How Internet Marketers Can Protect Themselves Against Fraud

You are in the business of selling, regardless of what your product or service is. Perhaps you sell widgets and ship them to customers; offer ebooks for automatic online download or provide consulting services.

Whatever your business, as an internet marketer, you come face to face with potential fraud on a daily basis. One of the mainstays of online business is credit cards - in effect, they are the lifeline of our online business ventures.

Accepting online payments naturally puts ecommerce at higher risk for fraudulent chargebacks. Unfortunately, history has proven that in the world of ecommerce, the business generally loses out in chargeback cases.

The truth is that most companies, online or otherwise, do not take the necessary precautions to protect themselves from criminals and fraudulent charges. Although it costs just a few cents more per customer, most e-businesses instead opt for using cheaper credit card processing companies that do not authenticate the purchaser as the true owner of the credit card.

Consider the following staggering facts that will affect your internet marketing business - maybe not today - but it will:

* In 2006 alone, 38 million credit cards were stolen.
* Each year, fraud losses in ecommerce averages between 1.5% and 3% of total gross revenues.
* E-commerce sales are growing at the astounding annual rate of 25% - 30%
* In 2006, fraud losses totaled more than $3 Billion despite the valiant efforts of the credit card industry to implement new deterrents and measures.
It is sad but true that no matter how hard you try to eliminate fraud, there are criminals who will find a loophole. Still, there are a few basic measures that you can take to protect your business and yourself.

Use an Online Credit Card Processing Company that is Diligent Against Fraud

When you are choosing a company to handle your merchant processing online, choose one with a great track record of helping merchants. Many automatically side with the buyer and you are out of luck. The good companies also go to great lengths to electronically verify customers' information at the purchase point by matching addresses and telephone numbers to credit card statements, and insisting on the customer inputting the 3 digit PIN code from the back of the credit card. A criminal who has phished for credit card numbers online will not have access to this PIN code.

Verify online purchases with the purchaser only

If you cannot make contact with your customer by phone or email, cancel the order and send a response explaining why the purchase was cancelled. Don't make the assumption that a website is simply a tool to automate the purchasing process. Criminals rely on this assumption and exploit it often.

Return and Refund Practices Must be Published

In order to protect yourself against a credit card chargeback, you must be sure your clients are aware of your policies. If you have a 30-day return or refund policy, make sure this information is published and also included in the purchase confirmation email that you send to your customer.

This protects you when a customer tries to claim a chargeback three months down the road. If your electronic goods are sold on a 'final sale' basis, make sure this information is clearly known to your buyers. Also, you must be able to prove that electronic goods are received by your client, which is why an online download site that tracks your buyer and their IP is preferred over documents that are delivered via email.

While it is almost impossible to entirely avoid fraud while marketing online, the steps above will go a long way towards reducing such risks.

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