This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
I have been researching and gathering statistics about online credit card fraud and the effect of online transaction charge backs. While the numbers indicate that I need to factor in fraud costs into our business plan, it is unclear what to expect. I would be interested to know some real life experience? Recently, I had a meeting with a company who claimed to suffer between 40-50% fraud. This was mainly due to transactions being charged back at the end of each month as the card owner identity could not be verified. Look forward to some discussion and possible solutions. Cheers
GAV
I don't have alot of internet sales, but I've never had a chargeback.
I use the virtual terminal for phone orders, and face to face orders as well.
It require the same information for those orders as for the web orders.
Besides the usual credit card number, and expiration date, I have to enter the full name, full billing address for the card, and the 3 digit security number.
I have it set up that way because I think the more information you require to verify the transaction, the less problems you'll incur.
40 to 50% is outrageous, really. We never even came close to that in the restaurant business.
Hi Gav, I know we are all based in different countries, but a company that suffers 40-50% credit fraud, sounds like it is run by incompetents. If that were the case, the bank would have long since pulled their credit card facility.
Some types of business are more prone to credit card fraud than others, but even as a worst case scenario, you'd certainly be looking at a figure that was at most, just a couple of percent.
Hi Will, My research does not support that figure. A recent report indicates 3-4% online credit card fraud of which approximately 30% are charge backs due to identity of purchaser not being verified. I have also found software that monitors this and can even make claims against charges back. Thanks GAV
Hi Gav. It really does depend on what you are selling. I know those selling mobile phones are particularly prone to online fraud, as are the people selling sat navs etc. These are relatively high value items that can be quickly sold on.
All of my transactions are done though an online payment gateway that take all the risks. It then becomes their responsibility to verify the card holder identity.
Online Credit Card Fraud 
