.com/blog/what-is-the-visa-issuer-monitoring-program-vimp
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Merchants, do you know about TC40 and SAFE? No, they aren’t the droids from the new Star Wars movie. They’re part of Visa and Mastercard’s credit card fraud monitoring programs, and while it’s quite possible that you haven’t had to deal with TC40 and SAFE data firsthand, you might be generating a lot of it without even knowing it. Knowing how and why this data is collected can give you insights into how fraudsters might be targeting your business. In this FAQ we’ll try to answer the most pressing questions merchants have about TC40 and SAFE, including the most important one: can they help you avoid chargebacks?
What is TC40 Data?
TC40 Data is a Visa record containing information regarding consumer fraud claims. While it does not prevent chargebacks or fraud, merchants may be able to glean valuable insights from these reports.
Full Text:
https://www.chargebackgurus.com/blog/faq-fraud-monitoring-with-tc40-and-safe
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
The life cycle of a chargeback can resemble a heist movie at times, with back and forth reversals of fortune right up to the very end. First the money goes back to the cardholder, then the merchant succeeds in representing the charge, but then the issuing bank takes it all the way to arbitration. First you have the money, then you don’t, and fees start getting tossed in at various points—it’s enough to make your head spin. Now, can you imagine what it’s like for your accounting team to try and make sense of all this activity at the end of the month?
Figuring out how to properly account for chargebacks may not carry the same urgency as figuring out how to fight and prevent them, but if you want to get an accurate handle on how chargebacks are impacting your bottom line, they need to be thoroughly and correctly recorded in your ledger.
Full Text:
https://www.chargebackgurus.com/blog/chargeback-accounting-how-to-get-it-right-and-why-it-matters
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Back in June, EMVCo published the specifications for Secure Remote Commerce, a digital toolset it developed to allow for the creation of secure, globally interoperable virtual payment terminals. While the general idea behind SRC is easy enough to grasp, many merchants still have lots of questions about where SRC should be implemented, how it works, and what actual benefits it will confer. Before throwing another branded payment platform up for your customers to figure out, it’s fair to ask: is this going to be worth it?
From our perspective here at Chargeback Gurus, the first thing we want to know is whether implementing a particular tool or platform is likely to have an effect on the number of disputes and chargebacks a merchant receives. The basic framework of SRC relieves merchants from having to store and protect customer payment credentials, and makes it more difficult for fraudsters to use stolen cards at SRC-enabled payment terminals. The downside of this is that a cyberattack on a SRC “vault” of stored card data is a very high-reward target for hackers, but the relationship between any given high-profile data breach and an individual merchant’s chargeback rate is tenuous at best.
Full Text:
https://www.chargebackgurus.com/blog/emv-src-explained
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Everybody loves the “free” part of a free trial offer. The “trial” part, on the other hand, often gets contentious. Subscription-based merchants who entice new customers with trial offers at discounted rates often get enthusiastic signups from curious customers who might balk at committing to a full-price subscription, but when automatic renewals kick in at the regular price many of those same customers forget what they signed up for and proceed directly to their bank to dispute the charge. To avoid this all-too-common scenario, Visa is introducing a new mandate regulating free subscriptions and promotional offers. What do subscription-based merchants need to know as we draw closer to the April 2020 compliance deadline?
What is Visa Subscription Mandate?
Visa Subscription Mandate is a Visa policy providing rules for enhanced merchant to consumer transaction disclosure, transparent consumer cancellation options, revised consumer dispute rights and merchant participation monitoring.
Full Text:
https://www.chargebackgurus.com/blog/visa-trial-and-subscription-mandate-explained
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Tracking down the root causes of chargebacks can lead you to strange places. Sometimes, the reason code or the cardholder’s stated explanation will point you to an obvious cause, but it’s often the case that the true source of the cardholder’s dissatisfaction is someplace you didn’t expect to find it. In fact, the root cause of a chargeback doesn’t always fall under your immediate sphere of control. Issues can spring up at any point in the supply chain, impacting the quality or function of your product and causing your end customers to feel cheated or misled.
In a retail business, whoever manages the supply chain—whether that’s the sole proprietor in a small business or a dedicated role in a larger organization—needs to be involved in the planning and execution of your chargeback defense strategies. Ideally, the supply chain manager should be monitoring chargebacks companywide, so that they can leverage their knowledge of the vendors and processes in your supply chain to connect the logical dots between supply chain issues and customer chargebacks.
Full Text:
https://www.chargebackgurus.com/blog/supply-chain-chargeback-management
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Savvy consumers have known for some time now to be aware of credit card skimmers, little electronic devices that fraudsters install in gas pumps and other inadequately-supervised credit card reading devices. When a customer places their card in the reader to make a payment, the skimmer copies their credit card information for the fraudster to retrieve later. Crack open any local newspaper and sooner or later you’re likely to find a warning from a law enforcement agency about skimmers spotted at a rural gas station or out-of-the-way ATM.
You might think that as an ecommerce merchant, skimmers are one fraud scheme you don’t have to worry about. Unfortunately, skimmers are going digital. Consumers who fall victim to this new “eskimmer” technology will surely file chargebacks against the unauthorized charges that fraudsters put on their cards, and merchants have no legitimate means to fight chargebacks based on true fraud.
Full Text:
https://www.chargebackgurus.com/blog/eskimmer-and-formjacking-protection
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Eddie Leonard
The odds are pretty good that the next credit card transaction your online store processes will be a Visa card. With over 335 million cards in circulation, accounting for more than half of all credit cards worldwide, Visa’s reach and influence cannot be overstated.
As one of the biggest players in the card payments industry, Visa does not hesitate to throw its weight around when it feels the need to change industry practices to better suit its interests. When Visa issues a new mandate, banks and merchants have no choice but to pay attention and follow the new rules. It may feel at times that all these card network mandates add up to is more work and worry for merchants, but sometimes these mandates include very beneficial features for merchants.
Full Text:
https://www.chargebackgurus.com/blog/vmpi-decoded-definitive-guide-to-visa-merchant-purchase-inquiry
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Chargebacks are the result of a consumer transaction reversal request. While the consumer is obligated to resolve the issue with the merchant before requesting such a reversal, this step in the process is often overlooked.
Chargebacks (originally meant to help consumers) are a growing concern for modern merchants. And at the rate they’re increasing, it’s no wonder why.
From 2016 to 2017, chargebacks jumped 179 percent, costing merchant’s 1.9 percent of their total annual revenue. Add in the potential threat chargebacks pose to your reputation and merchant accounts, and you’ve got a pretty serious problem on your hands—no matter what line of business you’re in.
Full Text:
https://www.chargebackgurus.com/blog/merchant-chargebacks-101-what-they-are-why-they-matter
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife
Dealing with chargebacks can take a heavy toll on a merchant. Fighting them takes time, research, and labor, and sometimes you still end up losing money to fraudulent or improper chargebacks.
The burden of proof is on merchants to demonstrate the problems with a wrongful chargeback. Even a completely passive approach is unworkable—get hit with too many chargebacks, and you risk having your merchant account suspended.
Every merchant needs some kind of strategy for preventing, fighting, and dealing with chargebacks. Some businesses may have the resources and wherewithal to handle it in-house, but for many merchants, that's just not feasible. That's where chargeback services come in to play.
Full Text:
https://www.chargebackgurus.com/blog/chargeback-services-how-to-identify-the-best-service-providers
©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife