Special Report: 4 Best Practices for Combating Online Fraud

• Require cardholders' signed proof of delivery for every credit card transaction in which the merchandise isn't delivered immediately at the point of sale.
• Stop recurring transactions that a cardholder canceled. Doing so will reduce the number of repetitive chargebacks by the same customer.
• Quickly process refunds to your customers' accounts, always using the same card number from the original sale. Never give a customer a refund by cash or check.

To minimize chargebacks, take steps to reduce your exposure to friendly fraud (i.e., when you receive a claim because the cardholder denies making the purchase or receiving the order, but the product was actually received). Clearly articulated terms and conditions that the customer must acknowledge at the outset provide an effective front-line deterrent. Follow this strategy with other safeguards, including confirmation emails, activation links and other online validations that require customer input or action.