Chargeback Query
Discussion
Evening,
Just been notified by our Shopify site that a repeat customer has filed fraudulent use chargebacks against all of the previous orders they have made.
Total is about £1000 retail, and while that might not sound like a lot, it makes a difference.
As I understand the process, the money is immediately taken from us, we then have to submit evidence that we took all reasonable steps to prevent the fraud, and then the card company make a decision, which from what I have read, is almost certainly to refund the customer.
We have the Shopify logs, as well as proof of delivery/signatures etc. anyone have any experience of dealing with this?
I guess this is something we are going to have to suck up and learn from, but any suggestions of where to report this to would be a great help.
I feel bad if someone has had their details stolen and used, but is is friendly fraud, it will be a bitter pill to swallow.
Just been notified by our Shopify site that a repeat customer has filed fraudulent use chargebacks against all of the previous orders they have made.
Total is about £1000 retail, and while that might not sound like a lot, it makes a difference.
As I understand the process, the money is immediately taken from us, we then have to submit evidence that we took all reasonable steps to prevent the fraud, and then the card company make a decision, which from what I have read, is almost certainly to refund the customer.
We have the Shopify logs, as well as proof of delivery/signatures etc. anyone have any experience of dealing with this?
I guess this is something we are going to have to suck up and learn from, but any suggestions of where to report this to would be a great help.
I feel bad if someone has had their details stolen and used, but is is friendly fraud, it will be a bitter pill to swallow.
Sorry to hear about your problem. Basically, you are correct the money will usually be removed from your account, now you have been notified.
The banks don't like to give clear information about when they will and won't allow a charge-back. They also like to imply it is always the retailer's risk. However, this isn't quite true. What follows is my experience of what they will and won't allow;
As you know, when processing a card payment there are three main pieces of information you check for;
i) Registered card holder's address (usually a numerics check)
ii) CV2
iii) 3D secure (i.e. Verified by Visa or Mastercard SecureCode).
If you are sending goods via the post and you are not getting 3d secure verification, you must ensure you have an address match and CV2 match. And you must also only send the goods to the registered card holder's address.
If the customer wants to send the goods to a different delivery address, the transaction must be 3d secure.
In my experience, if you have a 3d secure transaction and you send to a different address, they won't be able to do a charge-back.
If you don't have a 3d-secure transaction but you have sent the goods to the registered card holders address, you will likely win your appeal.
If you have sent the goods to a different address and you don't have 3d secure, you will have no chance at winning your appeal.
The banks don't like to give clear information about when they will and won't allow a charge-back. They also like to imply it is always the retailer's risk. However, this isn't quite true. What follows is my experience of what they will and won't allow;
As you know, when processing a card payment there are three main pieces of information you check for;
i) Registered card holder's address (usually a numerics check)
ii) CV2
iii) 3D secure (i.e. Verified by Visa or Mastercard SecureCode).
If you are sending goods via the post and you are not getting 3d secure verification, you must ensure you have an address match and CV2 match. And you must also only send the goods to the registered card holder's address.
If the customer wants to send the goods to a different delivery address, the transaction must be 3d secure.
In my experience, if you have a 3d secure transaction and you send to a different address, they won't be able to do a charge-back.
If you don't have a 3d-secure transaction but you have sent the goods to the registered card holders address, you will likely win your appeal.
If you have sent the goods to a different address and you don't have 3d secure, you will have no chance at winning your appeal.
sufcfan1 said:
Thanks guys.
Much as i expected really, plan for the loss and if it does come back then its a bonus.
In terms of reporting, would you report it to the police?
I wouldn't bother reporting it, but you could via ActionFraud if you wanted to.Much as i expected really, plan for the loss and if it does come back then its a bonus.
In terms of reporting, would you report it to the police?
Out of interest, did you send the items to the registered card holder's address?
EddieSteadyGo said:
I wouldn't bother reporting it, but you could via ActionFraud if you wanted to.
Out of interest, did you send the items to the registered card holder's address?
I'll probably report it, even if it is only to make myself feel better that some thing might be done, I know it wont.Out of interest, did you send the items to the registered card holder's address?
No we sent it to an alternative address, however they are within 20 miles of one another so though it might be home/work. Its not something I will be entertaining from now on.
Hi I'm really sorry to hear about this.
We were on the Ecwid platform and after good reviews I have moved within the last year to Shopify and I'm very happy with them and their customer care. Anyway that aside we had our first charge back this year a week ago, also a previous customer similar story fortunately a much smaller amount. Anyway it annoyed me so much I called the customer and they rolled over pretty quickly.
Please can you update us all to see what happens, I am quite surprised this doesn't happen more as it seems like quite an easy scam, I suppose the bank would flag it quite quickly if a customer if applying for charge-backs for a lot of transactions??
We were on the Ecwid platform and after good reviews I have moved within the last year to Shopify and I'm very happy with them and their customer care. Anyway that aside we had our first charge back this year a week ago, also a previous customer similar story fortunately a much smaller amount. Anyway it annoyed me so much I called the customer and they rolled over pretty quickly.
Please can you update us all to see what happens, I am quite surprised this doesn't happen more as it seems like quite an easy scam, I suppose the bank would flag it quite quickly if a customer if applying for charge-backs for a lot of transactions??
sufcfan1 said:
No we sent it to an alternative address, however they are within 20 miles of one another so though it might be home/work. Its not something I will be entertaining from now on.
Yep - bloody annoying. You try and show some trust/flexibility and you get kicked in the b
ks. So there will be no chance of winning the charge-back appeal in this circumstance. I've been there too - I genuinely felt sick the first time I realise we had been had over. We deal in high value items and I lost a few thousand pounds in one order. Touch wood, since tightening our rules, we haven't had any charge-backs for over 3 years.You just have to adjust your processes to get the payments 3d secure when there is a change of address. Also, it is worth noting, many merchant account providers are now adding a surcharge on your monthly invoice for non 3d secure transactions anyway, so there is a good reason to try to get pretty much every payment 3d secured, whenever possible.
DSLiverpool said:
Just to trot out my usual procedure if your in doubt refund 1 to 10p and ask them how much you refunded before you send the goods - not concrete but its a cheap fast way to shake down the dodgy buyers.
Just to add, I have incorporated DSLiverpool's suggestion into my business for the odd occasion where a card isn't in the 3d secure scheme.sufcfan1 said:
No we sent it to an alternative address, however they are within 20 miles of one another so though it might be home/work.
No idea if this it true, but I'd have expected in the majority of fraud cases the alternate address would be fairly local - either the card gets nicked from someone the perp knows, or they do it themselves but need to go and collect the goods.Is it pretty much established now that switching on 3D Secure doesn't lose you a big chunk of legitimate business?
We don't use it presently, and half our business is around the world where some customers don't have it. If I insist on it, will I lose their business, or is there a work-around?
We don't use it presently, and half our business is around the world where some customers don't have it. If I insist on it, will I lose their business, or is there a work-around?
You're in a bit of a catch 22, you want to keep yourself protected from instances like this but only shipping to card holders address will lose you business at the same time. I won't buy from anyone who only ships to the registered address, i'm not home during the week and frequently work Saturdays so trying to actually get my goods is a PITA. i'll either have them delivered to work or one of my customers premises that i visit frequently.
So after an evening of gathering postage labels and delivery receipts in what i am certain is a futile attempt to convince someone, I have put this down to experience, but it really gets you when they charge the retailer, who is already down on the deal, another £10 per transaction for the privilege of being the victim of fraud.
I've decided to report it through Action Fraud, where I am sure it will become just another statistic, but it will be recorded and make me feel like i've done something. I'm sure the boys in Blue will be beating a path to the delivery address looking to recover the goods
That's not a dig at them, i know they don't have the resources to follow up this sort of thing.
Thank you all for your support and thoughts, makes me feel a bit better to know it happens to more than just you.
On the subject of 3D secure, it isn't something that Shopify have implemented with Stripe - who are their built in payment gateway - yet, so it would be an external payment gateway to get that, with the added expense that goes with it.
New procedure for the staff will be that nothing is shipped to anything other than the billing address unless we go through DSLiverpool's small refund routine, if it costs me a sale, so be it, at least ill still have the stock in my hand.
The whole thing has been an eye opener in terms of the ease of which this can happen, i'll update this with anything that happens, the evidence wont be submitted till the 14th, but any questions, ask away.
I've decided to report it through Action Fraud, where I am sure it will become just another statistic, but it will be recorded and make me feel like i've done something. I'm sure the boys in Blue will be beating a path to the delivery address looking to recover the goods
That's not a dig at them, i know they don't have the resources to follow up this sort of thing.Thank you all for your support and thoughts, makes me feel a bit better to know it happens to more than just you.
On the subject of 3D secure, it isn't something that Shopify have implemented with Stripe - who are their built in payment gateway - yet, so it would be an external payment gateway to get that, with the added expense that goes with it.
New procedure for the staff will be that nothing is shipped to anything other than the billing address unless we go through DSLiverpool's small refund routine, if it costs me a sale, so be it, at least ill still have the stock in my hand.
The whole thing has been an eye opener in terms of the ease of which this can happen, i'll update this with anything that happens, the evidence wont be submitted till the 14th, but any questions, ask away.
Happens all too often - we've been hit a couple of times.
Now I've got pretty good at spotting them, we had one on Friday for instance - phoned up to order a Dolphin Robotic Pool Cleaner - £1,521.00.
Asked him for his address, "Flat 5, Manor View". Someone in a flat ordering a £1500 pool cleaner? I think not....
Now I've got pretty good at spotting them, we had one on Friday for instance - phoned up to order a Dolphin Robotic Pool Cleaner - £1,521.00.
Asked him for his address, "Flat 5, Manor View". Someone in a flat ordering a £1500 pool cleaner? I think not....
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