Payment fraud and chargeback
What is a payment fraud?
A payment fraud is a payment by card that has not been made by the cardholder. It’s a situation when an unauthorized person uses the card or when the card is lost or stolen.
How to tell a payment fraud?
Payment can be fraudulent when there are some of the following indicators:
- a new customer is paying a high amount
- an order with several variants of the same goods
- an order of a very expensive liquid item
- several orders with the same address
- customer is using a freemail address
If you are suspicious of a fraudulent attempt, the payment is likely to be fraudulent. If in doubt, read our section “Are you suspicious of a fraudulent attempt?” below in this text.
What is chargeback?
Chargeback is a situation when a customer demands to be given money back. Chargeback is related to a card payment and can occur no matter what kind of goods you sell.
Most common reasons why chargeback occurs:
- technical issues (payment fails)
- return by a customer (they haven’t received their goods, late delivery, customer receives a different product, payment has been double charged, etc.)
- card abuse (payment fraud)
What’s the difference between a fraud and chargeback
When a cardholder has not made a payment or isn’t familiar with that, it’s a fraud. Chargeback is a situation when a customer wants money back. It has financial consequences - the payment is refunded.
Fraud and chargeback prevention
When you accept card payments, you should pay attention to a fraud and chargeback prevetion.
Why is it so important to avoid frauds and chargebacks?
- when a chargeback is successful, your payment is to be returned to the customer
- there’s a fee related to chargebacks
- card associations monitor frauds and chargebacks that occur at e-shops
Fortunately you can avoid those situations.
You can check hazardous orders or restrict accepting cards issued in certain regions to avoid fraudulent payments. To do so contact us at firstname.lastname@example.org.
To avoid chargebacks you can provide additional information in the detail of the product at your website. Your delivery time should be appropriate, reliable, the level of your support should be of a high quality, Provide appropriate and reliable delivery time, high quality support, and quick and thoroughful return policies. Keep your contact info up to date. Last but not least you should pay attention to your terms and conditions - make them visible and clear and don’t forget to add refund and return policies.
Are you suspicious of a fraudulent attempt?
If you think that a payment is fraudulent, contact the customer and check their address. If in doubt, ask them to choose a different payment method (cash on delivery, bak transfer). You can also contact us at email@example.com . If you want to refund the payment to the customer’s card, do it as soon as possible so that you can avoid a chargeback situation.
GoPay tip: To refund a payment you need to use the payment method which was initially used by the customer.
Feel free to ask us to refund a payment. Contact us at firstname.lastname@example.org.
Have you received an e-mail with a chargeback notification? Have you been asked to submit payment details?
Whether the chargeback or return is successful depends on the scope of payment details. Such details are based on a so-called reason code. The return can relate to undelivered goods, double charged payment, etc. Requirements for payment details are always a part of the notification you receive from us.
GoPay tip: When you receive information about chargeback or a request to add all the payment details, don’t refund the payment and don’t send the undelivered product to the customer.
If you want to avoid chargeback from being successful, send us all the necessary payment details as soon as possible. If the details are incomplete or we receive them late, the chargeback can be successful for the customer, which means that we charge you a fee for that and we also take your payment back. You can see the fees here.
General requirements that apply to payment details
If a customer wants to refund a payment, we require you to send us payment details. The contents of the details depend on the product which is to be returned.
- online product or service - order, information that confirms that the cardholder has had an access or downloaded the purchased digital content, a statement of your administration (including IP addresses, logs, etc.)
- offline service - date of activating the service, a copy of the contract, or order, etc.)
- goods - order, invoice, delivery address, document of order dispatched to the requested address (including an order number)
- double-processed order - two different documents of product distribution