NFIB

Online Retailers Concerned Over Foreign Credit Card Fraud
07/15/2002

Many online merchants have been cutting back--or discontinuing altogether--orders to foreign countries because of concerns over fraudulent credit card orders, the New York Times reports.

Some sellers are finding that the money made on foreign purchases does not cover the fees for chargebacks, which are made when credit card holders report fraudulent purchases. While U.S. credit card issuers have more advanced technology to help counter credit card fraud, most foreign countries do not.

Some online retailers are taking extra precautions with foreign orders. For example, Buy.com has stopped shipping to all but 25 foreign countries. CDNow still accepts all international orders, but sends orders from countries with historically high fraud levels to its security department for additional screening.

Others do not feel that taking these extra precautions are worth it. But cutting out foreign markets could have a big impact on sales.

"There are companies that could be eliminating 1 to 2 percent of sales by not operating in some fairly big foreign markets, and that's a lot of money," H. Robert Wientzen, the chief executive of the Direct Marketing Association, told the Times.