Fraud Chargebacks Killing Our Small Business. What Do We Do?
I need urgent help on this. Not entirely sure how to go about this.
Over the last few months, we have been bombarded with fraud chargebacks (over 2.5%) to the point our merchant processor has now put notice we have 90 days to fix this or our account will be closed. We run a marketing service business and "fraud" chargebacks have slowly been increasing to the point now we have been put on notice.
Currently we run our gateway through NMI.
Some commonly asked questions so far have been:
Are you requiring AVS & CVV2 match at the point of sale?
For Card ID Verification - CVV
For US Domestic Transactions, it will reject a transaction if it does not match.
For Non US Transaction, nothing is set.
For Address Verification AVS
For US Domestic Transactions, nothing is set.
For Non US Transaction, nothing is set.
Have you considered using Visa 3D secure?
We use PAAY. However, it only verifies maybe less than 5% of actual transactions. Almost all of the transactions we see inside NMI have no "Verified by 3DS" status. If I used my CHASE card for example, it wouldn't even ask me to do any form of 3D security check.
Do you have fraud sales coming from common IP addresses, emails, billing addresses?
NMI has a Fraud Prevention Option which we have enabled. We have blocked 4,713 email addresses, commonly block specific card ranges (first 6 digits). However with NMI we often get complaints daily of users trying to checkout and unable to proceed and no information on why they're being declined.
Conclusion: Outside of this, we have minimal fraud security setup.
What I have been told to look at so far
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The merchant processor has said that we should consider switching to a more robust solution in cybersource. However reviews on cybersource are mixed.
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Others have said just look at a fraud mitigation service like nofraud, signifyd, fraudlabspro. If you have other names let me know.
I am looking for suggestions what to do here. What manually I can do on my end, what settings I need to change and what other solutions I should look at. The only type of chargebacks we're getting are fraud and if we can combat this, we can get chargebacks below 0.5%.
Posted Jan 25, 2026, 12:20 PM UTC