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FRAUD PROTECTION
Fraud
caused an estimated $400 MILLION
in 2002 in charge back fees in 2002 alone.
Managing revenue & risk, credit
card and bank account fraud can lead to losses that can often be insurmountable
for mail order/telephone order (MOTO) merchants to recover from. When
consumers dispute charges or charge back for items purchased, merchants
are liable. In addition, merchants are responsible for bank chargeback
fees and other costs associated with bad transactions. In fact, merchants
with excessive chargebacks can even lose the right to accept credit cards
- a risk no merchant can afford to take.
- When communicating with your customers
at any time during the sales cycle, ensure that the information you
provide is as accurate and understandable as possible. Being upfront
with the information will allow you to fulfill the expectations of your
consumer, who understands what they are purchasing.
- If you are selling your product
by phone, it is always beneficial, especially in the long run, to have
another agent or supervisor reiterate the information relating to the
sale. This will allow for the verification of inclusions, warranty information,
return policies, and to meet all the legal requirements for processing
the payment over the phone.
- When advertising or providing information
on your product, your customer service hours should be included. In
addition, maintaining an adequate number of trained customer service
staff to answer inquiries will minimize chargebacks and disputes.
- When shipping goods, use traceable
shipping methods that require a signature by the recipient. This will
be helpful when addressing claims that the consumer did not receive
the merchandise.
- When providing customer service,
a toll-free number is obviously more attractive to consumers who want
to inquire about your product or service. This is even more applicable
when selling items of lower value. A customer who does not want to pay
for long distance charges may instead decide to dispute the charge.
- Posting or providing sales literature,
warranty information, and customer service contact information both
during and after the sale will provide customers an easy way to contact
you with questions or concerns. Not making this information readily
available may lead
to unnecessary chargebacks or disputes that could have been settled
easily.
- When selling hard goods, a 14-day
return policy is acceptable, however, for non-tangible goods or services,
including service or information packages, a liberal return policy will
allow consumers to receive, open, try, and test the product. This will
minimize returns of the product.
- When issuing credits for refunds,
issue the credits as soon as possible, and advise the consumer that
it may take up to 5 business days for the refund to appear on their
credit card statement or in their bank account.
- If and when you do get a chargeback,
we suggest that you call the customer to find out the reason. Typical
reasons that can be managed include billing the customer an incorrect
amount, goods not received as advertised, or poor customer assistance
when tracking the delivery. In many cases when a consumer's calls to
cancel a purchase go unanswered, they decide to charge back the amount,
and rarely return to purchase from the merchant again.
- When selling and fulfilling your
product, ensure that your refund policy is clear. We recommend that
your policy include the time allowable to return your product, and the
procedure to follow. Your customer service agents should be well aware
of your refund policies. Although there are some techniques to avoid
losing a sale, the customer must be given the right to return the product
without dispute.
- When shipping merchandise, make
sure you are sending the item to the mailing address associated to the
consumer's credit card. If sending goods to a shipping address that
is different from the mailing address associated to the consumer's credit
card, we suggest that you call the consumer and have them fax a copy
of at least one bill from the address, or a copy of the driver's license
of someone who lives at the address that was provided. We never recommend
shipping to PO
boxes.
- For credit card purchases, and
to further protect against processing a transaction paid for by a stolen
credit card, take the consumer's credit card CVV value on all orders.
The CVV value is the 3- or 4-digit number found on the back of a credit
card, and is an additional security method used for card-not-present
transactions.
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