Knowing the inherent risks of the virtual store is one of the first steps to avoid possible harm. In this context, it is important to understand what what is chargeback and learn how to protect yourself from the refund mechanism, the consequences of which can jeopardize the future of the e-commerce site.
Understand what chargeback is
According to e-commerce specialist Mark Reynolds of Digital Commerce Partners, a chargeback occurs when the bank responsible for a customer’s credit card is responsible request a refund for a fraudulent transaction. In addition to returning the total value of the sale, the bank charges an e-commerce site fee. “Most banks require a repayment installment of 1% of value of transactions. A criminal who finds a vulnerability on your website can do significant damage over time,” explains Reynolds.
Introduced to protect the consumer, the chargeback can be due to the following reasons:
In this case, the consumer claims to have received the product different functions to which they were offered. It may be a conflicting technical specification or a manufacturing defect.
In case of problems with shipping and product is lostthe customer has the right to request a refund of the value paid from the credit card operator.
If the customer’s personal information has been stolen or the Credit card cloned, the criminal can conduct transactions improperly. In this case, the consumer demands reimbursement of the value.
There is a risk that the client will act in bad faith by not seen a legitimate transaction. In all cases, the person who causes the damage is the owner of the e-commerce site, unless he/she can prove that the reasons claimed by the customer are wrong.
Avoiding the chargeback is the responsibility of the virtual store
In general, credit card operators are not liable for fraudulent transactions, verification of the consumer’s identity or prevent fraud fall on the e-commerce site. The network is liable for the damage.
Because credit cards represent one significant part Of all the transactions made online, non-use can be a strong impediment to the growth of the business due to the risk of chargeback.
To avoid damage, Reynolds recommends Optimize fraud filters already offered by most payment gateways. “Repeated fraud by the same criminal can be prevented by implementing a shopping cart restriction tool linked to the product shipping address,” he explains. So if the address provided is already associated with previous issues, the transaction will not be accepted.
Finally, the specialist defends that guarantees are required before approving the transaction. This means control manually Orders, origin analysis of e-mail addresses, telephone numbers and delivery dates.