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Best Practices for Reducing Fraud-Related Chargebacks

Practical steps to prevent and defeat fraud-coded chargebacks before disputes escalate.

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

  1. BIN country ≠ Shipping country? Pause and request ID.
  1. IP address 2,000 km away from billing address? Trigger 3DS or manual review.
  1. Shipping to freight-forwarder ZIP codes (e.g., 33192, 97251)? Auto-flag.
  1. 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

  1. Customer-service reps trained to spot phishing refund requests.
  1. Finance team reviews chargeback ratio monthly; escalate > 0.8 %.
  1. 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.

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