The Wholesale Forums

[Ziker]

Guys, i need some advise please.

We are in the process of setting up a debit/credit card processing system, so we can take payments from our customers over the phone. This is an ideal solution when advertising in local papers/magazines etc. Now here's the problem. After talking to the account manager who is dealing with our processing setup, he warned me about a scam that is taking place with payments made by CNP (cardholder not present). Now without going into precise details, because i dont want to give ideas to any unsavory people that might just happen to read this, its seems that it is very easy for the customer to deny receiving the goods. I can produce tracking numbers, signed delivery tickets, only deliver to card billing address, anything and everything to prove the goods where delivered, but there is a terrifying loophole that totally exposes the supplier. Basically at the end of it all i am left with 2 options, send the goods again or the bank takes the customers money back.

Has anyone had past experiences with similar circumstances? I would be very grateful if you could let me know how, or if, we can protect ourselves against this. Im sorry if it all sounds a little vague, but i dont want to start giving thiefs and scammers a step by step guide on how to rip us all off.

Thanks for listening/reading

[greedyboy]

At the end of the day you rarely win CNP transactions. Basically a customer will dispute the transaction, you processor will contact you and ask for all documents relating to the transaction and then 30 days later they debit the amount. Depending on your provider you are usually allowed something like 2% off your turnover to cover disputes.

At the end of the day that is the risk involved in CNP transactions. If someone sounds remotely dodgy you just simply refuse the business.

Those who complain about PayPal should try living in the real world

[Pete]

Two CYA methods I suggest. I do not know they are available in the UK, but would think so.

First is to insist on the CVV code on the back of the card. In the US it's 3 digits on VISA, M/C and Discover cards. There is a 4 digit code imprinted on the front of AMEX cards. This code virtually guarantees the person has the card in their hand at time of the order and didn't just pick up the number from the trash.

Second is to use Deliver to Addressee Only or Adult Signature Required when shipping.

Frankly, I have hardly any disputes and win them all. They are a pain, just in the time involved, but they can be resolved in your favor if you cover all the bases.
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[DSC]

You can do as alot of electronic sellers do and check records on the published electoral roll, not 100% accurate but its another vetting procedute.

[Ziker]

Thank you for your replies.

Ive recently spoken to the account manager at Streamline who is dealing with my processing, and although he's confirmed that there is nothing i can do when it comes to this particular scam, your posts have made me sit a little happier knowing that it is not a frequent occurance.

Thanks again for your help and advice.