How To Reduce Chargebacks
Unfortunately, when credit cards are accepted as payment, there is a risk of chargebacks due to claims of fraud or non-delivery of products. There are some simple ways to limit risk that have worked effectively for Online Order merchants already.
Request ID Upon Pickup or Delivery
Credit card fraudster generally dislike being caught in-person. You can deter fraudster by using the Ordespoon Announcement feature. This announcement can be presented as a pop up every time a customer accesses the your Orderspoon menu. Customers can be advised prior to ordering that the credit card used and a valid ID will be required at the time of pickup or delivery.
Sign Order Receipt
If you are concerned about chargebacks due to non-delivery claims, you can print an extra receipt and have your customer sign the receipt upon delivery as an indication of receipt.
Digital Authentication
Card networks have offered a digital authentication solution called 3D Secure since 2010. It has been used in hi-risk situations like airline tickets and high-value products that are shipped. While it has reduced fraud, it also requires a high fixed cost to implement and reduces the percentage of customers who can complete a credit card purchase. As such, it is not recommended in low value, high frequency credit card purchases. The usage of 3D is non-mandatory for the customers. Most customers committing friendly fraud are not likely to part participants in the 3D secure programs.
We use SSL and RSA encryption to secure the customer credit card number. Card transactions are verified with CVV and ZIP code validation so that the best available online credit card verification is utilized. ZIP code validation is done by an Address Verification System (AVS) that has been implemented recently as another layer of security. Once a purchase is being made, the ZIP code and the transaction information are processed at the same time. If the ZIP code does not match with the ZIP code the card-issuing bank has on file, the merchant can take action to decline the transaction from his/her Clover account.
Fraud Risk Scoring Engines
Merchants who ship high value goods often use fraud risk scoring tools to determine when to utilize extra authentication. While these measures can be effective, it comes with a per transaction cost of $0.10 per use. For an average order amount of less than $50, it is typically not cost effective. In a situation where products are delivered in-person and the fraudster can be caught in-person the need for these types of anti-fraud controls are even lower.
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