Dozens of U.S. cities had chargeback rates that exceeded the 1% threshold set by Visa and MasterCard. Within the Northeast region, there are 10 cities/ZIP codes with the highest chargeback statistics.
According to a Chargebacks911 analysis of 500,000 chargebacks and related transactions from ecommerce purchases made in 2013, dozens of U.S. cities had chargeback rates that exceeded the 1% threshold set by Visa and MasterCard. Within the Northeast region, the 10 cities/ZIP codes with the highest chargeback statistics include:
17% chargeback rate: Port Washington, NY (11050)
15% chargeback rate: Astoria, NY (11105)
13% chargeback rate: Plainview, NY (11803)
12% chargeback rate: Danvers, MA (01923); Carteret, NJ (07008); Point Pleasant Beach, NJ (08742); East Elmhurst, NY (11370); Massapequa Park, NY (11762); Albany, NY (12203); and Philadelphia, PA (19115)
The chargeback process was originally created as a form of consumer protection to provide recourse to individuals who were victims of identity theft, merchant errors or unethical business practices. However, some consumers have begun abusing the chargeback privilege and using it to obtain merchandise without paying for it, which is often referred to as friendly fraud, chargeback fraud or cyber-shoplifting.
Three of top tips for incoming orders:
Require a Card Security Code: For all credit card orders, be sure to obtain a valid card verification code (CVC). Not only does this help prevent cybercriminals from placing fraudulent orders with stolen card data, but it can serve as valuable evidence in a chargeback dispute.
Collect and Compare IP Addresses to Physical Addresses: By capturing a customer’s IP details, merchants can identify the physical location associated with an IP address and confirm if it matches the billing and/or shipping address. This information can be used to flag suspicious orders as well as help prove the legitimacy of a disputed transaction.
Use Both Automated and Manual Analysis: Manually approving all transactions can be costly and time consuming, while automated systems may decline legitimate orders or miss potential fraud. For optimal results, choose a risk management solution/partner that combines both advanced technology and human expertise.
Chargebacks911 is a division of Global Risk Technologies, and was developed specifically for merchants to offer immediate aid through proprietary technology and provide the necessary function that gives merchants the freedom to focus on their core competency and optimize their in-house skill set.
For data, background and forecasts on Chargebacks: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].