How to Prevent Chargeback Fraud in Your eCommerce Business


prevent chargeback fraud

Despite the fact that ecommerce chargebacks are a necessary part of the payment processing ecosystem, they can be costly to merchants. They can eat into profits and damage reputations.

Preventing chargeback fraud is a vital step for eCommerce businesses to avoid losing revenue and money. However, the process can be difficult and time-consuming to manage.

The most common type of chargeback fraud is criminal credit card fraud, which happens when a stolen credit card or card number is used to make an unauthorized purchase. It is a growing problem, and there are several ways to prevent it from happening in your business.

Friendly fraud is another major type of chargeback fraud that affects eCommerce companies. It occurs when a customer purposefully submits a chargeback dispute in an effort to get free goods from a business.

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Requiring signature confirmation on shipments, using shipment tracking and ensuring that every product or service has accurate, detailed descriptions can help prevent friendly fraud disputes from occurring. These simple steps can significantly lower the risk of a chargeback reversal, particularly if the fraudster is able to provide evidence that the package was not delivered or received.

Fraudsters often use forged delivery information in their disputes, so requiring signature confirmation can help deter these claims. It’s also important to communicate clearly at each step of the order journey–from the moment an order is placed to when it ships and arrives at a customer’s door.

The best way to fight chargeback fraud is to establish a solid strategy that includes tactics such as those listed above. These strategies are easy to implement and can reduce chargebacks from occurring in your business.

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