Managing eCommerce fraud operations is no easy task; whether hiring, training, and managing a manual review team, monitoring approval rates, and optimizing internal rules, a fraud manager’s attention is often drawn to many places at once. With so much on their plate at any given time, it’s easy to understand why merchants are drawn to “silver bullet” solutions to manage and prevent chargebacks.

One “solution” to chargebacks often utilized by merchants is fraud prevention blacklists; when hit with a chargeback, all the transaction details are simply added to a blacklist, so that the next time an order is placed from the same IP address or using the same email, the transaction is automatically declined. While they may seem like a great way to streamline internal operations and to prevent future fraud, blacklists are in fact a misguided way to address chargebacks.

In using blacklists, you block not only fraudsters but also many good customers. Moreover, there are pretty basic methods fraudsters can use to “fool” your blacklists. In this post, I will explain why you should stop relying on blacklists for fraud prevention.

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