And, an excessive history of chargebacks may result in the disastrous consequence of losing your merchant account and your ability to accept credit cards.

So, it’s obviously important to take prudent steps to minimize the occurrences of chargebacks – especially if your transaction volume is high.

The disputes are usually based on a customer’s claim that he did not receive the product or service that he ordered from you; that what he did receive was somehow defective or not what he ordered; or that he did not in fact order anything at all from you.

The causes for such claims generally result from:
• Fraud . Someone other than the authorized cardholder used his card or the information associated with card. Claims for fraudulent use of a cardholder’s card are especially common with internet and other ‘card not present’ transactions. Many billions of dollars of online transactions are the result of fraud annually.
• Customer Error . Again, this type of error is increasingly common for internet transactions, where the customer may not recall whether or not he purchased your product or service – especially if your website’s name and the name he sees on his credit card statement don’t match.
• Your Error . Your system for managing and tracking transactions – or your bookkeeping may be at fault.
• Bank Error . Banks do make mistakes – an unusually high number of them in fact – and you should keep a close watch on your merchant statements to minimize bank error.
With that in mind, here are 27 specific things you can do to reduce chargebacks against your merchant account .
1. The Address Verification System (AVS, for short) compares the customer’s stated billing address with the address the credit card company has on file. If your ‘customer’ has stolen the credit card, he probably won’t know the right billing address, so AVS is very useful in detecting fraudulent orders. Failure to use AVS will also result in higher discount rates on your transactions.
2. Be careful with orders from developing countries (e.g. former Eastern block countries), which have a higher than average rate of chargeback claims.
3. When processing in person, make sure that, if for some reason the swipe terminal isn’t working or the credit card cannot be read, the card information is keyed in and that you make an imprint onto the sales receipt. In order to avoid a possible chargeback later, both the card’s account number and its expiry date must show up on the receipt.
4. A common cause of customers’ disputes for online sales is that they don’t recognize the description of your company that appears on their monthly credit card statement. So make sure that description reflects your website’s name – and include a toll-free number in their statement’s description, so they can phone you if they have a problem.
5. For websites, make sure you provide a toll free phone number for customers to call, so they can hopefully resolve problems prior to instituting a dispute via the card company. And have a ‘frequently asked questions’ section on your site to further clarify issues that might otherwise lead to a complaint.
6. Be careful when accepting online orders if the customer uses a free email service – for if the card was stolen, his identity may be next to impossible to identify later. To be safe, you could ask him to confirm the sale by phone or fax.
7. Set up your shipping process so that the customer’s signature is always collected when the product is delivered – and have the shipper forward you a copy of the signed acknowledgement or upon request.
8. A recent development in fraud control is the IVR terminal (www.voicestamps.com) which can record a customer’s voice. If he later claims he didn’t order your product or service, the voice verification is e-mailed to you so you can prove he did in fact make the order.
9. If you manually process transactions, but don’t do so promptly, you may be hit with a chargeback for late presentment.
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order’s billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process a high dollar volume of transactions you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or “scrubbing” the data against lists of previously identified fraudsters).
14. For manual processing and voice authorizations, always note the authorization number on the sales receipt.
15. If you are a retailer, you should always check the expiry date of the credit card, confirm that the card is signed and that the signature thereon matches that on your sales receipt. If there is not a match, require photo ID.
16. Implement a management system to flag suspicious transactions. Have a “to be checked” file and have your staff contact customers whose orders are flagged by the system. Reasons for flagging can include many of the items mentioned above, such as free email addresses; high dollar orders; international shipping addresses, etc.
17. For internet and phone/mail orders, if the purchaser is a new customer and the sales price is high, require a faxed copy of his credit card and his driver’s license.
18. If you are selling over the Internet, place a warning on your transaction webpage stating that your site employs safeguards against fraud.
19. Be on the lookout for unusual ordering activity – including multiple orders of the same product, ‘rush’ orders, and the same cardholder making multiple orders within a very short time span.
20. Ensure that all the magnetic stripe or chip information required by the card processing company is actually being recorded. Also, compare the card’s account number with the number printed out on the receipt. And check that the signature on the receipt matches that on the reverse side of the card.
21. Always get an authorization from the processing company. If your request for an authorization is denied, do not complete the transaction.
22. When you are concerned about the veracity of a cardholder’s information, ask him for the phone number he supplied to his card company – and then call the company to verify it and call him as well, to ensure he is actually the cardholder and that he placed the order in question. You can also ask him to fax you a copy of his signature as well as the front and back of his credit card.
23. Shipping addresses containing only a P.O. Box are much higher risk than actual physical addresses.
24. For internet sales, always require the card’s verification number (CVC2 and CVV2), which is the 3 digit number on the credit card’s back side. According to Visa itself, this measure alone reduces chargebacks by over 25%.
25. Whenever a claim for a refund is made, and it has any merit – give the customer the refund. Doing so can significantly reduce chargebacks.
26. Disputes will happen, and when they do you will require all the appropriate documentation to support you – so make sure you store the documentation in a safe place and in an orderly fashion.
27. When a customer disputes a transaction you will receive an enquiry letter. Always respond to it within the stipulated time period. Your copies of face-to-face transactions must legibly display the card’s account number, the date of the transaction and its amount, the card expiration date, your company’s name and address, and the signature of your customer.
We also suggest you review the rules and suggestions for limiting chargebacks supplied by each of Visa, MasterCard, American Express, etc . These not only give you guidelines for preventing chargebacks, but will also detail the documentation and steps involved when disputes do arise – as they invariably will.

Authorization
Reduced check losses
Analytic driven decisions
Easy integration
Maximized sales

Settlement
Labor efficiency
Bank fee reduction
Improved operations
Speedier funds access

Collections
Minimized labor expense
Improved customer experience
Increased revenue
Compliance assistance

By converting to electronic check acceptance, you can:
Reduce bank fees
Reduce labor costs
Improve funds availability
Streamline reconciliation of depository accounts
Make depository bank pricing more transparent
Eliminate the risk of stolen, lost or damaged check deposits

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So we are offering any business owner the chance to fax in their statement and we will do a complete statement analysis for free. This will explain to them exactly what they are paying and how they can work towards getting the best rates and fees available to them. Many merchants don’t think they can get better rates but that is not true. All processors pay the same interchange charges and it is up to them as to what they charge their merchants. So your rates can be negotiated and we want to help you so feel free to contact us for more information regarding your statement.

Dubai, May 23, 2007 – First Data International, a global leader in electronic commerce and payment services, today announced a major new card processing contract with Samba Financial Group, and the successful conversion of Samba’s portfolio to First Data’s issuing platform.

Samba Financial Group is the leading bank in Saudi Arabia and the country’s largest credit card issuer. Under the five year contract, First Data is handling electronic processing for Samba’s credit card portfolio. In addition, First Data is providing the bank with risk management, fraud and behavioural scoring tools, helping to ensure card portfolio growth and profitability.

First Data is committed to the region, with a strong track record of delivering processing services to banks in the Middle East. First Data’s processing platform not only meets its client’s current local needs, but it also offers the flexibility to support their future growth.

George Zafirakis, vice president, with responsibility for First Data’s operations in the Middle East, commented: “This is a significant win for First Data, extending our market presence in Saudi Arabia and across the region, which we first entered over 12 years ago. We are delighted that Samba is taking advantage of the adaptability and functionality of our VisionPLUS platform, which is a cornerstone of our strategy to deliver processing services across the Middle East, Europe and Africa.”

About First Data International

First Data International, part of First Data Corp. (NYSE: FDC), is a leading provider of electronic commerce and payment solutions for businesses worldwide. First Data International serves a diverse range of markets, leveraging global scale through a local presence and maintaining focus on individual client needs. The company has approximately 7,900 employees and operates across Europe, Middle East and Africa, Latin America, Canada, Australia and Asia-Pacific.

Serving over 5 million merchant locations, 1,900 card issuers and their customers, First Data powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. The company’s portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions. The company’s STAR Network offers PIN-secured debit acceptance at 2 million ATM and retail locations. For more information, visit www.first-data.com.

“We have seen a recent spike in requests from restaurants who want
merchant accounts with wireless technology that will support credit
card processing at the table…” – Says Doug Olsen of Cardservice International

“…It turns out that restaurants are the most likely place to get your identity stolen and become the victim of credit card fraud. Customers are demanding that their credit cards never leave their view when they dine out. This high demand and recent media attention has caused our phones to ring off the hook. Restaurants want to convert their old credit card terminals into new secure wireless credit card terminals that can be used at the table.

Many of our restaurant merchant account holders have told us that even their non-concerned patrons appreciate the change. These patrons have commented on the restaurant’s pro-active approach and have even been telling their friends that your identity won’t get stolen when you visit their restaurant. The customers really appreciate it and since we introduced our special wireless merchant accounts for resteraunts, our business has tripled.”

Also, in a recent story By SCOTT MAYEROWITZ of ABC News we learned that 40 percent of all credit card theft occurs at dining locations – 97 more than at any other type of merchant.

He also said that Gourmands are not being ripped off by waiters or busboys who quickly copy down their information, although that can happen. The problem is a bit more high tech than that.

Most of the theft actually occurs when hackers break into a restaurant’s computer system and download the credit card information.

Visa is now starting to crack down on restaurants and other merchants that aren’t properly storing credit card data.

Jennifer Fischer, a director in Visa’s payment systems risk and compliance department, said the company was not sure why restaurants were more of a target than other businesses.

We have been asking every single restaurant who calls and and we have our theories. Read the rest of the story at: Restaurant Identity Theft Prevention