I bet you have hundreds if not thousands of competing websites in your niche or industry. Not only that, you probably even have some big multi national corporations with unlimited advertising budgets taking sales away from you!

Competing on the internet is not as easy as it was. These days not only are there big corporate names to contend with, there are also millions of other small businesses competing with you for every dollar.

If you are like most site owners you have invested in the very best site design and graphics you could afford. You have done some work trying to get the highest rank in the search engines. You maybe even did some advertising.
Think about this:
These days just about every industry and niche has many sites competing.
Many of them have very similar products, very similar prices and very similar services
What can make the difference?
What can make your site visitor convert into a buyer?
It’s simple: The reason a visitor decides between sites is often a simple matter of confidence!
Why Is It That You Don’t Have Enough Business?

Your business is NOT a huge multi national that has instant recognition through media advertising and familiar brand names. We can help you overcome this problem.
Your business is NOT a household name that instantly conveys trust and confidence. We know it’s not your fault, to get into that position can take many years. We can help you overcome this hurdle today.
Because your business is NOT familiar to most of your prospects – they simply do not trust you. Thanks to media hype and actual real cases, your visitors think you might steal their identity and their credit card information. This is a real thing, they really do think this. We can help you overcome this tremendous hurdle today.

Explaining Online Payment Fraud And How You Can Prevent Becoming A Victim

The most common fraud on the internet is associated with the unauthorized use of credit cards. This has been a problem since the internet first became a tool for selling.

The credit card companies have been incredibly slow to update their old time thinking and come into the 21st century. They have failed to bring in methods which could slash the instances of credit card fraud and so millions of people have been victimized and billions of dollars have been stolen.

It’s been and continues to be one of the biggest robberies ever.

Credit card fraud on the internet is a problem which does effect everyone. Whether or not you have been a direct victim it’s still costing you as merchants need to increase their costs to cover the losses, so everything you purchase over the internet is a little bit more expensive than it should be.

The Credit Card Companies And Media Tell Fibs

For many years now I’ve seen media stories that purposely scare consumers into believing that using their credit card to make purchases on the intenret is fraught with risk.

This is pure B.S. And I’ll explain why.

The authorized card holder is not responsible for transactions made on their card without their authority. Thats what signing for a transaction is all about it’s proof the cardholder was present and approved the transaction.

If you as a cardholder find transactions on your statement which were not authorized then its a simple matter to contact your bank and the bank will basically reverse the transactions for you. I will cover this area in more detail under “Getting A Chargeback”.

So if there is no real risk to a cardholder, then who is at risk? Is it the credit card company? The bank? Or the merchant?

Someone really smart once told me “unless you make the rules you can’t win” so considering that it’s the banks and the credit card companies that make the rules I can absolutely assure you it’s not them who carry any risk.

The only one that has a risk from a transaction over the internet is the merchant.

Yes the merchant has no defence to a fraudulent transaction.

They accept the transaction in good faith, supply the goods or services and bank the payment. Then, before they know what hit them, their bank has taken the funds back out of the account and told them the transaction was not authorized and a chargeback has been done on them.

Not only did they lose the payment for the goods or services, they also lost the goods, and freight costs, the merchant account fee charged on the transaction plus the probably even got fined $25 by Visa or Mastercard.

So bearing all that in mind, it’s easy to see that everything is a ittle more expensive that it should be because the risk needs ot be covered.

How To Spot A Fraudulent Transaction.

If you’re a merchant then you need to take particular notice of this chapter as it’s going to have a huge impact on the profitablility of your business.

I’ve seen absolutely thousands of fraudulent transactions and I still get caught, but nowhere nears as often as I used to. It will probably be unlikely that you will catch every single fraudulent transaction but if you follow the steps you will reduce your risk substantially.

Step 1

You need to ensure that you have a shopping cart which captures the clients IP address when they place an order. This is crucial. You need to compare the clients address to the location of the IP address.

There are plenty of sites that provide IP lookups services for free. I use a couple as sometimes all loookup sites have errors. The two I use mostly are WhatIsMyIpAddress.com and GeoBytes.com

You need to copy and paste the clients IP address into the IP field on the site(s) above.

Big Takeaway: If the result says the IP is using a Proxy then it is a very high probability that you are dealing with a fraudster who is trying to conceal his location. Definitely treat the transaction as highly suspect.

If your client says they live in San Jose, California but the IP says they are currently in Dallas, Texas then there is a problem that needs to be investigated. It’s unlikely that while he was vacationing in Dallas he decided to place an order for your product…it’s not impossible of course, but unlikely.

IP addresses are less accurate outside the US. So bear that in mind before accusing someone of being a fraudster. A more cautious approach could be worthwhile.

Step 2

Look at the email address the client has used. Does it sound strange and look “wrong” Here is an example of a fraudster trying to make a purchase on one of my sites a couple of days ago.

Name: Steven Blanton
Email: malcomjasper @ yahoo.com

I spread out the email so it did not hyperlink in this document. The important thing to notice is the clients name is nothing like the name being used on the email. Remember, fraudsters are mostly pretty stupid people and they make mistakes like this all the time. Taking a close look at all orders you receive can save you a lot of problems later on.

As soon as you see something as blatantly obvious as this you have a problem that needs to be investigated.

Here’s another one which if you just give it a quick glance looks ok, but its not.

Name: wesley clem
Email: wesleyclem30 @ yahoo.co.uk
Often fraudsters use a free account with the victims name in the email address. A giveaway that points to this is a random number after the name. It’s not always a fraudster but it happens often enough that its worth checking out.
Another important thing to look for with email addresses is what often comes up with the type of email account used in the above example. Notice its from Yahoo in the United Kingdom. Why would someone who apparently lives in California have a Yahoo UK email account? This fraudster gave a California address on the order. Most unlikely that a resident of California would have a UK email account.

Step 3

What did they order? I have a site that sells a wide variety of products but the fraudsters often select the same items so it’s always a warning to me when I see those items being ordered. I understand this may not be applicable to everyone but it is an indicator that I look at.

Fraudsters are greedy and often try and purchase way more than the vast majority of legitimate clients.

Look at patterns as well. Most first time clients are not going to spend a bunch of money on high ticket items with you. They might build up to that as they develop trust in you but fraudsters do not have those concerns, they want to try and take you for all they can and go for high ticket items right up front.

Be vary wary of high ticket transactions, always investigate them, especially when its from a first time client.

Testing The Client

Ok, so you have what looks like it could be a fraudulent transaction on your hands. What do you do? Some people want to jump on the phone and call the client to get some confirmation. I think thats a waste of time. How do you know the number you are calling is not be diverted to the fruadsters real location? What do you expect them to do or say over the phone to give you reassurance? Nothing that I can think of, plus who really wants to speak with them anyway? Not me.

So here is what I do. I send them an email that is all cut n paste from a notepad that I keep on my desktop.

It takes a few seconds to send and firmly puts the ball in their court.

This is the text and you are welcome to use it as it is or modify it to become your own.

I put this screaming headline in the subject

!!! IMPORTANT: ABOUT YOUR ORDER !!!

Hello

Thank you for your order, we appreciate your support.

Our company is often targeted by fraudsters using stolen credit cards.

This causes us to lose a great deal of money.

Our bank has insisted that we challenge orders from new clients to ensure we are dealing with the authorized cardholder.

We understand this is an inconvenience, however if we do not take these bank recommended steps with new clients we will be out of business because our bank will cancel our merchant account.

Please scan your licence and email it to us. If you feel more comfortable, feel free to cover the licence number. We are only interested in seeing Government issued ID proving you are the authorized credit card holder for the card used in the transaction.

We do not store or use your personal information. We use it just to check your ID like a bouncer on the door at a club would.

So bearing all that in mind, you will understand why its important to respond to us immediately. Even if you respond to let us know you need to go to kinkos or someplace to get the licence scanned. We don’t mind if it takes up to 24 hours, we understand. We will just hold off processing your order until we receive your ID.

If you have any questions, please reply to this email.

Best regards

The Team at YourDomain.com

That email causes three distinct reactions:

1. It gets ignored, fraudsters simply ignore it but sometimes in a week or so ask where their order is. I told you they were stupid.
2. The fraudster sends you a fake ID. These are usually hilariously bad forgeries that are very easy to detect. A couple of examples are below.
3. Legitimate cardholders will reply back asking why they need to do this because they have never had to do it before and they don’t like risking ID theft by sending you a copy of their licence.
This is the most difficult response because you are still not sure if they are the legitimate authorized card holder or not. You don’t want to lose the sale but you need to feel more confident about the sale.
What I try and do is explain that you have been in business for “x” number of years, it’s not your practice to steal ID’s you simply need to have some assurance so you can confidently process their order. Explain to them that it’s no different to them needing to show ID when they make other purchases in bricks n mortar shops.
If they still will not co-operate you need to make a decision as to the risk. I often simply refund the order and move on, more often than not you are saving yourself from a demanding unreasonable customer anyway.

Examples Of Forged ID’s

Nice picture Doreen…told you they were stupid.

Proof Of Delivery: Online sales fall into two categories; you either provide real tangible trackable products or digital products. Mostly I sell digital, downloadable products. But, lets cover the easy one first, real tangible products.

Proof of delivery with a physical product is easy, you simply have the cardholder sign for it when its delivered. No signature, no delivery. Period.

So when your bank receives a chargeback claim for non delivery, you can easily send them a copy of the delivery paperwork with the cardholders signature on it. That is going to be the end of the matter and you will not be having the money from that sale ripped out of your bank account.

Now lets look at the much more difficult to prove area of digital products. This would also cover services and consulting of a non tangible nature.

Lets run through a common scenario. A visitor comes to your site and decides to buy your $17.00 ebook (or your downloadable report or other digital type product).

They pay with their trusty credit card and are directed to the download page. Everyone is happy. But maybe not for ever after as they say in the fairy tales.

A few weeks later the customer receives the credit card statement and a chain of thoughts go through his head.

Some of them are these:

“Who is this company that I’ve never heard of, they charged me $17.00 for something on the internet?”

“Oh yes I remember that $17 ebook I bought, it was hopeless and not worth the money. “

“I meant to get a refund on that $17 ebook, probably the refund date has passed”

“I’m never going to read that $17 ebook so I better get my money back”

“They have no proof I authorized this transaction so I should do a chargeback”

As you can see any of these thoughts is not good for you, they all lead to a scenario of you losing the income from the sale, spending time dealing with the paperwork, maybe being fined and also risking losing your merchant account.

Not good!

The problem has been the same since I started accepting credit cards over the internet in September 1995. That problem is, the merchant does not have the cardholders signature authorizing the transaction.

I’ve had millions of dollars chargedback over the years and it never gets any easier to deal with.

Here’s some things you might consider doing in order to reduce the problem.

Put A Login For Your Download Area: After you accept a payment, you could send the client to a page where they need to register their name, email address, username and a password. On this page you could make it very obvious that you are recording their IP address against fraudulent claims.

You could have your programmer collect all this information in a simple searchable database. When you get a claim for a chargeback you could print this information out and send it to the bank and to your client. There is no guarantee this will stop the chargebacks in every case but in some it will as people get a bit timid when they feel they might get into trouble.

Send A Hard Copy To The Clients Address: You could do this by offering an upsell to a CD copy of the ebook for around $9.97 Require a signature for delivery once again.

Mail A Receipt to The Clients Address: Print a hard copy of all sales receipts and post them to the clients, once again, a signature is required.

What I’m trying to get at here is to be protected against fraud chargebacks you need to have the cardholders signature. These postal methods above give you that and also give you proof of delivery so there are no arguments later on.