Significantly Reduce Chargebacks
October 2012 Integrated Solutions For Retailers
By Erin Harris, associate editor
A risk analysis platform helps online retailer CD Baby reduce chargebacks from 2.5% to 0.07%.
Payment fraud has long been a bigger problem for online retailers than their brick-and-mortar counterparts. Unlike an in-person sale, online transactions do not require a customer signature. According to the Merchant Risk Council (MRC), the current acceptable rate for chargebacks, both in-store and online, is 0.1%. Just like a cost of doing business, retailers will have to deal with some level of fraud, but once that level exceeds a certain threshold, Visa and MasterCard will dish out fines. If chargebacks get completely out of hand, retailers can lose their privilege to accept credit cards.
CD Baby, based in Portland, OR, is the largest online retailer of independent music. The company warehouses and digitizes music created by independent musicians. Recurring attacks cost CD Baby money and led the company’s controller, Christine Barnum, to conduct time-consuming investigations to research and rectify the fraudulent orders.
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