This maybe sound dumb but what is a chargeback?
-Chris

When a credit card owner sees a charge on their credit card that they did not authorize, they first attempt to settle the dispute with the merchant, then if they cannot settle it, they contact their credit card provider and initiate a chargeback against the merchant.

So basically... if any credit card holder sees a fraudulent transaction, they can reverse it, and get their money back from the merchant, and (in this industry) it is nearly impossible to fight if you are the merchant. :(

So if you are the merchant and there was an $80 chargeback, you are charged the $80 plus any chargeback fees from your merchant provider, which can be as high as $30. So, you end up losing out big time. :(

It's basically a return of charge for a variety of postential reasons. It mostly happens for customer dissatisfaction or credit card fraud. It is bad news for the merchant, and the merchant who get screwed, always.

Well, as sad as it is, the system is designed to protect the "little poeple", our clients, customers etc. If a company loses some money every now and then it's not a huge catastrophy, but when you're getting scre*** and don't even know for what is pretty nasty.

Well you can always sign up for Verified by Visa lorandm - that will help to prevent the "I didn't do its" and even give you a break on the discount rate.

Just a question for everyone. Besides fraudulent chargebacks, how is everyone's ability to apeal and resolve them?

you have to usually call 9-5 or be willing to talk to someone from out of the us/canada/uk etc. for 2 hours on hold from some place like india

-have good records
-any information on dates is important (sign-up)
-possible have a log of there ip address from sign-up form
-i try and talk to my clients often to keep them up to speed i guess is what i call it

So some dumbass loses his card, the person who found it uses it to buy something from my store.. and then the owner of the card needs a chargeback for something and I get screwed for it? Now if it was because of a dissatisfaction I'm fine with that but if he lseos his card.. thats crap.

That's correct OLSW

Banks even make money off of it

Chargebacks, unfortunately, are a cost of doing business in the "card not present" world.

Some initiatives such as Verified by Visa, MasterCard SecureCode and fraud prevention tools such as AVS, CVV2, IP & BIN-based scrubs and good ol' fashioned due diligence on the new order signup side can go a long ways towards limiting a merchant's exposure to chargebacks, however.

Originally posted by cdgcommerce
CVV2, IP & BIN-based scrubs and good ol' fashioned due diligence on the new order signup side can go a long ways towards limiting a merchant's exposure to chargebacks, however.

CDG,

I think CVV2 is a complete waste of time. All you have to do is be in possession of the stolen card in order to bypass that. Agree?

We had a good discusssion of this on another thread:

http://www.webhostingtalk.com/showthread.php?s=&threadid=265721

I'd agree that CVV won't help if the card is physically stolen.

But for someone who is generating random credit card numbers and testing to see which ones are accepted - requiring a CVV adds another order of magnitude of difficulty which will likely defeat those kinds of efforts.

Keep in mind - there is always a "counter-measure" to each measure taken both by and against fraudsters. But the more layers of defense there are, the more protection there is *most* of the time.

Originally posted by cdgcommerce
I'd agree that CVV won't help if the card is physically stolen.

But for someone who is generating random credit card numbers and testing to see which ones are accepted - requiring a CVV adds another order of magnitude of difficulty which will likely defeat those kinds of efforts.

Keep in mind - there is always a "counter-measure" to each measure taken both by and against fraudsters. But the more layers of defense there are, the more protection there is *most* of the time.

agreed