I am still successfully selling tons of xbox 360's (on my own website) due to the ongoing shortage. The biggest problem I have now is that atleast 50% of my orders are bogus and it is getting harder and harder to screen them all out. The best scam I just narowly avoided this moring.
A customer orders 3 xbox 360's and ships them to the verified address on the credit card account. No problems I ship them off.
Then I have UPS notify me if there are any exceptions in the delivery. I found out last night that UPS says the address is invalid and has arranged for the customer to come pick up their order. Whoa! Wait a minute! Who says you can hand an order over without a correct address!
I call the customer and he can't remember his own address off hand and says the Xbox's are for his nephews. Yah right.
I had to call UPS and recall the package so as not to get screwed by a fairly clever fraud. I also checked with American Express who said the card has been invalidated some time after the order was placed.
How do you handle fraud. I have atleast 1 bad order a day. Who do you report them to?
I sell flags and xboxes and never once has anyone tried to steal a flag from me. However 50% of my xbox orders are bogus. How do you avoid fraud?
posted on February 9, 2006 08:36:38 AM
How to you avoid fraud?
I think fraud must go with the territory. You just have to budget for write-offs and if it is no longer profitable to sell x-boxes then sell something else.
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Electronics items like the Xbox 360, which are in heavy demand, are always a higher risk since they so easy for fraudsters to offload/resell.
You might consider a good merchant account with better fraud detection than the one you currently use. Any halfway decent fraud detection software would have alerted you that the phony delivery address was different from the registered billing address of the AmEx cardholder. You can always verify the card is in the physical possession of the purchaser by request a photocopy of the signature strip which has the CVV also.
However 50% of my xbox orders are bogus. How do you avoid fraud?
For a start avoid online payment services that allow easy chargebacks or reversals, or don't adequately protect you against them.
posted on February 9, 2006 12:59:16 PM
I have a shop on Yahoo shopping and fraud is rampant,coming from Nigeria,Indonesia,Russia,Uk,it could be any part of the world.
Yahoo has software in place which detects someone making rapid purchases across Yahoo shopping going from store to store and will alert the shopowner 'this order could be fraud'.it is up to the shopowner to perform due diligence ,final decision rests with the shopowner-jewelry esp gold and electronics goods get more fraud orders than say collectibles or T-shirts.
We usually study the order for ship to,bill to,CVV code and do a reverse lookup using the phone number to find the physical addr.
We will also call 'our' merchant account provider and the customer credit card issuer,sometimes they will not give out any information.
Calling the customer would be another option,but some crooks are very easy and relaxed talking on the phone ,they can talk a long time .
You can also ask them to fax you the latest credit card statement or front and back of the credit card they used,or fax them the order form and make them sign it and fax it back to you,all these will just irk the honest customer.
50% Fraud rate is too high,you may want to consider selling them to brick and mortar stores and let them resell .OR ask for a money order/cashier check or ACH.
I recall VISA/MC have some kind of merchant protection ,call your merchant account provider and ask .
/ lets all stop whining !! /
posted on February 9, 2006 02:25:42 PM
the problem is that your good customers want some protection too,what if she ships them a box of rocks??
/ lets all stop whining !! /
posted on February 9, 2006 03:06:47 PMthe problem is that your good customers want some protection too,what if she ships them a box of rocks??
This is why smart customers check sellers feedback, and their selling history to avoid hijacked accounts. If a seller of low-priced items like postcards or buttons, etc. suddenly starts selling Xbox 360s in quantity at unbelievably low prices - well TANSTAAFL!
posted on February 9, 2006 04:44:14 PM
agitprop,
she is selling from her website,not Ebay.
There was this used car salesman who shipped a box of rocks to an Ebay bidder a few years ago.
The bidder bidded on a used laptop.
I am using a merchant account that verifies the billing address. The problem is it only verifies specific aspects of the biling address as mispellings are common.
For example in the case of the 3 xboxes the zip code matched. When I called the guy on why it was being picked up he said the zip code was wrong on his Amex card but he still continued to recieve it in the mail.
I dont use paypal on my own website after they locked my account for 6 weeks. I still use it on ebay as you have to.
So far I only ship to billing addresses or they can add a secondary address to the card and I call the bank to verify the address is listed with them.
I just updated my new website - give me your feedback on it. http://gotflag.com
posted on February 11, 2006 12:02:18 PM
Toben,
they verify certain aspects of the billing address,mispelling of certain words or phrases dont make any difference .
do a reverse lookup of their ship to address with their phone number,if they give you cell phone number,tell them you want their home phone.
posted on February 11, 2006 09:17:58 PMI still use it on ebay as you have to.
No you don't. At work, we quit the PayPal game a long time ago. Merchant account has been great and way cheaper.
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Many misleading tricks in 2006. The new Demomoron slogan.
posted on February 14, 2006 11:54:19 PM
stonecold I see you dropped paypal on ebay. I dont bid on auctions that dont take paypal and know a lot of other people dont either.
I dont need to accept paypal on ebay, but I would lose a lot of money if I did.
I just take my extra profits and stick some away for the "Paypal screwed me again" fund.
In the long I think on ebay its better to accept paypal and just expect the occasional problem.
I hate paypal, but not enough to make less money.
I just updated my new website - give me your feedback on it. http://gotflag.com
posted on February 15, 2006 07:51:39 AMI dont bid on auctions that dont take paypal and know a lot of other people dont either.
That hasn't held true either. People are very willing to use their credit cards over PayPal. Even buyers are realizing that it is much more convenient and safer.
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Many misleading tricks in 2006. The new Demomoron slogan.
posted on February 15, 2006 09:23:40 AM
We accept PayPal, but we also offer straight purchases via our own merchant account.
When a card number is put through our Merchant Account, we received the complete order information, plus IF the billing address is in any way incorrect our processor notes on the order either (AVS Match), or (AVS Zip Only) or (AVS address only).
WHEN the billing address is not an exact match, I use “Net Detective” to check on the person, and IF I find them listed by Net Detective as living at the address that AVS failed to approve, I ship anyway. Since we require a UPS signature on ALL shipments, we have not had much fraud. In fact, PayPal chargebacks is what sent us to using UPS almost exclusively, and we have a daily pick up and delivery. Before I used “Net Detective,” to verify names, addresses, or phone numbers, I used some of the FREE Reverse Search sites to try to verify order information, when AVS had rejected them.
NO ONE system is perfect. A few years back I was at the local mall and had just been in a major department store making purchases with my credit card. I then went to the Nail Shop to have my nails done and when I started to pay, their “swipe” machine kept rejecting my credit card. I knew the card was good, and since it was my American Express I knew I hadn’t gone over any purchasing limits, but you can’t argue with a machine and I understood the owner’s position – their processor rejected it, the shop would accept cash, but I seldom carry cash, and they didn’t accept checks which I did have with me. We finally agreed on their taking a check, since there was no other way I could pay. BUT as you see, occasionally a processor or verification program can be wrong.
I have customers who purchase items consistently on one of our web sites, and our processor NEVER approves their credit card matching their billing address, but I have never had a problem with them. I verified them via “Net Detective.”
Credit card processors tell you to watch for pricy items ordered and usually requested to be shipped to a second party. They also tell us to watch for unusual purchases, and the buyer requesting over night or 2 day delivery shipping service. I also read the purcharser’s e-mail address, and am much more suspicious of an order which may have one thing wrong in the address reported to us by AVS – IF the person is using a hotmail, or yahoo address, and particularly if they are requesting shipping to another address. I void the order, and have a template response which is very polite telling them that they must have made a typo, that AVS the National process manager rejected their order. The template tells them how to correct the non-matching billing address and to please call us when they have corrected it with their credit card holder and we will be happy to complete their order.
This has worked well for us, as many folks have just moved and not notified their credit card company of their new billing address, and they just rely on the USPS to forward it.
IF we get a very lucrative order and AVS rejects it as not matching the billing address, but to me everything else looks legit, I call the customer personally and talk to them about it. If I am able to reach the customer by phone, and I KNOW that, he will have to sign for the shipment, so I am comfortable in shipping to such a person.
I use “Net Detective” which is a very reasonable cost program and it has saved many charges, which the national processing approval system did not have the latest information on. It paid for its basic program when I searched for a customer declined by AVS, but found him via “Net Detective”, and he has been a consistent buyer. The URL for “Net Detective is:
