|
|
This
advice is intended for informational purposes
only. All Advice is offered 'as-is'. WebGunForHire
makes no claims as to the accuracy or
validity of this advice. Advice freely
given may well be worth the price charged
for it.
Subj:
Requiring Credit Cards to Secure Online
Auction Bids
Alexis
asked some questions about this plan:
"For example when doing online auctions
if a potential buyer wants to place
a bid he/she is requested to input
his/her credit card information and
x amount of money from its
available credit line is put on hold
to guarantee that the customer will
honor its obligations if it wins the
bid. If the customer does not win
the bid this amount is automatically
freed."
IMHO
the credit-card guarantee is a bad
idea. People don't like to submit
their credit card numbers online for
anything unless they absolutely have
to, including guaranteeing a bid they
may have every intention of paying.
I don't think there's a single major
auction site out there that uses this
format, and for good reason: It would
greatly decrease the number of people
bidding, as you're making the visitor
work too much just to place a bid.
Yes,
many auction sites suffer from successful
bidders who then back out of the transaction
after they win the bid. But there
are other ways of dealing with this
than a credit card-backed 'guarantee
of payment', which will greatly reduce
the number of active bidders overall.
Not only that but even after a 'successful'
bid the payee (seller) is NOT entitled
to payment: Credit card rules require
that the merchant has actually fulfilled
the order before they can submit a
payment claim, unless it's an 'immediately
fulfilled' product such as a subscription
or downloaded software, in which case
the merchant can request immediate
payment.
--WebGunForHire,
06/00
|
WebGun's
Advice Categories
E-commerce
Execution
Online
Security & Payment
Web
Site Development
Web
Site Analysis
Web
Site Marketing
Project
Management
Web
Site Hosting
Advice
to Start-Ups
Content
Management
|
|
|
|
Subj:
Credit Card Fraud Detection
A
couple problems with relying
on AVS as your only fraud-detection
method:
--AVS checks only the first
three digits of the Zip code
provided. It does NOT match
the entire address. This clearly
leaves a good bit of 'wiggle
room' for the smart thief.
--Billing address provided is
matched to billing address on
the card. Many people, myself
included, have items shipped
to their work address, since
no one's home in the daytime
at home (billing) address. Most
e-commerce companies provide
separate bill to/ship to fields
that allow for the input of
different information, since
many people use different addresses
for each. There are no 'red
flags' generated when the shipping
address doesn't match the billing
address, because they're not
necessarily supposed to match.
Most companies, including category
leaders such as Amazon, never
call a customer to confirm an
order when shipping/billing
addresses don't match, or they'd
be losing a lot of time and
money doing so. What's supposed
to match (and what AVS checks)
is the billing address provided
by the customer online with
the billing address on record
in the credit card company's
file. And again, even this match
is just for three numbers, not
the entire address.
Most
viable fraud-reduction techniques
rely on a variety of weapons,
and AVS is but one of them.
Others include flagging orders
made from 'untraceable' e-mail
addresses (such as Hotmail),
flagging orders that have different
names in the ship to and bill
to addresses, and flagging orders
made from high-fraud domains
(especially Russia and other
East European countries). Flagged
orders can then be analyzed
and judged as to whether the
customer should be contacted
to confirm the order or not.
--WebGunForHire,
06/00
TOP^ngspacer
PREVIOUS
|
|
|
Wring
Value from Your Site
|
WebGunForHire
is hosted by LunarPages.
The uptime is excellent, user
interface to account is one of
the best, and the price can't
be beat! LunarPages 'gets' site
hosting.
|
|
|
Questions
& Caveats
|
|
Can't
find an answer to YOUR
question in the Advice Archive?
Send an e-mail to
for a hip-shot answer
from WebGunForHire.
Fine
Print: WebGunForHire reserves the
right to answer or not answer any
given e-mail. WebGunForHire makes
no warranty, either expressed or
implied, and no claim as to the
results of heeding his advice. This
advice is given freely and its actual
value may therefore be directly
proportional to the fee charged
for it. WebGunForHire may offer
legal, business, technical, or personal
recommendations. However WebGunForHire
holds no accreditation nor license
from any recognized authority in
any of these fields, except for
a PMP in Project Management and
lessons learned from a long and
varied life.
|
|
|
|
|
|
|
|
