What is Magento Chargeback Protection?
Chargeback protection reduces the high risk of fraudulent debit or credit card transactions.
A high chargeback rate can put a strain on your business finances.
Disputing the chargeback is also a complicated process. Each case is specific to every credit card/debit card network. You have to have documented evidence of valid transactions to fight the disputes.
The process is tedious and affects business operations. A good solution to avoid these disputes is Magento chargeback protection.
It shifts the fraud payment disputes to a chargeback prevention provider. You can reduce fraudulent chargebacks & ensure financial certainty.
Overview of a ChargeBack
A chargeback is the customer filing for a return of their funds in dispute of a purchased transaction.
It is different from a store refund, where the merchant pays the refund directly. The credit card issuer processes a chargeback.
When the credit card company issues the chargeback, it can fall under categories such as:
- Fraud - Purchase is made without the buyer’s knowledge.
- Quality - The buyer did not receive the product they paid for.
- Technical -Friendly fraud where it was an honest mistake from the buyer.
- Clerical -The buyer was billed twice for the same product or other errors.
What is Magento ChargeBack Protection?
Magento ChargeBack protection is a service that delegates the chargeback disputes to a third-party provider.
The chargeback protection provider fights the disputes on your company’s behalf. It covers the cost of disputed funds and also the chargeback fee.
Chargeback protection inspects the store transactions & offers a chargeback guarantee. It also flags and blacklists the fraud customers that are attacking your site.
The services reduce fraudulent chargeback rates for your online store. Chargeback protection allows you to focus on core business aspects.
Fraud attacks are constantly coming up with new methods to win disputes. They may initiate a chargeback long after the transaction is done.
Even if you win a dispute, the card issuer can file a second case for the same transaction. If you don’t win the second dispute, your business may face more arbitration penalties.
It is essential to get Magento chargeback protection to avoid fraud. You can opt for extensions and services that offer chargeback protection.
Features to Look for in a Magento Fraud Protection Solution
1. Full ChargeBack Solution
Chargeback protection automates fraud detection. It reviews the customers’ orders and tells you whether to ship the item or not. That way, your store does not fall prey to malicious order attempts.
The chargeback solution offers a guarantee for order decisions. Check the SLAs for the services before choosing the provider.
Sometimes a fraudulent chargeback may slip detection. In such cases, the chargeback prevention provider covers the cost, not the retailer.
A full chargeback solution covers the following features:
- Automatic reviews on orders
- Fight disputes & submit evidence
- Quick fraud analysis of cases
- Create custom workflows
- Reimbursing the disputed amount
- Insights & reporting console
Full-service chargeback protection takes care of all tasks to prevent & fight disputes. In case a dispute is made, your store is not charged.
It analyzes customer behavior specific for your store to reduce chargebacks.
You may get different orders globally for many business sizes.
The provider should handle all types of transactions. In some services, you also get protection from cancellations & processing errors.
2. Customized Protection
The chargeback protection is customized for your Magento store. Check that it meets your industry standard and customer behaviors.
The market analysis for fraud should also match your target customers. You can add blacklist rules based on customer attributes. These can be names, contacts, or IP addresses.
The chargeback provider ensures not to block genuine customers. You can test simulations on the set blocking rules.
Some of the custom chargebacks protect features include:
- Create & manage custom policies
- Review workflows
- Blacklist fraud attacks
- Custom rules based on customer behavior
- Analysis & strikes on fraud suspicions
3. Automatic Fraud Detection & Alerts
The chargeback protection company automates back-office operations. It investigates & resolves chargebacks on your behalf.
Identify anomalies such as unauthorized resellers and promotion exploits. You can have a single dashboard view of all payment activities.
The provider should offer full transparency on order decisions. Your operations team can quickly get trends & insights into fraud. Get alerts on flagged transactions and e-commerce fraud attacks.
Fraud detection & Alert features for chargeback protection:
- Automated fraud detection
- Vast datasets on fraud globally
- Automated system anomaly detection
- Console for insights & reports
- Automate order flow
4. Manual & Expert Screening
A fraud analyst will review flagged transactions for the store. It requires expertise and the use of data-driven review models.
The primary goal of a fraud analyst is to approve maximum orders. That’s how you increase shipping and boost store revenue.
The experts are looking for concrete proof of fraudulent activity. They connect the dots on fraudulent orders & customer data.
Ensure that the chargeback provider has a thorough screening process. They should collect & use data to create more precise analysis.
5. Blacklist Customer Accounts
A blacklist or deny list is a form of access control. You can block certain customer accounts from placing orders.
The chargeback company looks for attributes that are known signs of fraud across orders. They decide on which orders to approve & decline.
Blacklisting can lead to the loss of genuine customers. It is a concern in the chargeback industry, as merchants lose revenue over declining legitimate orders.
It is essential to limit blacklisting. There are many ways you can accept more orders. Some of them include:
- Don’t deny refunds on lost or broken items
- Get signature on delivery on large volumes
- Add a customer friendly return policy
- Offer fast and free returns
Incorrect order declines do not help solve the chargeback issue. You may lose more revenue than preventing fraud attacks.
Accepting the majority of orders is recommended. If a fraud attempt is found, the chargeback company will pay the costs.
6. Scalable Protection
Look for a chargeback solution that can handle large volumes of orders. Your Magento store may have thousands of daily transactions.
The company should offer excellent support during peak traffic. They also review global transactions for various credit cards and payment processors. Inform the provider during flash sales or promotional events.
Magento offers many storefronts & omnichannel experiences. Ensure that the experts have the order details from all channels.
7. Up-to-Date Protection
The payment fraud attacks are constantly evolving. The attacks find new methods to create chargeback disputes.
Check that the chargeback company is using the latest tech. The team has to be up-to-date with chargeback trends & patterns.
They should provide near real-time protection & analysis on fraud attempts. Using AI and other e-commerce data networks allows you to combat chargebacks.
A suitable chargeback service will reduce fraud attempts. It helps you generate more revenue for the store.
How to Integrate Fraud Protection Into a Magento Store
Adding fraud prevention tools to your Magento store is simple. You can opt for a chargeback protection extension or service for Adobe Commerce.
- Choose the plugin or service for fraud protection
- Add your account information
- Monitor the orders on the console
- Get a user guide on how to analyze fraud trends
You also have to check how the chargeback services affect PCI compliance. Integrating any payment plugins should be well tested & assessed.
Take care of sensitive customer data and choose a reliable fraud protection service.
The plugins dashboard will display the order grid, order approval rate, and order trends.
Conclusion
Fraudulent charges on the store affect the business finances & create expenses.
Gathering evidence to fight chargebacks also affects store operations. Chargeback protection ensures that you reduce the fraud rate and get genuine orders for the store. It offers guaranteed fraud protection.
It automates order reviews using AI and machine learning metrics. The fraud experts help approve actual orders & flag the fraudulent ones.
Reducing ecommerce fraud attempts also allows you to improve conversion rates. You can securely create conversion funnels without being affected by chargebacks.
Magento lets you add your preferred chargeback protection service quickly.
Check out the MGT Commerce blog and gain insights on the Magento platform.
