Chargebacks and friendly fraud know no season.
They happen year-round and are a perpetual issue for e-commerce merchants. But come the holidays, they increase significantly.
For e-commerce merchants, this is the time to fight back. Merchants who can identify the signs of friendly fraud and curb chargebacks over the holidays can set the tone for the rest of the year.
Additionally, knowing these warning signs will also reduce instances of false declines, said to be a growing problem this season.
5 Signs a Transaction Could Be Friendly Fraud
You’ve got a business to run. You don’t have time to study every transaction — no small business merchant does, retail or e-commerce. But identifying the red flags of friendly fraud can keep your business under Visa’s 1 percent/100 chargebacks-per-month threshold.
- Mismatch between shipping and billing address: Millions of consumers shop online and ship gifts to friends and relatives in different locales. Our stance is that these transactions are worthwhile for merchants to examine.
- Bulk transactions made in a very small period: Such a situation echoes of the use of a stolen card. Credit card issuers are very savvy in identifying irregularities in credit card use, which results in small windows of opportunity for fraudsters and identity thieves to capitalize.
- Lots of purchases with different cards — shipped to the same address: This is also a major red flag and a sign that a fraudster is on a spending spree.
- Excessive purchases with one card: Similar to our bulk transactions sign above, credit card thieves are on the clock, trying to pounce at the expense of someone else.
- Purchases attempted with an expired card: This scheme signals a fraudster is attempting to bait-and-switch the merchant, who obviously should decline the transaction. Chances are the fraudster will return, prompting the merchant to make note of the shipping address in the original transaction attempt.
Visit Instabill.org: Your Free Online Chargeback Guide
Instabill can answer all of your questions on chargeback prevention, mitigation and even reversal with a simple phone call to 1-800-318-2713.