The “It Wasn’t Me” chargeback and what it means to eCommerce. If you are selling goods and services online for any length of time, you have probably felt the pain of the “It Wasn’t Me” chargeback. You know the product or service was provided or shipped but then, several weeks later, you receive a chargeback stating that the transaction was fraud. You may have proof of delivery, maybe you even spoke to the end consumer but in the end, there was nothing you could do.

More and more, the “It Wasn’t Me” chargebacks are popping up all over the place as consumers realize the ease of issuing a chargeback with their bank. Don’t have enough money to pay that card? Say, “it wasn’t me.” Didn’t like that service? Just say, “it wasn’t me.” Simply overspent and want to reduce that credit card debt? Again, just say “it wasn’t me.” As more and more banks fight to keep their consumers happy, the process of issuing chargebacks is getting easier and easier. You know all those credit card commercials were the friendly consumer gets a call from their bank and the bank rep says: “Don’t worry about it, we’ll take care of it”? In reality, they are just saying: Don’t worry about it, the merchant will pay the bill.

For those of you not familiar with the process, when a chargeback does occur, regardless of what the merchant did to verify the transaction, the merchant will always be responsible. Some Merchant Service Providers will tell the unfortunate merchant that if you receive an AVS match, you are fine; but in fact, that’s not true. The challenge with “friend fraud” is simply that there is no way to verify the authenticity of the transaction as in fact the transaction itself is legitimate, it’s the consumer who isn’t legit. While “technically” the consumers themselves are committing fraud in this case, law enforcement often views this as a “victimless crime” for no other than the reason than prosecuting these crimes would be too expensive.

There are really good solutions out in the marketplace that are getting much better at keeping records of bad consumers but the reality is that we are a long way off from merchants having the piece of mind that they need here. While many banks promise to have a good track record at preventing these things, the fact is that no solution has made it mainstream that will help prevent such matters.

I say, it’s a hard time to be an ecommerce merchant and my hats off to those who manage to make it through the sludge that is the current face of the payment industry. While the consumers drive the industry, without merchants it just doesn’t exist. So, hopefully next year, as Washington starts it’s only true governing cycle of 18 months of real governance while trying to make symbolic wins for its newly elected officials. maybe they will throw the merchant industry a bone or two.