Chargebacks Are Evolving, and It’s Not Getting Better for Online Retailers

Businessweek recently ran the article It’s Easier Than Ever to Dispute a Credit Card Charge, and Retailers Hate It. There were a few particularly interesting nuggets that confirmed some of the things that we’ve suspected were happening: [T]echnology, along with a change in rules by payment networks such as those run by Visa Inc. and Mastercard Inc., is making that system a bigger headache for merchants, who are often left to eat the cost. Besides automating claims, banks have updated their mobile apps so users… Continue reading


Improving Fraud Management With Our Chargeback System

My previous chargeback posts are some of the most viewed and commented on my blog, and for good reason: merchants often get the short end of the stick when it comes to chargebacks. In the middle of last year it became clear that we finally needed to implement some sort of semi-automated fraud detection system, but not for the reason you might suspect. Chargebacks weren’t up, but our order volume was, and that meant that the time we spent investigating orders for potential fraud was… Continue reading


A New Chargeback Fraud Scheme

Scammers are creative, you have to give them that I suppose. Recently we’ve started seeing a new chargeback fraud technique. Here’s how it works: A thief possesses a stolen credit card and also knows the billing address of the owner of the credit card. They purchase a large e-gift certificate, using the billing and shipping address of the actual owner of the card. They then use the gift certificate to place several smaller orders under a variety of aliases. After they receive their orders, they then file… Continue reading


PayPal’s Simple Solution to Reducing Disputes (Chargebacks)

Chargebacks are always a hot topic for online retailers. A few weeks ago I was editing some PayPal settings when I noticed something called a “Customer service message” where you can “Create a personalized message for customer disputes.” That caught my eye, so I clicked it. On the page it’s described as: Customize the message online customers see when they try to file a dispute in the Resolution Center. People who will get this message have: Bought an item from you online, but said it… Continue reading


Where have all the Chargebacks gone?

Two of the most commented posts I’ve written were my posts on chargebacks. It’s a fascinating discussion because it’s a problem that all retailers have, and it’s a problem that most consumers either don’t know about or don’t care about. Retailers are on their own with this one. A few years ago it looked like it was going to be a major problem for us…until it wasn’t. Despite our volume more than tripling since my first chargeback post, we’ve seen chargebacks reduced to almost zero…. Continue reading


Chargeback Fraud – Customer Caught Red Handed (Finally!)

Without a doubt the most popular post I’ve written was last years post about chargebacks. Like most retailers, we feel pretty helpless when it comes to chargebacks, and I think that resonates with people.  Since the system at it’s core is very broken, retailers don’t have a whole lot of options.  Any system you put in place to reduce chargeback fraud invariably creates issues for legit customers. Creating new problems for all customers when a very small few are causing the issues, without guaranteeing any… Continue reading


Chargebacks: how we were taken for $6k and how we’re fighting back

This post has been a long time coming, but it’s one that I finally made sure I sat down and wrote because I’m sure it can save someone from getting scammed the way that we did. What is a chargeback? According to our good friend Wikipedia: A chargeback is the return of funds to a consumer, forcibly initiated by the consumer’s issuing bank. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer’s bank account or line of credit. The… Continue reading