(PRWEB) April 25, 2006 -- Chargeback is nothing but reversal of credit card transaction. Reversal means as a seller you have to pay back the money involved with your ordered product along with additional cost. This is because credit card thieves enter stolen credit card information (often stolen or hacked) when ordering your product. The real card holder had not ordered any product/service will dispute the charge to his bank which causes reversal of transaction. These deadly chargebacks
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* Can pose a significant threat to your reputation as seller.
* Can also shut down your internet business.
Let us see what happened with John ...
John owns an online store, which he sells e-books. He felt very happy, when his product was ordered by 5 customers online in a single day each of $200, total amounting to $1000 in a single day. Days passed by and after 40 days, John received email from his third-party credit card processor saying that he received 3 chargebacks and considering previous business records, his merchant account was suspended and his business was put on Visa/Mastercard terminated merchants list.
“ To empty the money in the credit card ”
The losses are ...
1. Original fee: $200 x 3 = $600
2. Transaction fee : 5% of $200) x 3 = $303.
3. Chargeback Penalty fee: $25 x 3 = $75
TOTAL: $705
Now this $705, John has to be pay back. If this is the case with tangible product already shipped to crook, then he has to forget the shipped goods plus he had to pay all those money back.
The WORST of all....
1. Because his merchant account was suspended, John can no longer will be able to process credit cards.
2. John’s remaining account balance will be blocked and he will be paid only after 180 days (6 months) of time.
3. John's business was put on VISA/MASTERCARD TERMINATED MERCHANTS MATCH FILE (TMF/MATCH), which means he wont be able to apply for any other merchant account, at least for several years. See the nightmare!
Here are the signs you have to watch out for the fraud involved..
1. A customer ordering large number of products at a single go. Crooks with stolen credit cards will always have one thing in their mind : "To empty the money in the credit card". They are unaware the amount of money in their stolen card.
2. The shipping address will be different from the credit card address. Most often crooks want the goods delivered to some other anonymous country addresses that are other than card holders address. This is a VERY high risk.
3. Repeated failure of card authorization. Since these crooks don’t know the exact credit card holders name and billing address, they will repeatedly try various kinds of combinations to bypass the fraud screening system.
4. Never trust orders with free email addresses from YAHOO, HOTMAIL etc. These free email addresses are UNTRACEABLE and these crooks want to hide using them.
5. The IP Address of the order don’t match credit card holders country. Say if somebody orders your goods from Indonesia using Credit card address listed as U.S.A then this is definite fraud case.
6. Refrain taking orders under developed countries: Avoid taking orders from under-developed or developing countries like Afghanistan, Bulgaria, Cameroon Egypt Indonesia Iran Israel Lithuania Malaysia Morocco Nigeria Pakistan Romania Russia Turkey Vietnam Yugoslavia Ukraine Serbia Vietnam Philippines etc.
