posted on December 8, 2000 10:35:50 PMyisgood asks for: . A service has to come out with clear rules (and stick to them, unlike one of your competitors) that say: "If a seller does the following, they will be safe against fraud and charge backs and if a buyer does the following they will be protected against seller fraud."
The forces of fraud are against you, yisgood. A somewhat above average crook could burn anyone offering this guarantee badly.
Consider the perspective of a crook as both the buyer with a bad credit card and the seller. Now consider this story happening 1000 times per day.
The ultimate recipient of the money cannot ever be completely indemnified from fraud.
Ever. (interestingly, this was news to PayPal at one time, demonstrating their utter naivite in fraud analysis, although they seem to have learned this basic lesson by now)
posted on December 9, 2000 01:17:37 PM
The best protection against fraud is to stop letting other people handle your charges.
Setup your own Merchant Account with a real processing company, such as Novus (owned by Discover) or with American Express (which ,I believe, will also process MC/Visa)
This will enable you to verify billing addresses to insure that you are shipping to the person that owns the credit card. It also enables you to speak directly to the issuing bank to verify name and address if you are still not comfortable with the transaction. It also provides for reversal of chargebacks if you can demonstrate that you processed your part of the transaction according to the terms of your contract.
With our system, we know that we are shipping to the right person before our inventory gets packed. 2,500 orders this year and no chargebacks or bad credit cards. ( We have, however, failed to ship several orders where the address did not match. These would have most likely been losses for us had we accepted paypal for the transaction instead of processing them directly and calling the credit card company )
posted on December 9, 2000 01:34:26 PM
If you are a really high volume seller, that argument has merit. The fees charged for having a merchant account, monthly fees, buying the software, ect. is more than a small seller could afford and still make anything on their sales. Besides, it doesn't stop someone from doing a chargeback on you. Nothing will.
I think Paypal and other epayment systems are really best suited for the small and occasional seller. They provide a low cost service that anyone can use. Defending against fraud is difficult but I see the e-pay systems adapting to make it safer by requiring more verifications before processing transactions. Lots of people are complaining about it, but mostly I see the complaints coming from high volume sellers. Really they should be on their own merchant accounts by now anyway.
Just my thoughts on the subject.
