Best Practices for Reducing Fraud-Related Chargebacks
Fraud disputes (Visa 10.4, Mastercard 4837, Discover UA05, etc.) drain profit faster than any other chargeback type. Below is a practical, merchant-tested playbook to keep those claims from happening in the first place—and to win the few that slip through.
1. Tighten the Front Door (Checkout)
Control | Why It Works | How to Implement Quickly |
AVS + CVV match required | Stops cards with stolen numbers but mismatched addresses. | Turn on “AVS = Y / Z only” in your gateway settings; require CVV pass. |
3-D Secure 2.0 on risky traffic | Shifts fraud liability to issuer after successful challenge. | Use your gateway’s rules engine to trigger 3DS on high-value or mismatched-country orders. |
Device fingerprinting | Flags repeated fraud devices instantly. | Integrate tools like FingerprintJS or your PSP’s built-in device ID. |
Checkout velocity limits | Catches bot bursts before authorisation. | Block > 3 attempts per card or IP in 5 minutes. |
2. Make the Charge Recognisable
Clear statement descriptors Use something the shopper will instantly know—“DRN COFFEE”. Avoid cryptic LLC names.
Post-payment email & SMS Send receipt + support contact within minutes; include descriptor reminder.
Dynamic descriptors (optional) If your processor allows, add the product name or order ID to the descriptor.
3. Validate Orders in Real Time
- BIN country ≠ Shipping country? Pause and request ID.
- IP address 2,000 km away from billing address? Trigger 3DS or manual review.
- Shipping to freight-forwarder ZIP codes (e.g., 33192, 97251)? Auto-flag.
- Unusual order stack—same card buying three gift cards in 60 seconds? Decline.
ChargeResolve Insights surfaces these red flags automatically under Fraud Signals.
4. Subscribe to Fraud Alerts
- Visa RDR – Issuer auto-refund before a chargeback files.
- Ethoca / CDRN – Near-real-time alerts from issuers outside RDR.
- ChargeResolve Automation – One toggle refunds (or auto-ship cancellation) the moment an alert lands.
Average merchants see a 40–60 % reduction in fraud-coded chargebacks after enabling alerts.
5. Build a Robust Evidence Arsenal
Evidence to store (see Template Settings) | Why it wins disputes |
IP address & geolocation | Proves shopper’s computer was in billing region. |
Device ID & browser string | Links multiple purchases to same legitimate device. |
3DS authentication log | Liability shift to issuer—instant win. |
Prior undisputed orders | Shows cardholder made successful purchases before. |
Address verification result | Confirms billing address belonged to cardholder. |
Upload these once—ChargeResolve auto-attaches them to every fraud dispute.
6. Monitor, Measure, Iterate
- Weekly KPI: Fraud-coded disputes ÷ total sales < 0.30 %.
- Insights widgets: Fraud vs. Friendly-Fraud ratio, Dispute heat map by BIN country.
- Quarterly audit: Review refund rate vs. unnecessary declines to keep conversion healthy.
7. Team Playbook
- Customer-service reps trained to spot phishing refund requests.
- Finance team reviews chargeback ratio monthly; escalate > 0.8 %.
- Dev team maintains the IP, email, and device blacklist via API.
8. Quick-Reference Checklist
☐ AVS + CVV hard fail set ☐ 3DS live on risky rules ☐ Descriptor matches store brand ☐ Real-time fraud alerts enabled ☐ Key evidence uploaded in Template Settings ☐ Weekly review of fraud KPIs
Need Help Implementing These Steps?
Email support@chargeresolve.com or open live chat—we’ll walk you through rule setup, descriptor changes, or alert activation so you can keep fraud-related chargebacks under control.