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Roni Bolana

The post-payment psychological affect

Turning our focus to the Post Payment is already in itself a shift in the way we perceive the business process, that is a mental operation. By looking at the transaction from the point that until now was considered an end point, allows both the merchant and the customer to see things in a new way that leads to more transactions being completed. Generally speaking, we can consider these changes as psychological and they apply to both sides of the transaction:

The main thing we need to consider here are the psychological effects of rejection. If you have ever been in a situation where your card was declined for no good reason, you are well aware of the odd mix of humiliation and indignation that one feels. This is to say that any decline should be well considered as false positives cause serious disaffection and most likely will lead to life time loss of customer value.

FUGU is highly valuable in this area as the tools it offers make it safe to continue working on the transaction while constantly reducing the probability of chargeback and virtually diminishing the possibility of losing a fraudulent dispute as all communications are analyzed and collected and can eventually be turned over as evidence.

Customer Perspective:

From the customer perspective a distinct shift takes place after the payment, when all the steps taken to make the transaction happen are framed as customer care. This is diametrically opposed to the situation before the payment where all these inquiries and challenges are endured as challenges. After the payment the process is at its most collaborative and offering such customer care can go a long way from driving the customer towards the eCommerce giants, who can afford to be less suspicious for a variety of reasons.

Merchant Perspective:

The most notable shift that FUGU allows from the merchant perspective has to do with fear of fraud. Fear of loss is well founded, even a small amount of disputes can cause major headaches, beyond the material loss the Credit Card industry can be very punishing towards small and medium operations. This leads to a quite justified fear of chargeback that in turn causes merchants (or gateways) to impose strict rules combatting fraud. These rules more often than not, turn out to be “too” effective causing fraud rates to come down while generating an unmeasured number of “false positives”. These denial are perhaps justified without the right tools like the one we offer, that gives you peace of mind, reducing fraud, while enabling more transactions.

How Banks Investigate Unauthorized Transactions and Fraud

Banking institutes work overtime to investigate unauthorized transactions and prevent fraud, and they’ve certainly got their work cut out for them. Particularly now, in the age of digital banking, fraud comes in many shapes and sizes.

To help you better understand unauthorized charges and fraudulent transactions, this post will explore how banks go about investigating these types of nefarious activities.

The Fraud Investigation Process

Do banks really investigate disputes?

Yes, they do. Here are the typical steps banks follow during a fraud investigation:

Investigation request

Some fraud investigations are triggered by a bank’s automated systems, while others are instigated by a customer inquiry. Whichever the case, the commencement of an investigatory process begins with the lodgment of an investigation request.

Evaluation process

The nuts and bolts of bank fraud investigations involve the bank evaluating the evidence and transactional history recorded on their systems. Banks will scour through transactional factors like geolocation, timestamps, device IP addresses, and credit card or account history.


Once an investigation has concluded, the customer will be contacted by the bank and provided with a summary of the investigation. If nefarious activity was detected and unauthorized transactions were carried out, the customer will be refunded the amount missing from their account in full.

In the event that something more sinister has been carried out, such as identity theft, banks will hand over the information to the authorities, and the police will carry out their own investigation.

How Long Do Bank Fraud Investigations Take?

By law, most banking institutes are held to a 10 business day deadline. Within this period, a formal investigation must be conducted to determine whether or not fraudulent activity has been carried out.

Usually, investigations are concluded within this time frame.

If, for whatever reason, an institute needs longer than 10 days to carry out a bank fraud investigation, the bank will temporarily refund the customer’s account with provisional credit.

Refunding Credit Card Fraud vs. Debit Card Fraud

As most credit card issuers offer a zero-fraud liability, the refund process for credit card fraud is fairly simple. If someone gets hold of a credit card number and makes an unauthorized transaction, your chances of getting a refund are very high.

On the other hand, debit card theft investigations are a little different. Sometimes, a debit card or atm fraud investigation process won’t result in a customer receiving a refund, as many banking institutes don’t offer the same level of protection that they offer credit card holders.

Can Fraud Be Prevented?

With many transactions being processed through a business account, fraud isn’t always the easiest thing to keep on top of. Thankfully, with the help of a fraud prevention tool like FUGU, avoiding fraud has never been easier.

FUGU prevents fraudulent transactions by detecting inconsistencies in your online banking and also employs various safeguard strategies that both protect your business accounts and its bottom line.

With FUGU, the threat of unauthorized transactions or fraudulent activities is drastically reduced.

Return Item Chargebacks: What Merchants Need to Know

In most cases, a chargeback is when a financial institution reverses a fraudulent debit card transaction. So are return item chargebacks the same as regular chargebacks?

Misleadingly, return item chargebacks aren’t what you might think they are.

Allow us to explain.

What Is and Is Not a Return Item Chargeback

Unlike a chargeback that an account holder lodges to dispute an illegitimate or fraudulent credit card charge, a return item chargeback is a fee charged to a banking customer once they deposit a check that bounces.

To make things even more confusing, there isn’t even a universally accepted term for this occurrence.

How Banks Define “Return Item Chargeback”

To hear it straight from the horse’s mouth, let’s look at how one of the biggest bank in the US, the Bank of America, defines a return item chargeback on a check. Their returned payment definition is:

We charge this fee each time a check or other item that we either cashed for you or accepted for deposit to your account is returned to us unpaid.

Here are a few more names that you’ll often see banks use to categorize this type of fee:

  • Deposited item returned fee
  • Cashed item returned fee
  • Rejected check fee
  • Rejected item chargeback
  • Bounced check fee
  • Return of deposited or cashed item fee

How Return Item Chargebacks Affect Merchants

Although becoming less and less commonplace, customers will sometimes prefer to pay for your products or services with a check. While depositing a customer’s check, there may come a time when that customer doesn’t have sufficient funds in their account and the check bounces. If this happens, not only will the person who issued the check be charged a fee by their bank, but your business account is also likely to be charged as well.

Fraudulent vs. Legitimate Return Item Chargebacks

Thankfully, return item chargeback fees are fairly easy to spot. Once you’ve deposited a check, the amount designated will appear in your bank account. If the deposited check is returned unpaid, this amount will be withdrawn from your account with the addition of a fee – usually $10-15. For example, if a check worth $189.50 bounces, the bank will withdraw the money plus the fee. So, in this case, a fee of $10 would make the withdrawn amount $199.50.

Unfortunately, though, return item chargebacks are an area of the banking system that nefarious individuals often take advantage of. Therefore, it’s important to keep a keen eye on your business account for any fraudulent activity. If you suspect fraudulent activity happening to your account, contact your bank with the relevant information as soon as possible.

Can Fraudulent Chargebacks Be Disputed and Prevented?

Return item chargeback fraud is not a new practice, but it is a growing threat to businesses. The good news is that there are steps that companies can take to prevent and dispute return fraud.

To read more about how fraudulent chargebacks can be disputed, and ultimately prevented, see our Tips to Prevent E-Commerce Chargebacks.

E-Commerce Chargebacks: How to Dispute Them and 5 Tips for Prevention

A chargeback is a process where a customer can dispute any charge with their credit card issuer, cases are judged by credit card companies, often costing online sellers the goods, the payment, and substantial chargeback fees

Unfortunately, chargebacks have become common in the e-commerce sector. To help you avoid the potential damage posed by chargeback, we’ll break down for you what happens when a customer disputes a charge, and how to prevent chargeback fraud.

Why Could E-Commerce Chargebacks Occur?

E-commerce chargebacks can be caused by several legitimate reasons and for many illegitimate ones, merchants receive the dispute and are required to respond in order not to lose by default.

  • An unauthorized transaction was charged to a cardholder’s account.
  • The goods or services were not as described.
  • The goods or services were not received.
  • The transaction was processed multiple times.

Are All E-Commerce Chargebacks Worth Disputing?

Not all, but certainly some e-commerce charges are worth disputing – particularly if they appear to be lodged in bad faith.

If you deem a chargeback to be illegitimate, as an online business owner, you’re well within your right to dispute them. Legitimate chargeback requests can be handled easily, but illegitimate ones can be troublesome and should not be neglected. In order to prevent fraudulent or unauthorized chargebacks, follow the steps below:

  1. Work within the deadline for filing your chargeback dispute.
  2. Make a record of all your customer transaction details.
  3. Gather evidence related to the dispute.
  4. Submit the evidence to the acquirer.
  5. Use a chargeback rebuttal letter to detail your rebuttal in writing.
  6. Finally, await the decision.

5 Ways to Prevent Chargeback Occurrences

To help reduce and protect against e-commerce chargebacks, or prevent chargeback fraud, here’s a short list of some tips and tricks to help you out:

  1. Customer service

Having a team that can resolve the issue efficiently will prevent chargeback recurrences.

2. Shipping options

It is important to offer a secure shipping option that ensures the customer feels confident in their package arriving safely.

3. Customer satisfaction

It is key that you have a positive track record of handling customer disputes. This will ensure that customers will not be likely to file a chargeback.

4. Fraud detection

Have a robust fraud detection system in place, such as FUGU, to prevent chargebacks due to fraudulent transactions.

5. Order and transaction tracking

All orders and transactions should be monitored on a continual basis. That way, if a dispute arises, the transaction or order history is easily accessible and, if needed, a dispute can be lodged.

Contact FUGU Today

Remember, the most common chargebacks are related to customer dissatisfaction, and solving this will go a long way in preventing chargebacks. If you’re looking for a solution to fight chargebacks and ensure that they aren’t a result of your company’s error, contact the Fugu team today to schedule a demo and learn about how our chargeback prevention method can help you.

E-Commerce Fraud: Types, Detection, and Prevention Best Practices

E-commerce fraud, a broad phrase used to describe specific activities involving online fraud or scams, makes use of the internet to obtain traffic in fraudulently acquired assets. This type of fraud poses a serious risk to an online merchant’s business. Not only can e-commerce fraud cause financial loss, but it can also be disruptive to business operations and carry serious legal and reputational consequences.

To help you and your business become victims of fraudulent activity, this post will explain the main types of retail fraud and detail effective e-commerce fraud prevention techniques.

Table of Contents

How Is E-commerce Fraud Committed?

  1. Payment Fraud
  2. Friendly Fraud
  1. iii. Account Takeover Fraud
  2. Prevention of E-commerce Fraud
  3. Stay Safe From E-commerce Fraud

How Is E-commerce Fraud Committed?

E-commerce fraud is committed in various ways. The basic idea involves nefarious actors carrying out criminal deception during an internet transaction, defrauding either the customer, the ecommerce merchant themselves, or a third-party in the process.

The three main types of commerce scams that are frequently leveraged by fraudsters are discussed below:

1. Payment Fraud

E-commerce payment fraud is any fraudulent activity aimed at getting unauthorized access to consumer information and accounts or obtaining goods and services without paying for them. E-commerce payment fraud can happen at any point between the consumer, the merchant, and the bank. For example, a hacker may get their hands on a customer’s credit card details and make unauthorized purchases – an activity known as e-commerce credit card fraud.

2. Friendly Fraud

E-commerce friendly fraud involves the fraudster making a purchase from a store, receiving the product, and filing an unauthorized credit card chargeback – claiming that the product was in some way faulty, damaged, or never arrived. The credit card administrator, in most cases a bank, determines that a legitimate chargeback claim has been filed, refunds the cost of the transaction, and subsequently the fraudster keeps both the goods and the original purchase amount.

3. Account Takeover Fraud

Account takeover fraud involves obtaining sensitive information like passwords, financial credentials, and payment information of a customer at an e-commerce website via various methods (such as phishing schemes or purchased on the dark web) to take control of a user’s account. The method of attack usually involves the perpetrators sending emails, making phone calls, or sending text messages to the victim that carry attached viruses files. This allows them to either change the details of the victim’s account, obtain access to other accounts owned by the user, make purchases using their funds, or even directly withdraw their money.

How to Prevent E-Commerce Fraud

There are several effective e-commerce fraud solutions and e-commerce fraud protection tools that you can employ to minimize the risks posed by e-commerce fraudsters, such as the following:

  • Use a tool like FUGU to help identify and prevent fraud.
  • Leverage SSL (Secure Socket Layer) encryption to protect your customers’ information.
  • Make use of a third-party password manager to keep all your passwords safe.
  • Check the order’s IP address to ensure the purchaser is in the same country as their selected credit card using monitoring capabilities like those possessed by FUGU.
  • Track transaction data, card numbers, billing and shipping addresses, and device signatures with fraud prediction capabilities like those of FUGU.

Stay Safe From E-Commerce Fraud

As online e-commerce transactions become more and more common, it is vital to protect your business from fraudulent activity. Thankfully though, with the fraud management and protection strategies detailed here, you can be sure to minimize and mitigate the risks posed by e-commerce fraud.

New FUGU Updates

FUGU Updates

Making sure no order is declined for the wrong reason


  • Map for points of interest

  • Customer verifications preview .

  • Initiate a reamaze message to customer.

  • Facelift for verification web app

 Contact us if you have suggestions for improvements

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The Role of post -payment monitoring in immediate and proportional response to eCommerce fraud attacks

Most recently we have been asked by a large online fashion retailer to help them handle a continuous fraud attack, where more than 1000 orders worth $85K were sent to a specific industrial zone in Florida. Most of these were not identified by the Shopify Risk prediction model.

Prior to contacting us, the customer implemented a first aid measure, putting in place a basic rule engine blocking all orders shipped to that specific city. Our first action was to have our risk experts run a simulation recreating the last month’s orders, one by one, allowing FUGU’s unique velocity checks to identify the root fraud pattern in this specific case. (The importance of velocity checks)

Turns out the root cause was the heavy use of a series of debit cards issued with specific BINS by a certain issuer.    We immediately added this insight into our post-payment risk prediction model, automatically blocking all orders shipped to Florida using that specific credit card type.

We also noticed that several other credit card types were used to send merchandise to the same PO Box but they seemed to be 100% valid.

We then suggested a quick and easy fix: to deploy a fulfillment process change so that their superfast fulfilment process would be separated into two routes:

    A.     Fast lane covering 95% of the cases categorized by FUGU initial risk scoring as low risk

  B.     Delayed delivery lane covering 5% of the cases in which FUGU identified as  high risk.

This method allows FUGU’s platform to profile the transaction and distinguish between fraud and valid transactions sent to a PO BOX for valid reasons.

And we found quite a few of those:

Our findings were stunning ,  turns out this specific brand has a large community of fans in Honduras and Columbia that ship to a logistic warehouse In order to save the international shipping costs

We also found several very loyal customers apparently living in the same city that was previously blocked.

All in all we were able to recover 50% of the transactions previously discriminated against based on their address.

The funny thing is that around 60 days after the client began using FUGU the Shopify fraud recommendation started recognizing what FUGU recognized right away, but still with around 50% false declines.

As we Say in FUGU, Every Payments Counts, in this case ruling out shipments to  PO Boxes is easy but leaves disappointed customers unattended. It  simply makes perfect sense to try to verify these transactions rather than simply saying NO. Our automated post-payment transaction verification does exactly that.

FUGU is a new breed of payment fraud solution tracking payments post-checkout, helping merchants safely accept transactions they currently lose to fraud, false declines, and payment churn.

FUGU offers a multi-tier self-learning fraud prevention solution, fighting a wide variety of risk patterns at various points along the transaction life cycle using automatic customer verifications (KYC), pre-shipment consumer behavior scoring and chargeback representations.

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