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How can I reduce the risk of fraud chargebacks?

There’s no sure fire way to rule out the chance of chargeback requests from customers but there are a few things you can do to reduce the risk of having chargebacks made against your business:

  1. When you are accepting payments with the card physically present, you should review the receipt and before handing over the goods to the Cardholder, check that it has been taken as a Card Present Transaction. If the receipt says ‘Keyed’, void the transaction and ask the Customer to process again using Chip and Pin. If for any reason they are unable/unwilling to do so, you could ask for an alternative payment method.
  2. It’s important that you’re careful when you’re taking orders and accepting payments over the phone or by mail. You should always input the customer's address, and the CVC code, so that the Address Verification Service can be performed - this will provide further comfort that additional details have been verified, but does not 100% confirm that the customer is genuine. You can also consider asking for a form of identification upon delivery of the goods.

If you have any suspicions during the transaction, it’s a good idea to do some further checks before you continue. There are a number of things you can look out for when you’re taking payments from customers that indicate a suspicious transaction:

  • If they’re not sure of their address details
  • If they claim they’ve forgotten some details
  • If they use multiple cards after one has been declined
  • If they’re making an unusually high amount of transactions
  • If they’re buying unusually large quantities
  • If they’re buying a high amount of identical items
  • If they give you the right billing address, but then ask for their order to be sent to a different address
  • If the customer pays via telephone, but needs to arrange for collection by themselves or a third party
  • If the customer appears desperate to receive/collect items quickly. This could indicate that the card being used does not belong to them

  1. If you’re accepting payments through your website or using payment links, you should ensure you’re using 3D Secure authentication. If a card issuer confirms that a card is enrolled in 3D Secure and the cardholder authentication is successful, then the liability for that transaction shifts to the card issuer (I.e. the bank).
  2. Sometimes, customers are not able to recognise the name of the merchant when they get their card statement. This usually happens when the trade name is different from the legal name the business is registered under. You could upload your logos and some basic business information to a secure Mastercard central database. This archive will then be used to drop company logos onto customer statements, so they can see at a glance who they have been shopping with. You can find more information here.

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