$16,000 in sales & customer is losing his memory.

[aikencolon]

I was wondering if anyone here could help me. I received a call today from Nordstrom Visa. They told me a customer of mine who recently purchased about $16,000 in product from me, claims he dosen't know my company. They said he was initiating a "chargeback" process. I immediately provided Visa with all order information, tracking numbers,invoices, receipts, and merchant services information. I called my bank and they informed me to contact my merchant services, which I am in the process of now.

Does anyone have any experience with a situation like this. Maybe some advice regarding what steps I should take. I will take all the help and wisdom I can get. Thanks in advance.

Chris

[Mark]

The old "doesn't recogonize the charge" routine.
Happened to us before.
The easiest way to avaiod this is to be sure your webstore name appears on your merchant account. Be sure to followup orders with emails.
Also, be prepared.
We had a chargeback, submitted invoice, and confirmation of delivery. The card company sent ot customer and STILL, the "Don't recogonize the thecharge!" After that, we were given the opportunity to "rebuttal" the chargeback. Sent in all the evidence we had once again, and, if the original card company doesn't respond to the rebuttal within 60 days, we win! Well, they didn't and we WON! However, we still lost on the charge back fee, and lost the use of the money for 4 months.
Good Luck.
Oh, and if it is American Express you acccept, and you are on their "risky business list" you cannot recover a chargeback despite ANY evidence you have!
If we get dinged by AmEx, they are off our list of accepted cards.

[Luxlife]

It doesn't help now, but this is a situation where the Verified by Visa and Mastercard Securecode programs would help protect the merchant. These programs guarantee payment for cards registered with them. 3dCart should integrate these fraud protection programs into the shopping cart. I thought this was supposed to happen with the 3.0 release.

[ontiltcasinogear]

was shipping the same as billing info? and.. that's a high limit on a visa card!

[aikencolon]

And there is where we messed up. No it was not the same. At this point we are pretty sure it was fraud and not the customer suddenly not remembering who we are. It is/was a very painful lesson. 16k worth of charges, and 12k worth of product out the window.

The story gets even better. The items that were sold were Department of Justice export restricted. Meaning you cannot export the items. The order was sent to a company in FL who puts people on planes and sends items with them to Columbia. We currently have contacted the Department of Homeland Security, and the Secret Service. We may have a law suit with the shipping company as well.

It is a mess right now, that is for sure. What is really amazing to me is this company in FL knows exactly what they are doing, and yet they operate freely in the USA without any issues.

If you do not have the Verisign or the Mastercard service that guarantees the charges I would highly recommend calling Visa/Master on all purchases over your threshold of comfortableness (is that a word). Give them the first 6 digits of the card and that will get you the information of the bank. Call the bank and have them do a verbal conformation with the customer. Record those calls just in case it ever comes back to you. After doing a ton of research on the subject, the liability is on always on the merchant. Basically, Visa and Mastercard as well as the banks have lobbied bills through to make it this way. They cannot hit the card holder, they obviously cannot get the person commiting the act most of the time, so the person holding the bag is us merchants.

A couple of crazy stats I found on the subject for you:

90+% of credit card fraud cases never reach prosecution of the offender
26.1 billion was the charge backs of credit cards to merchants in 2006
You lose the money processed. Fees from not only Visa / Master, but also potentially your bank, the issuing bank on the card, and your merchant services account (4x fees)
You lose the product

Bottom line is you better make sure that is the correct customer, and also keep in mind with the 4x potential of fees even a $50 order can turn in to a $500 chargeback.

JJ

JJ

[ScribeTime]

So, sorry that you all have had to endure such an awful experience.
But thanks for taking the time to share as well as give such great advice.

[Rungreen]

Been there...

Both for our web business and parts business. The parts business took a $12k lesson- and should have known better- but their comfort zone was always local, not international.

If the shipping address is not the same as the billing, you're not going to win the chargeback. On the "I don't know the company" routine, I've been known to google thier phone number, call myself, explain the situation(usually to a machine) and if they don't call back, threaten them. This is stealing, no different from a department store or anything else.

I get mad just thinking about it. I used to, way back in the day, call the credit card company of the holder when I saw a potential fraud. They don't care. At all. That is because YOU will end up paying for it anyways. Law enforcement doesn't care, either.

I'm about to threaten one customer who sent a bad $600 check. Because it was close to Christmas, I didn't want to disappoint them by waiting for the check to clear. I've left 3 messages, and sent a UPS truck to their home 3 times(worth the charge for the tactic). Nothing. Next up is their local law enforcement.

Why should we pay for people to steal from us? Credit card companies promise "protection" to the customer- yeah, protection by stealing from us.

My experience on what can look like a fraud:

1. Credit card from the US, shipping to another country. This is almost never legit. Don't be afraid to call the billing number to verify.

2. Overnight shipping for an item that is worth close to or less than the merchandise. Always double check them.

3. Big orders going to Miami or Long Beach, CA. Freight forwarding is about 50% legit.

4. Multiples of the same item going anywhere, with an unusual billing address.

[SarahInc]

Originally Posted by ontiltcasinogear

was shipping the same as billing info?

My business deals with wedding supplies and gifts so it is not unheard of for a customer to have different ship to and bill to addresses. This is an issue I wrestle with for that reason, because having different can also be a red flag for some form of fraud.

I think it is interesting and frustrating how credit card companies, as well as even certain rights protect the customer from credit card fraud and such, but there appears to be nothing to protect the company from having such actions happen to them. There should be some form of protection for both sides. Everyone can have something stolen from them, not just the consumer side.

I myself encounted this too, however it was for a very small amount of money so I just let it ago.

[dcox]

I feel for you! I thought I was hit bad last year with a $1400 order ($1100-1200) in merchandise. How, 12,000 would shut me down.

I went through the same thing though. I use PayPal website payments pro and they were ZERO help with the chargeback. I shipped to the billing address, but it was then forwarded to another address out of state. How they managed that I do not know. As far as I know, it was fraud without the cardholder's involvment. I have since searched for different fraud prevention options but have yet to find a guarantee for anything unless the service is so strict they don't let any order get through...

At this point, I will ship only to the billing address, which is a little bit of a help. However, I just implimented the gift registry, which will cause a problem. Every time I have purchased from a gift registry, I had the product shipped to the recipient. Currently, that isn't possible with my settings. I could manually override it, but I may loose some orders that way.