| I have dealt with fraud prevention for non-physical goods both with PayPal and a merchant account. It's a small start-up, annual web orders of $1m, average purchase price of $16.50. We were hit pretty hard with fraud (when we first started, Aug/Sept 09) but we now have it down around 0.5%. I know you don't want a commercial offering but we had great success with maxmind (http://www.maxmind.com/app/ccfd_features) it costs about $0.015 per order. Here is how we did it... We tested every order through maxmind and using the fraud score we divided them in to three groups, low, medium and high risk. * Low risk orders were fulfilled as normal.
* Medium risk orders had to do an automated telephone verification (we used twillo for the calls, we mapped distances from area code to billing address and rejected voip numbers).
* High risk orders required one of our support staff to call and confirm the order. Recommended reading:
http://www.detectmalice.com/ However, I don't think stolen cards will be your main issue. Unless you have tracking numbers for all your shipped orders people are going to open claims with PayPal. PayPal always favor buyer and you will find people abusing the system. Be prepared for a lot of "Not as Described" claims because the item didn't match the users expectations. This isn't a one off, this happens often. |
Re: "Not as Described" -Given that our shipping solution offers package tracking with numbers, and signed-for options, AND the user will be clearly presented with an image, and a video of the goods; AND after first abuse, I will explain these things to paypal's customer rep, will their abuse still be considered legit?
Also, what if the item in question is only part of a service, and neither can work without the other? Will that change the claim-percentage at all?