One of the biggest issues merchants increasingly face is friendly-fraud. Friendly-fraud is when a buyer disputes a legitimate transaction because of confusion, poor memory, or blatant abuse of the chargeback system. This behavior causes merchants to lose out on revenue or suffer the consequences of reputational damage. In response to this rising issue, Visa released new chargeback rules called the Compelling Evidence 3.0 (CE 3.0) rule set. Here’s what Visa’s new chargeback rules mean for merchants:
Visa’s CE 3.0 allows merchants to present past purchase evidence to verify that a legitimate cardholder knowingly made a purchase. These rules assume that if a buyer made authorized purchases that weren’t disputed in the past, the transaction in question isn’t fraudulent. They also allow evidence to be presented before a chargeback can be filed, potentially denying false fraud claims in advance. More detailed information can be found here.
In order to take advantage of CE 3.0, merchants must get their data collection in good shape to meet Visa’s standards and requirements for these new rules. Multiple data elements must match across evidence in order to be accepted, making organization essential. Merchants with high levels of friendly-fraud chargebacks and card-not-present (10.4) fraud disputes should prioritize strengthening their data collection systems and strategies as soon as possible!
If you’ve been losing out on revenue because of friendly-fraud, you can now protect yourself and your business in advance. The key to getting the most out of CE 3.0 is strengthening your data collection systems, which can mean partnering with third parties for assistance. Contact us to learn more about how we can help you improve business efficiencies during this time!
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