Thieves who buy items from your e-commerce site -- and then reverse the charges on the credit card they used -- not only cost
you money, they can even cause you to lose your merchant account due to "too much chargeback activity." You can be victimized
twice.
Big corporations have elaborate fraud-reduction systems to prevent this, but how can a small e-business best protect itself?
Neil Shearing, the owner of a business-support site called ScamFreeZone.com, says he found that he could reduce his chargebacks to almost nothing by taking a few simple steps:
1. PRE-AUTH. Credit-card processors ordinarily put through any transaction that initially registers as "authorized." But Shearing
recommends that you ask your processor for a "pre-auth" account. Orders placed at your Web site put a hold on a card, but
don't complete the charge. You must log on and approve each transaction within a few days.
2. APPROVAL. The advantage of this approach, Shearing says, is that you can catch most fraud before it becomes a chargeback.
Your first step is to check the Address Verification System (AVS) that your processor provides. If the AVS says the card's
security code, ZIP code, address, and country of issue all match, "you can be almost certain the transaction isn't fraudulent,"
Shearing found.
3. MISSING VERIFICATION. If any of the AVS fields don't verify, your next step is to check the address and phone number of
the customer yourself. "I'm pretty sure that if the phone number and the ZIP match each other, and they both match the customer
address I have on file, then the order is genuine," says Shearing. He uses Web services such as Mailer's Software (free),
555-1212.com (10 cents per lookup), and the RIPE U.K. Telephone Code Locator (free) to find this data online (see links below).
4. DOMAIN NAME VERIFICATION. Finally, if the customer's e-mail address suggests that he or she operates a Web site, use BetterWhois.com
to check it. "If you find the admin contact matches your customer name, you can be fairly certain that the order isn't fraudulent,"
Shearing says.
Taking these steps, without any expensive systems, "reduced my chargebacks to virtually zero," he reports. Eliminating the cost of fraud and the risk of losing his ability to accept credit cards entirely
more than pays for the verification time he spends.
His site grosses more than $100,000 each year, selling (among other things) the Internet Success Spider, highly regarded software
that helps you find "super-affiliates" who generate sales growth.
Information on ScamFreeZone and the Internet Success Spider is at: http://scamfreezone.com@a2.tc/4e7f
ZIP, address, and phone lookups are available at:
http://www.mailerssoftware.com@a6r.ms/5a37, http://www.555-1212.com@54.vg/65ef and http://www.ripe.net@th.gs/71a7
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ATTENTION, READERS: MY NEW NEW THING
I've just completed a major new project -- a free service that won't be formally announced until next week. I'd like you to
be among the first people to hear about it, though. So I invite you to get all the info by sending a blank e-mail message
to the following address:
mailto:project@brianlivingston.com
Put "new" in the subject line to help me sort the mail. I promise your address will never be sold, rented, or given out, and
I'll never send you any unrelated messages.
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E-BUSINESS BOOK REVIEW: COLOR ME CONSISTENT
Every Web site needs to display colors, and most Web sites also need a way to accurately print out color samples when creating
new pages for group approval. Beyond that, many e-businesses need the colors that show up on-screen to match what the consumer
sees in the final printed product, fabric, or what have you.
"Real World Color Management" is a new book that sheds light (literally) on the whole process from screen to press to happy
customer. Experts Bruce Fraser, Chris Murphy, and Fred Bunting expose the tricks of ICC profiles (established by the International
Color Consortium) and other techniques to help you deliver consistent quality. Their book has been out almost 30 days, but
it's still ranked in the Top 700 of Amazon.com bestsellers. That's great for a book with such a serious, technical focus.
For more information, see: http://www.amazon.com@n6.be/0201773406
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LIVINGSTON'S TOP 10 NEWS PICKS O' THE WEEK
1. Dude, you're gettin' a cell! Pot bust for Dell's ad spokesguy: http://www.thesmokinggun.com@5a0.tc/447
2. Chain stores to collect sales tax online; smaller sites next? http://www.washingtonpost.com@3n.be/82f
3. Shady e-tailers are outbidding legit businesses for top pay-per-click spots: http://www.iht.com@1c.to/c17
4. Gator settles ad suit with major sites, but pact is sealed: http://www.computerworld.com@e.la/fff
5. Even the fastest PCs are crawling under the load of the newest games: http://www.wired.com@31.dk/13e7
6. Half of the links go to 12 percent of the blogs, but that's life: http://www.shirky.com@836.as/17cf
7. A blogger says the above is NOT life, and not even accurate: http://weblog.burningbird.net@a6r.ms/1bb7
8. Five Java tools you've never heard of can help you big time: http://javaboutique.internet.com@th.gs/1f9f
9. HTML tips -- resize a pop-up window to fit an image's size: http://www.webmasterbase.com@54.vg/2387
10. Audioscrobbler digs your music, suggests artists you'd like: http://www.boingboing.net@a2.tc/276f
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WACKY WEB WEEK: EXCELLENT SQUIRREL-FISHING PHOTOS
It's not that the engineering students at Harvard have too much time on their hands or anything. But that's the most scientific
explanation I can come up with for the high-tech, high-quality work they've done in a study called Rodent Performance Evaluation.
Among the stunning insights revealed by the series of photos at this site is the answer to the question, "Can you make a squirrel
fall over backwards on a grassy lawn by tying a peanut to the end of a string and twirling it over his head?" You have to
see these images for yourself to understand how truly hilarious this experiment is. No squirrels were harmed, yada, yada ... See: http://www.eecs.harvard.edu@n6.be/c3af
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E-BUSINESS SECRETS: Our mission is to bring you such useful and thought-provoking information about the Web that you actually
look forward to reading your e-mail.
ABOUT THE AUTHOR: E-Business Secrets is written by InfoWorld contributing editor Brian Livingston: http://SecretsPro.com
Research director is Vickie Stevens. Brian has published 10 books, including:
Windows Me Secrets: http://www.amazon.com@isbn.at/0764534939
Windows 2000 Secrets: http://www.amazon.com@isbn.at/0764534130
You'll receive a gift certificate good for a book, CD, or DVD of your choice if you're the first to send Brian a Top Story
or Wacky Web Week he prints. mailto:Brian@SecretsPro.com
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