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Fraud and Chargebacks

Fraud and Chargebacks

Fraud and chargebacks hurt your bottom line by eliminating potential revenue. And if your chargeback rates exceed the threshold set by credit card issuers, you can even lose your ability to accept credit payments. That’s why, when potential fraud turns into a chargeback, you must address it. But that takes time. CashBox helps you prevent and fight fraud and chargebacks, helping to boost revenue while removing much of the burden of chargeback management from your team.

Businesses that offer products or services by subscription may be at extra risk of fraud. Fraudsters often test card validity by making a small initial purchase for a digital good, such as an online subscription, before using the card in question for a bigger theft. Subscription providers are also at risk of “friendly fraud,” where a consumer makes a purchase with a card and then challenges the validity of the transaction. This can happen because the consumer wants to back out of the transaction, or because they don’t recall authorizing it. For instance, they may sign up for a service for their child and forget that they did.

When true or friendly fraud lead to chargebacks, CashBox is on your side, helping you fight both with Vindicia ChargeGuard protection.

Understanding Chargebacks

A chargeback is a reversal of a credit card transaction, typically initiated when a customer disputes the legitimacy of a financial transaction. When a chargeback occurs, the amount of the disputed transaction is taken back, often with an additional payment processor fee. If you cannot prove the legitimacy of the original transaction, you lose the product sold, payment for the product, transaction processing fees, applicable currency conversion commissions, and any additional chargeback processing fees. You need to be able to effectively address chargebacks, without draining internal resources.

ChargeGuard Protection

Vindicia’s ChargeGuard fraud screening tools, included with CashBox, start protecting you from chargebacks the moment a customer engages in a transaction with you. The first step in preventing a chargeback is fraud risk screening. Risk screening protects you from an unacceptable chargeback rate. It helps reduce fraud risk with minimal intervention from your organization, and minimizes false positives (incorrectly rejected valid transactions). CashBox screening features include:

  • IP geolocation control. CashBox pinpoints your customer’s physical location, removing some of the anonymity offered by the Internet. A significant mismatch between the IP location and billing address can be a red flag.
  • Proxy detection. CashBox determines whether an IP address is an anonymous or open proxy, either of which can be used to bypass IP geolocation controls.
  • Bank identification number (BIN) validation. CashBox checks whether the country of the billing address matches that of the issuing bank.
  • Email address analysis. CashBox determines whether the customer’s email address is from a free email provider, and if that email address has been associated with high-risk or fraudulent transactions.
  • True probability profiles. CashBox validates the risk screening against chargebacks processed across the Vindicia database, helping you determine whether to accept or reject the transaction.
  • A broad database. Vindicia uses analysis from its network of customers to enhance the detection of fraudulent orders. 

When a chargeback occurs, a detailed record of it is stored in your merchant account, including the original transaction or transactions to which it applies. Vindicia uses this information to fight, resolve, and win chargebacks for you. Vindicia first assesses the information reported by your customer and by you. If the chargeback is legitimate, Vindicia leaves it as is. However, if it appears to be fraudulent, Vindicia disputes it on your behalf. Vindicia typically wins 60 to 80 percent of all disputed chargebacks.

CashBox ChargeGuard highlights include:

  • Full chargeback management services, including:
    • Risk analysis
    • Disputing fraudulent chargebacks
    • Best practices recommendations
    • Analytics
  • Vindicia employs an in-house team of chargeback analysts
  • Proactive fraud risk analysis to reduce fraud and chargebacks

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