Merchants are always on the lookout for ways to curb credit card fraud, and one of the most common ways they’ve avoided chargebacks is by setting up a maximum amount of money they allow spent online. Since many fraudsters do frauds by buying large shipments of goodies, then cancelling the order after it’s been shipped, this can prevent thousands of dollars in loss. But, it also can prevent thousands of dollars in gain. This makes many people wonder if a maximum charge is a good idea. Here’s what CPS has to say about the subject.
Fact: Clients that spend an unusually high amount of money at your company’s site are more likely to be fraudsters.
The fact is that extraordinarily large quantities of any product or service is suspicious. Why are they buying so many? What would make them such an outlier? These “big bulk” buys tend to flag terminal security systems because they have a higher rate of frauds and chargebacks. As a result, yes, you should be wary of large charge amounts.
Fact: Barring all charges over a certain amount can make business hard.
It can turn off big spenders, and it may actually bar some legitimate buyers from getting goods at your store. However, you do have to actually come up with a way to be safe. Most experts suggest checking for ID and writing down a contact number or email with every major purchase made at your store. In some cases, having a blacklist for repeat offenders can also be a wise decision. In other words, your best bet is to make this an “alarm bell” that makes you do extra security measures that verify a person’s identity.
Fact: The problem is that what’s considered a large purchase in one store may be a small purchase in another store.
A $200 purchase would be enough to make a dollar store employee raise an eyebrow in many cases. However, if you’re selling Fendi purses, your staff members would probably sneer at a price tag that small. By the time you’ve been in business for a long while, you probably already will know what would be an unusually large amount is. It’s up to you to determine where to draw the line.
If you are worried about fraudulent charges and chargebacks, having the right e-commerce platform can help you prevent damage from being done. Call CPS if you want to add more security to your company’s shop site.