Ever since the dawn of the internet people have been trying to find a way to take advantage of the level of anonymity that it offers. One way that arose from this anonymity is the increase in chargeback fraud. Chargeback fraud is when people order things with their credit card once the product arrives they ask their credit card provider to do a chargeback. This cancels the order and gives them a refund. In this situation the burden of cost always falls on the seller of the product.
It’s not just the cost of the product that the seller has to deal with though. The cost of delivery has to be absorbed. The admin costs have to be absorbed. All of this adds up to businesses losing $2.40 for every $1 in product value. The worst thing about it all is that it isn’t going away, chargeback fraud is growing by 41% every year! This is mainly due to how easy it is to commit chargeback fraud, the easier the crime the more people are willing to do it.
Combatting the Epidemic
All hope isn’t lost for sellers however, there are ways to prove that each customer is who they say they are. Almost all of these methods, like the Jumio Net Verify system, involve verifying who the customer is when they order something. It’s a simple concept in essence, if you can verify that the customer is the owner of the card then when they attempt to ask the credit card provider to do a chargeback they will have verifiable proof that chargeback fraud has taken place.
With the advent of smartphones it becomes a lot easier to verify that the user is who they say they are because almost all smartphones come equipped with a front facing camera. While this was originally to allow video calls it didn’t take long to be used as a verification method to unlock the smartphone itself. If you have an online shop to sell your goods or if you use credit cards in any way then you need to take measures to ensure that you are not a victim of chargeback fraud. A photo verification application doesn’t just put people off from committing chargeback fraud but it also gives you proof that you were the victim.
Running a business is a difficult task at the best of times, even more so if you are a new start up. That is why you need to take as many precautions as possible to protect yourself from the possibility of fraud. It’s not just online shops that can be the victim of chargeback fraud, anyone who takes credit cards can be taken advantage of. That’s why you should ensure that you have high quality verification software to not just put off any would be criminals, but to also protect yourself and prove that you were the victim. Make yourself fraud proof and make sure you have procedures in place to verify identity for every card transaction you make.