Chargebacks are a way for credit card companies to protect consumers from fraud, but they can be costly to your organization. Read on to learn what chargebacks are and how you can protect your donation forms from bad actors.
Contents:
What is a chargeback?
A chargeback (you may also hear it referred to as a reversal) is a form of protection that allows cardholders to file a complaint regarding fraudulent transactions on their credit card statement. Once a cardholder files a dispute, the issuing bank makes an investigation into the complaint.
If a transaction is proven to be fraudulent, the bank will refund the original value to the cardholder. If you do not prove the transaction to be legitimate, the bank will take back the entire value of the transaction from your account, along with an additional fee.
Although there's no way to completely prevent fraud on the account, especially without affecting real donors, we do have procedures in place to alert us and block where we can.
What does Qgiv do to prevent fraud?
- We vet transactions based on the Address Verification System (AVS). If the numbers in the address do not match, the transaction is declined. This is highly dependent on the issuing card company.
- Transactions are verified based on card number, expiration date, and CVV match.
- We have triggers in place that block senders from the same IP address if there is a certain number or percentage of declines in a given period of time from that address.
- To deter card testers, you can increase your form's minimum donation amount in the form settings.
What can you do?
If you see something that looks fishy, you can void the transaction on the same day or refund it after the void option is no longer available. If you void or refund before the actual cardholder disputes it, we can contest the chargeback so that the transaction amount won't be taken from your account twice.
Please note: The processor won’t refund the $15 fee for the chargeback. This is considered the “cost of doing business” and is something that is being passed along. Please be aware that is fee is coming from your merchant process, not from Qgiv.
Unfortunately, there are more advanced testers who can easily change their IP address from transaction to transaction. In addition, if someone has all of the card information AND the address is correct, or if they have an issuing card company that chooses to ignore it, there is no reasonable way to block it without potentially affecting real donors. Your best bet is to practice good accounting and keep a close eye on your transactions to catch anything that seems off. That way you can void or refund quickly!
To read more about fraud prevention, check out this article.
If you have any questions, don’t hesitate to contact us!