How to Reduce Chargebacks in Your Business

If your company operates with mail orders or telephone orders or even e-commerce it is vital that you are aware if how to protect your company from fraudulent transactions and chargebacks.  Due to the nature of your business being MO/TO, this tends to be the type of business that attracts the most fraudulent transactions and so you must follow all the protocols you can to help protect your business against fraudsters.

The problem is what can merchants do to protect the security of their online sales? One suggestions is insisting that customers use the CVV number; a security feature on credit cards that is a three or four digit number found on the back of the card. the system will ensure the CVV code put in by the purchaser matches the credit card code. If it matches your purchase is processed, if it doesn't match the purchase is not put through. This system isn't without problems, if a credit card has been stolen the thieve will easily find the CVV number and can make a purchase with your card. It is an added security measure but not the only thing you should do.

The next step for a secure online transaction is to use the AVS (address verification service) feature banks provide free of cost. This feature requires that the billing address for the shipment match  the mailing address on file at the customer's bank. This is great and really cuts down on fraudulent activities, especially with so many credit card numbers being stolen from one country and used in a second country. That being said, it is not one hundred percent either. Some fraudsters can find mailing addresses and figure out how to make the transaction work.

For the best security you should include a sign-on-delivery with ID verification. This is something shipping companies offer and will ensure the person ordering is the valid owner of the credit card.

It is important that if you have a business that isn't face-to-face that you follow the proper procedure to prevent chargebacks.  Chargebacks can be costly and if you get too many you find your merchant account terminated.  Jut by simply following the tips laid out in this article can save you from potential fraud.