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Best Practises and RED FLAGS

to Avoid Credit Card Charge Backs

by Stefano Corradini, Baseline Payments

redit card chargebacks — which occur 2. Know Your Clients 3. Mismatched billing and shipping
Cwhen a transaction is disputed by the • Carefully evaluate new customers placing addresses. While sometimes legitimate,
cardholder or their card-issuing bank — are high-value orders for single items. these require additional verification. AVS
a costly reality for businesses. There are • Maintain a record of problematic customers results (full, partial, or no match) help flag
many reasons why chargebacks happen, to identify high-risk activity, block specific potential risks.
including returned merchandise, canceled card numbers, and prevent repeat issues. 4. Rush or overnight delivery requests for
services, billing disputes, errors, fraud, or expensive items, especially from new
theft. If the issuer considers the dispute valid, 3. Keep Accurate Documentation customers. Fraudsters often pay extra
the merchant must refund the transaction • Retain invoices, receipts, shipping to receive goods before the cardholder
amount and also pay a chargeback fee to the confirmations, and customer notices suspicious activity.
payment processor. A business’s exposure communications. These records are critical 5. Repeated attempts with incorrect card
to online fraud and chargebacks depends if you need to dispute a chargeback. numbers or expiration dates. This often
largely on its policies, operational practices, • For high-value shipments, require a indicates the card is not physically present
and fraud prevention tools. Preventing delivery signature. and could signal fraudulent activity.
chargebacks requires a combination of clear
communication, strong payment practices, 4. Maintain Good Customer Service How Baseline Payments Can Help
and proactive dispute management. Below • Respond promptly to inquiries, complaints, Baseline Payments provides businesses
are some effective strategies and red flags to and refund requests. with tools and insights to reduce chargebacks
be aware of: • Offer simple refund options to resolve at the source. Our solutions integrate
disputes before they escalate into fraud detection measures such as AVS and
Chargeback Best Practices chargebacks. CVV verification, clear billing descriptor
• Ship products quickly and provide accurate management, and detailed reporting to
1. Use Strong Verification Tools tracking information. identify recurring dispute patterns. By
• Enable AVS (Address Verification System) combining secure payment processing
and CVV (Card Verification Value) in your Chargeback Red Flags with actionable data, we help merchants
processing to confirm that the cardholder significantly lower chargebacks — whether
has the card and that the billing address is 1. Large bulk orders with higher-than-average related to fraud, customer misunderstanding,
accurate. dollar values. Fraudsters often try to or fulfillment issues.
• Consider 3D Secure tools (e.g., Verified by maximize stolen card use in a short time This structured approach not only reduces
Visa, Mastercard SecureCode, where texts frame. financial losses but also builds long-term
containing a code are sent to a mobile 2. Multiple orders in quick succession from customer trust.
phone) for added authentication. the same customer, which may suggest Reach out to Stefano Corradini at
• Monitor high-risk transactions, such as unauthorized card use. Limiting stefano@baselinepayments.com or call
unusually large orders, mismatched transactions per hour, day, or week can 778-926-1805.
addresses, or multiple declined attempts. reduce risk.

www.lbmao.on.ca LBMAO Reporter - September-October 2025 15