Fraud prevention

Disputes are an unfortunate aspect of accepting payments online and the best way to manage them is to prevent them from happening at all. An effective dispute and fraud prevention strategy uses a number of methods that are best suited for your business while keeping any customer burden—and losses—to a minimum.

Use the following information to create an effective disputes and fraud prevention strategy. Depending on the service you provide, the goods you sell, or how your business operates, certain methods may be more effective than others.

Collect as much payment information as possible

Some disputes are lost because only the minimum information was required during checkout. This makes it difficult (sometimes impossible) for us or the card issuer to verify that the customer is legitimate. For instance, while a billing postal code is not always necessary to process a card payment, including it allows the payment to be verified by the card issuer. If verification fails, consider rejecting the payment as this may be an indication of fraud.

Effective customer communication

Clear and frequent contact with your customers can help prevent many of the reasons for disputes. By responding to issuers and processing refunds or replacement orders quickly, your customers are far less likely to take the time to dispute a payment. Make your customer service contact information easy to find, keep customers updated throughout their order process, and provide updates about deliveries.

In general, you should make your terms of service and policies easy to find on your website, and require customers to agree to them. Rather than simply linking to them during checkout, provide a full version of them on the checkout page or as a pop-up with a requirement to agree to them prior to submitting the order.

Card issuers can be very specific about how you present your policies. If you have a checkbox your customer must accept that only contains a link, it can be rejected as unsatisfactory evidence that your customer was aware of your policies. There must be reasonable evidence that your customer was presented with a full copy of your policies prior to their purchase.

When shipping physical goods to customers, use carriers and services that provide online tracking and delivery confirmation whenever possible. Provide this information to your customers as soon as it’s available (if you need to submit tracking information as dispute evidence, note that card issuers do not follow links so screenshots must be provided).

Avoiding fraudulent payments

A payment is considered fraudulent when the cardholder did not authorize it. Most fraudulent payments are made using stolen cards or card numbers. When a cardholder is notified that the payment has been made or they review their card statement, they contact their card issuer to dispute it.

Notifying you of suspected fraud

Although we notify you as soon as we become aware of any suspicious activity, it may be several days after a payment has been made. Keep in mind that this is not confirmation that a payment was fraudulent—only that we have reason to believe it is. We provide this information to you to ensure that you’re able to make an informed decision and take action where necessary (e.g., contact the customer or place their order on hold). If you have any concerns about the payment after reviewing it, we recommend refunding it immediately. This action immediately refunds it so it cannot then be disputed.

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