Chargeback Gurus' Audio Blog

Most of the anti-fraud tools available to merchants are designed to work automatically according to cold machine logic, using algorithms to block fraudulent transactions behind the scenes. In the card-present environment, however, merchants and their employees must sometimes make very human decisions to stop fraud while it is taking place. This may involve placing a Code 10 call to alert the issuing bank to possible fraud without tipping off the suspicious customer. How can merchants know when it’s the right time to call in a Code 10?

To the customer in the store, the Code 10 call sounds like a normal voice authorization request, with the merchant not saying much beyond answering “yes” or “no” questions. To the issuing bank, however, “Code 10” signifies that the merchant suspects possible fraud: either that the payment card has been stolen or tampered with, or that the customer is not who they claim to be.

For merchants and their employees, it can be difficult to make a confident decision about when and if to make a Code 10 call. It can also be nerve-wracking, as the call may have to be made in front of a person possibly engaged in criminal activity. Of course, merchants and workers must put their own safety first, but if they do not believe that placing the call will put them in danger, the decision should be made based on whether reliable indicators of fraud are present. Note that you can place a Code 10 call after the fact, but it will be too late to stop the transaction.

Full Text:
https://www.chargebackgurus.com/blog/code-10-authorization-calls-chargeback-fraud

©Chargeback Gurus 2020
Production: Courtney Freeman 
Narration: Phil Claffey

The complex and fast-paced world of air travel is an irresistible lure for fraudsters. Keeping flights full requires selling plane tickets through a variety of channels and dealing with fluctuating prices, limited time frames, and many layers of regulations. This is an environment that fraud, identity theft, and black marketeering always finds ways to thrive in. For airlines and travel agencies, combating fraud and chargebacks can be an ongoing headache. How can participants in the air travel industry fight back more effectively against criminal fraudsters and customers who abuse the chargeback process?

Travel fraud comes in many different forms. Some fraudsters take over accounts in order to trade mileage points and other loyalty rewards on the dark web, others use the high transaction volume and frequent cancellations of the travel business to test out stolen card numbers without arousing suspicion, and some really just want to fly somewhere for free.

According to the International Air Transport Association, airline fraud costs airlines and travel agencies more than $800 million per year. While airlines may be able to bear some of these costs, it’s much harder for smaller, independent travel agencies who operate on slender margins to survive under high fraud or chargeback rates. For these merchants, it is extremely important to make use of appropriate fraud prevention methods and fight back against illegitimate chargebacks.

Full Text:
https://www.chargebackgurus.com/blog/airline-and-travel-agency-chargebacks

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife

When it comes to fighting ecommerce fraud, we’re all in it together, every participant in the online payments economy: banks, payment processors, merchants, card networks. This isn’t just a feel-good call for unity—it’s a recognition of the fact that when consumers are victimized by fraudsters, hackers, and other cybercriminals, they tend to be very equitable about sharing the blame among every company that was involved in the incident, whether or not they were actually responsible. How can you maintain the trust of your customers and preserve your reputation when you’re likely to get held accountable for the gaps in another company’s cybersecurity?

Imagine that a fraudster uses payment credentials stolen from Merchant A to make a purchase with Merchant B. When the cardholder finds out, they’re going to be frustrated that Merchant A’s security measures were insufficient, but fairly or not, they’re also going to be upset with Merchant B for accepting the fraudulent transaction, with their issuing bank for failing to pick up on the early warning signs of fraud, for the card network for allowing the transaction to be processed. And of course, Merchant B will be on the hook for the chargeback.

Banks are going through similar issues, especially in the United Kingdom where laws were recently changed to make it easier to start up newer, smaller retail banks. Lacking the infrastructure, capital, and collective experience of the “big four” banks they’re competing with, these so-called challenger banks struggle to keep their cybersecurity protocols as strong as the larger banks’ and get preyed upon by opportunistic fraudsters.

Full Text:
https://www.chargebackgurus.com/blog/challenger-banks-cybersecurity-technology-gap

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife

It’s no surprise that the subscription business model has taken hold of so many ecommerce merchants. In theory, it’s pretty hard to beat: once you convert a lead into a customer, all you have to do is keep giving them what they signed up for and they’ll reliably generate revenue for you every month. The unfortunate reality is that even payments from satisfied customers can vanish unexpectedly due to credit card declines, and getting them to update their payment credentials can be as challenging as converting them in the first place. What can merchants do to reduce credit card decline rates?

The first thing to bear in mind is that this is an extremely common problem for merchants who deal in recurring billing and subscription-based payment models. According to Visa and Mastercard, an average of 15% of recurring payments are declined, but for some industries the rate can be double that. Often, this is because cardholders have maxed out their credit limit, but it’s also common for cards to be declined because payment credentials have changed, and not just the expiration dates—30% of credit cards are reissued every year, frequently because of fraud and data theft.

What’s especially frustrating for merchants is that many customers seem to regard a declined subscription payment as a sign from the universe that it’s time to let that subscription lapse, anyway—the success rate for updating a card after its first decline is about 5%.

Full Text:
https://www.chargebackgurus.com/blog/how-to-reduce-credit-card-decline-rates

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey

If you’re dealing with chargebacks on an ongoing, long-term basis, you may come to develop some opinions about the banks that get involved. Your primary relationship will be with your acquiring bank, the institution that provides you with your merchant account, but it’s likely you’ll find yourself at odds with some of the larger issuing banks on multiple occasions. With millions of customers across the United States, it’s likely that Bank of America will often be the issuers you’re having to contend with.

An institution the size of Bank of America can be an intimidating opponent, but ultimately, you’re both subject to the rules imposed by Visa and Mastercard, and even big banks have a vested interest in following the rules and doing the right (and legal) thing.

Are you learning how to use the Bank of America's platform to dispute chargebacks? Here's our Step by Step Walkthrough.

Full Text:
https://www.chargebackgurus.com/blog/how-to-handle-bank-of-america-chargebacks

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife

In the past decade, one of the biggest stories in entertainment and online media is the rise of streamers: people who broadcast live, streaming video of themselves playing video games or engaging in other watchable activities on platforms like YouTube and Twitch. Streamers can make money through endorsements, ad sales, and affiliate programs, but one of their biggest sources of income is direct donations from their fans and viewers. For many gamers and would-be digital media stars, getting paid to livestream yourself playing games sounds like a dream come true, but whenever digital payments are involved, chargebacks can be the bucket of cold water that brings the dream to an abrupt end. What can Twitch streamers do to protect themselves from the harsh reality of chargebacks?

There’s a lot of competition in the streaming world, and while only a select few approach the heights reached by the Fortnite streamer Ninja, who reportedly received over $20 million to join Microsoft’s Mixer platform, it’s not uncommon for dedicated, professional streamers to pull in thousands per month.

Make no mistake, they’re working hard to earn that money. Building and audience and keeping them coming back to your channel on a regular basis takes time, dedication, skill as a broadcast performer, and often a considerable investment in the hardware and software that makes streaming possible. Just like any other digital entrepreneur, streamers can suffer significant losses from chargebacks, missing out not only on the tips and donations that are getting clawed back, but racking up costly fees as well.

Full Text:
https://www.chargebackgurus.com/blog/twitch-chargebacks

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife

When you’re trying to prevent credit card fraud, one of the key challenges is answering a deceptively simple question: how do you know that the cardholder is who they say they are? In a card-present transaction, you can make use of PINs, EMV chips, and government-issued identification verified by human eyes. Online, in the card-not-present world of ecommerce, it’s less easy. Security tools can interrupt transactions to interrogate the cardholder to prove their identity, but this is an inelegant and off-putting solution. While third party solutions have done much to tame the ecommerce landscape, sometimes it takes action from the major card networks to solve the biggest challenges. Could it be that Mastercard has found an answer to the problem of verifying digital identities?

Back in March, Mastercard presented a consumer-centered framework for establishing and managing digital identity in a paper titled Restoring Trust in a Digital World. Last month, they announced their plans to begin testing a pilot program for real world applications of their model for digital identity.

Full Text:
https://www.chargebackgurus.com/blog/mastercards-digital-identity-verification

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey

Pre-arbitration is not a standard part of dealing with chargebacks, but rather a distinct procedure typically only applicable to Visa cards.  Centered on a second chargeback or second reversal of a disputed transaction, pre-arbitration is a formal procedure to clarify whose claim has standing.

Chargeback Meaning
A chargeback is a transaction reversal process initiated when a consumer requests a forced-refund from their issuing bank.

Pre-arbitration refers to the part of the process when the issuer, or their customer, disputes the merchant’s representment and sends the case to the card network for a final decision in arbitration. Only Visa calls this “pre-arbitration” in their official documentation, but it’s common shorthand in the payments industry for the formal procedure to clarify whose claim has standing on the second reversal of a disputed transaction.

Full Text:
https://www.chargebackgurus.com/blog/understanding-the-chargeback-pre-arbitration-process

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey

With every “please accept our cookies” overlay we have to click through, we are reminded of the changes the GDPR has made to the web. Now that 2020 is here, America’s first major attempt at internet privacy regulation is ready to roll out. As is often the case in matters of technology, California is in the vanguard here. The state’s California Consumer Protection Act was signed into law back in 2018, and on January 1 it went into effect. Many ecommerce merchants inside and outside of California are now wondering, what impact will this have on them and what do they need to do to avoid running afoul of the new law?

In theory, if you’re a Texas merchant and you block internet traffic from everyone but other Texans, you could get away with ignoring the CCPA—but as soon as you make your site accessible to web surfers from California, you’re subject to the CCPA’s rules.

While hyperlocal marketing may be trending, we don’t think there are many merchants out there willing to restrict their potential customer base that much. In practice, the CCPA is going to be a nationwide law.

Full Text:
https://www.chargebackgurus.com/blog/ccpa-understanding-californias-data-privacy-law

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Phil Claffey

As if the loss of revenue from chargebacks wasn’t bad enough, every chargeback has the potential to bring along a host of subsidiary problems—bank fees, increases to your chargeback ratio, time and labor spent in representment, and more—but the most galling one to encounter can be the dreaded double refund chargeback. This is when both a chargeback and a merchant-initiated refund get processed for the same transaction, leaving you with twice the amount of lost revenue on top of the fees, product cost, and other losses. What can merchants do to prevent double refund chargebacks from occurring?

To prevent double refund chargebacks, it is necessary to understand how and why they occur. Obviously enough, they refer to situations in which one hand doesn’t know what the other is doing: either the merchant processes a refund unaware that a bank dispute is in progress, or the bank escalates a dispute to a chargeback before checking with the merchant to see if a refund has already been issued. It doesn’t matter whether the refund was initiated first, or the dispute—double refund chargebacks can occur either way.

Full Text:
https://www.chargebackgurus.com/blog/chargebacks-preventing-double-refunds

©Chargeback Gurus 2020
Production: Tyler DeLarm
Narration: Sarah Rife