Fraud Case Study

For who is run the online business. I have one alert in here wish to share with you. Don’t so happy when you receive an order and payment via a credit card / PayPal. Because that payment may come from fraud credit card. The payment or sales for you will be claim back from the bank coming 6 month ( 180 day). Why Wrong? You already ship according the actual order you received.
Ok. Here is the clear story of the any normal online transaction.
Customer is make the payment online because they wish to buy something form your website.
Login > order > make payment > received good shipment is there full story.
Do you found any happen in the order?
Yes. There are no actual meet up between you and your customer. So some people will think / plan to cheat you. You won’t face customer because this is internet business model. Customer visits your online store and makes payment in any time when there is convenience.
OK. Here is the important information.
All the credit card owner also have the right to request Card issue bank to dispute / refund the transaction in their Credit card transaction history within 180 day. This is the standard policy for all Visa /Master Card. The reason of dispute can be many.

Fraud transaction – card owner mention this is unauthorized payment. Reject to make payment according the amount
Unsatisfied of the product – product spec is different with your catalog.
Deliver shipment – Did not received your product. Shipment delay too long or Wrong product received
Unauthorized transaction - The payment is report to card issue bank as non-authorized transaction payment

Any one of the reason. Customer is able to call their issue bank to request a dispute & refund action. The report date is start form is accepted by bank within 180 days form the transaction date.
Any dispute case is reported. Bank will notice you mention the amount is on hold in your next incoming transaction or your account balance until the dispute close. Seller is require to submit the necessary supporting document eg. Product spec , product picture. Shipment details with deliver notice signature receipt.
End of the bank internal investigation action. There will come out only three result :

Card owner is require to paid the actual amount (20%)
Seller is force to refund the full amount to card owner (70%)
Bank will absorb the full amount. Seller continue get the payment and card owner is waive the payment due to bank absorb full amount (10%)

**Percentage is just a guide. Actual result is based on case by case.
For Online business. Is always not recommended to sale high risk product. Because just one dispute case. Will cost you lose a lot of money.

**High risk product include product like laptop, Camera or Jewelry those high reseller value item. As long as easy to sale with high value item.