Beware of Fraud!

I just wanted to share (and maybe vent a little) about a growing trend with online stores. I have had three charge backs in the last three weeks. This is when the card holder is saying that they did not make the purchase and filed a claim with their credit card companies. I use PayPal as my merchant service provider and their policy is to hold these funds until the issue has been resolved - which can take 75 days! So, I was out almost $1000 in charges.

PayPal sent me an email each time asking for specific information to help with the dispute - which I sent. Each purchase was different dates, a different credit card, different gifts and shipping addresses. I just received an email that one has cleared (after two weeks), two are still pending.

After reviewing these orders, I found a pattern and wanted to share to try and help others in avoiding these charge backs. This is what I found:

• The phone number provided was a fax number or not valid
  
• The order usually involves more than one gift (one had 5)
• The gifts are always my most expensive ones
• They always use Next Day Air or Saturday Delivery (one had $250 just for shipping)
• The Gift Card message is simple like : Thank You, Happy Easter, etc... no names
• One shipping address was a UPS store, the other two were actual addresses

This is what I do to avoid any more issues....

Security!
I already have this set up on my site and noticed that it has prevented some thieves from using my store:

• The EXACT name of the card (including initials)
• The ENTIRE billing address needs to match
• The CVV security is enabled (this is the 3 digit code in back of Visa, MC, or Discover and the 4 digit code for AMEX)
• Phone Number is required
  
• Email is required
  

Some customers will not like providing phone number or email addresses. I add a little note during checkout to insure that their information will not be shared. I state that the phone number is required by UPS (which is true) and the email is so that we can send their tracking information (which is also true)

Now, for a little extra security - with all this information I have, if the order seems "shady", I can do a little investigating to make sure. I use anywho.com to check the number. If I can't find it, I call the number - if they answer, I make an excuse as to why I called. I also verify that the address is not a UPS store. I also look up the address in google maps and use the satelite view - this helps to see the exact location. If either of these are bad - I email the customer and ask for either a valid phone number, or a new address because we cannot ship to UPS stores. If they are thieves, they will not answer my email and I just cancel the order and credit the card.

I assume that the reason they choose the fastest delivery service is to get it to the destination as soon as possible before the credit card owner sees the transaction on their card. I get the UPS store, but I'm not sure how they are getting away with sending it to valid addresses. I saw a report on dateline once where scammers find unsuspecting people on dating websites and ask if they can have stuff shipped to their home.

In any case, these last few weeks have been an eye opener. The higher my Gift Basket Delivery site is ranked in all search engines (which is great) the more fraudulent purchases I'm going to get (which is bad).

Hopefully this vent-a-blog will help you to avoid having to deal with charge backs :)