Online Retailers - Tips to Help You Avoid Credit Card Fraud

Credit card chargebacks occur for several reasons. However, chargebacks due to fraudulent purchases are a concern of all online retailers. Chargebacks are extremely expensive, as retailers end up losing:

• The monies paid for the goods
• The goods themselves, if they are shipped prior to the chargeback
• Additional fees charged by the credit card processor – up to $100

Here are a few tips to help minimize your chargebacks:

• Be a little cautious of first-time online customers - criminals are always looking for new victims.
• Watch for larger than usual order sizes - because stolen cards or account numbers have a limited life span, crooks need to maximize the sizes of their purchases.
• Look for orders that include several of the same item - having multiples of the same item increases a criminal’s profits.
• Beware of orders made up of “big-ticket” items - these items have maximum resale value and therefore maximum profit potential for criminals.
• Be careful of rush or overnight shipping - crooks want these fraudulently obtained items as soon as possible for the quickest possible resale, and aren’t concerned about extra delivery charges.
• Double check when shipping to an international address - a significant number of fraudulent transactions are shipped to fraudulent cardholders outside the US.
• Watch for transactions with similar account numbers - particularly useful if the account numbers used have been generated using software available on the internet.
• Avoid orders that are shipping to a single address, but transactions placed on multiple cards. – these could involve an account number generated using special software, or even a batch of stolen cards.
• Beware of multiple transactions on one card over a very short period of time – these could be an attempt to “run a card” until the account is closed.
• Watch for multiple transactions on one card or a similar card with a single billing address but multiple shipping addresses – these could represent organized activity, rather than one individual at work.
• Watch for online transactions; multiple cards used from a single IP (Internet Protocol) address - more than one or two cards could definitely indicate a fraud scheme.
• Be aware of orders from internet addresses that make use of free email services (gMail, Yahoo Hotmail) - these email services involve no billing relationships and often neither an audit trail nor verification that a legitimate cardholder opened the account

Always utilize the fraud prevention and protection parameters offered through your credit card processor, such as location, volume and transaction limitations. Additionally, prior to shipping items use an address verification – you can always call to confirm the order.

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