Understand how one of the most common problems faced by online stores occurs and find out what can be done to prevent it.

If you have a virtual store, you certainly already know what chargeback is. This term, unfortunately, scares many business owners and is more common than you might think. Even in environments that follow all virtual security rules, this problem can still happen.

PAk legislation still does not have efficient mechanisms to curb all types of fraud, especially those carried out in the virtual world. Because of this, the best thing to do is to take certain precautions and invest in security for your e-commerce. In this article, we'll talk a little more about the subject and about the precautions your store should take to avoid becoming another victim.

What is chargeback?

Chargeback is the term used to indicate when a payment is canceled after a purchase. In some cases, it may be simple to solve the problem, just cancel the purchase and not send the product. However, on many occasions it may already be too late and in many circumstances you may find yourself with nothing to do. The big problem lies between the approval of the payment and the moment the store receives this money. Let's use a practical example to make it easier to understand.

Let's assume that a customer has made a purchase from your online store. Payment was made by credit card, approved, and you have started picking items for shipping. The next day, you send the order, as requested, but for some reason the customer decides to cancel the purchase, but notifying the card operator and claiming a possible “fraud”.

This information will only be passed on to the store approximately two weeks after the cancellation of the purchase made via card – that is, at the time of receipt. But at this point you've already shipped the products, but you're left without payment and without the items.

In some cases, the purchase in question may have been caused by fraud, such as stolen credit and debit cards. However, there is a small portion who make purchases and later cancel them on purpose. This is a form of fraud in which the “smart customer” receives the products and also keeps the money.

This mechanism can occur for several reasons, such as unrecognized purchases (the case we exemplified above), transaction failures (the customer may claim that he did not receive the product) or even system errors.

How to avoid chargeback?

You can already see that this is a huge problem, right? Unfortunately, no online store is 100% safe from becoming another victim. However, some measures can help minimize losses and the possibilities of this happening.

The first step is to make data verification more efficient. If applicable, ask for purchase confirmations via telephone, at least on the first purchase. Another way to guard against fraud is to check purchases that have come about after many failed attempts or multiple purchases from the same register in a short period of time.

Another indication of fraud is the fact that the same account has many different credit cards registered. In general, people hardly have more than five cards in their family. For that reason, this is a case that deserves an extra check.

Still, it's important to make it clear that even these attempts to prevent fraud can end up resulting in some kind of chargeback. However, these simple precautions will certainly reduce the incidence of this type of scam in your store.

Don't hesitate to hire people on your team who can be responsible for finding these clues. Depending on your sales volume, expenses with an additional employee will certainly be less than the damage caused by chargebacks. Another tip is to resort to specialized companies that do this service outsourced.

Finally, keep all the necessary security tools in your virtual store to avoid hacker attacks or the exposure of your customers' sensitive data. There is little care when it comes to virtual fraud and your company needs to be covered in order not to succumb to most of them.