What a fraudulent transaction is
A fraudulent transaction is a transaction made with a payment card that was not authorised by its holder. Such a transaction arises when the card details are misused by an unauthorised person, or when a lost or stolen payment card is used for the purchase.
How to recognise a fraudulent transaction
A transaction may be fraudulent if it meets one or more risk parameters:
a high-value order from a new customer;
an order that includes several variants of the same kind of goods;
an order consisting of an expensive, easily resold item;
an order with express delivery or an order placed late at night;
several orders with a single delivery address;
a free e-mail address is used for the order;
an order with an unusual delivery address.
If an order looks doubtful to you at first sight, it will probably be a fraudulent transaction. You will find how to proceed in that situation below in the section “Do you suspect a fraudulent transaction?”.
What a chargeback is
A chargeback is a request to return a payment that was made with a payment card. It is raised by the cardholder, who disputes that the transaction was legitimate. A chargeback can arise regardless of the range of goods you offer.
The most common reasons why chargebacks arise
We usually come across the causes below, which lead to a chargeback:
technical matters (duplicate payment, technical problems during payment);
a customer dispute (the goods or service were not delivered, late delivery, the customer received different goods from those ordered, incorrect dispatch);
payment card misuse (a fraudulent transaction).
What the difference between fraud and a chargeback is
Fraud is a notification that the cardholder did not make the transaction or does not recognise it. A chargeback is a customer dispute and it has a financial impact - a fee under the applicable fee schedule goes with a chargeback.
Preventing fraud and chargebacks
If your merchant outlet accepts payment cards, you need to pay attention to preventing fraudulent transactions and chargebacks.
Prevention matters for several reasons:
if a chargeback is disputed unsuccessfully, the funds for the order that you received into your business account are debited back to the holder's card;
a fee goes with a chargeback;
the card schemes monitor the number of fraudulent transactions and chargebacks at individual merchant outlets.
Fortunately, these situations can be prevented.
Fraudulent transactions can be prevented, for example, by checking orders with risk parameters more thoroughly before dispatch (where the nature of your product allows it), or by setting up one of the security measures on the payment gateway, such as limiting payment card acceptance to selected regions or limiting the maximum payment amount. Please contact your account manager about the specific settings.
You can minimise the risk of a chargeback by giving detailed information and showing the details of the product offered on your website, by setting reasonable delivery times, by delivering reliably, by providing good customer support and by handling customer disputes quickly and carefully. Always keep the contact details at your merchant outlet up to date. Last but not least, clear and unambiguous general terms and conditions, prominently placed and including the complaints and cancellation terms, matter too. The customer has to agree to these terms, and that has to be recorded, for example using a checkbox the customer ticks before sending and paying for the order. A link to the relevant terms has to be included as well.
Do you suspect a fraudulent transaction?
If a transaction looks suspicious to you, the best way to start checking is to contact the customer by telephone and at the same time verify that their address exists. If in doubt, you can propose a different method of payment (cash on delivery, bank transfer). You can also contact us at the e-mail address risk@gopay.cz. If you decide to return the payment to the holder's card, you need to do so as soon as possible so that a chargeback does not arise in the meantime.
💡 GoPay's tip: A chargeback can be prevented by returning the payment using the original payment method, that is, by a refund from your business account in the GoPay payment system. You will find instructions on how to return a payment correctly HERE.
If you are unable to return the payment, do not hesitate to ask us for help with the return at podpora@gopay.cz.
Have you received information about a chargeback or a request to supply documentation for a payment?
How successfully a chargeback or dispute can be challenged depends on the quality of the documents supplied. The content of the documentation required depends on the reason for the dispute (what is called the reason code). It may be, for example, a dispute about goods that were not delivered, a duplicate payment and so on. The requirements for the documents to be supplied are always part of the notification you receive from us; we give some examples below in the section “General requirements for the documentation supplied”.
💡 GoPay's tip: Once you have been notified of a chargeback or asked to supply documentation, do not return the payment any more and do not provide the undelivered performance either.
To challenge a chargeback successfully you need to respond in time. If the documentation is not sufficient or is not supplied within the set deadline, the chargeback and the related fee under the Fee schedule are usually debited from your business account.
General requirements for the documentation supplied
If a chargeback does arise after all, we will send you a summary e-mail with instructions and an overview of the documentation required. Ideally send us the documentation in Czech or English.
The content of the documentation required depends on the nature of the order:
for physical goods - the invoice, the order, the tax document, proof that the goods were dispatched to the address requested (including the consignment number and the customer's signature on the handover protocol);
for an offline service - the date the service started being used, a copy of the contract, the order and so on;
for an online product or service - the order, information proving that the cardholder gained access to or downloaded the digital content purchased, an extract from your administration (this information may include IP addresses, logs and so on);
for duplicate processing (two different proofs of product distribution confirming that both payments were justified).