Between November 27 and December 15, 2013, roughly 60 million Target shoppers had their credit and debit card data stolen. Almost immediately the stolen data showed up on the black market where it was sold in batches. The astute thieves timed their operation for the busiest shopping time of the year. Many banks hesitated to cancel cards in fear of customer blowback created by the inconvenience. The Target scam caught people who not only used their credit cards and debit cards in stores, but also online shoppers. It is likely that old and unsecure software permitted the abduction of the personal financial information from Target.
eCommerce fulfillment companies face challenges similar to Target when it comes to fraudulent transactions. .Many internet frauds are simple variations of standard consumer fraud and simple mail or telephone order fraud Online cons seem to favor internet auctions where it is a buyer beware situation. The anonymity of the internet adds is an extra bonus to the fraudster and an extra challenge to eCommerce fulfillment companies.
Credit card chargebacks are very expensive in eCommerce fulfillment. Merchants are disadvantaged because the credit card issuing bank has a financially vested interest in the satisfaction of the card holder. There are three different types of chargebacks. Two can be easily deferred. The first is the friendly fraud. Usually this occurs when a credit card charge is not recognized. Often a family member has made the charge without the card holder’s knowledge. The second type of chargeback that affects eCommerce fulfillment is of the buyer’s remorse type. Included in this group are customers who habitually reverse transactions.
Retaliatory chargebacks occur when a customer is dissatisfied with a purchase and lets the issuing bank do the dirty work of contesting the charge. It is up to the retailer to determine how much time they are interested in fighting the card issuing bank. However retailers who fail to vigorously fight retaliatory chargebacks end up on shared internet lists and become a frequent target of opportunistic fraudsters.
JD Sherry’s Getting the Target Off Your Back goes into more detail about the scam.
FW Warehousing is headquartered in St. Louis, Missouri with Midwest warehouse distribution centers in Kansas City, Indianapolis and St. Louis totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, FW later broadened its services to include contract warehousing, dry storage, hazardous material and chemical storage, temperature-controlled storage, product distribution and B2B and B2C fulfillment.
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