Shipping and Delivery Methods for High Risk Merchants

Shipping Policies and Delivery Methods for High Risk Merchants


Ecommerce, Telephone Order, Mail Order, and other Card Not Present merchants who physically ship product to the cardholder can reduce chargebacks and cardholder disputes by implementing shipping policies and delivery methods that minimize the risk of out right fraud or claims of non-delivery by the cardholder. Low cost and easy to implement changes to how a high risk merchant ships and delivers physical product can lower chargebacks and decrease cardholder disputes.

High risk merchants should require that all orders that have passed full AVS and CVV2 checks prior to shipping product. Orders returning a partial AVS match on the billing address associated with the credit card should be put through additional checks for fraud prior to authorization and shipping of product, such as Geo IP Address matching, telephone confirmation of the order, requiring the cardholder to use a non-public / free email address, and requiring the signature of the cardholder at delivery.

Merchants at a higher risk for chargebacks should only ship to the billing address of the credit card. Requests to deliver to a non-billing address can be an indicator of a fraudulent order. Delivery to a non-billing address opens the door to a cardholder dispute claim of non-delivery or unauthorized use of the card. If a merchant wants to allow delivery to a non-billing address, any order that requests delivery to a non-billing address should be put through additional checks for fraud prior to authorization and shipping of the product. Additional checks can include Geo IP Address matching, telephone confirmation of the order, requiring the cardholder to use a non-public / free email address, and requiring the signature of the cardholder at delivery.

High risk ecommerce, telephone order, mail order, or card not present merchants should only ship physical product via a delivery service or courier that requires signature on delivery and provides order tracking and delivery confirmation. Always require the signature of the cardholder only upon delivery. Getting the cardholder’s signature on delivery at the billing address of the credit card can reduce the cardholder’s ability to dispute on a claim of non-delivery.

High risk merchants shipping physical product should consider not shipping any orders to international cardholders or international addresses, as these orders can have a higher incidences of fraud and chargebacks. At a minimum high risk merchants should decline to ship to countries that are known sources of fraud, such as, Vietnam, Nigeria, Malaysia, etc. Most high risk merchant account providers should be able to provide a list of countries that they recommend blocking from accepting sales.

Any high dollar or unusual or international orders should be put through additional checks for fraud prior to authorization and shipping of the product. Additional checks can include Geo IP Address matching, telephone confirmation of the order, requiring the cardholder to use a non-public / free email address, and requiring the signature of the cardholder at delivery.

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