It is your responsibility as a merchant to verify credit card transactions before sending out merchandise. There are several ways you can limit fraudulent transactions:
- Ensure that the address verification system result produces a match and do not send merchandise to customers whose entered address does not match their billing address.
- Check the cvv/card code to ensure it matches.
- Do not send merchandise to countries where fraud is prevalent such as Nigeria, Malaysia, etc.
- For extra large orders consider additional verification such as the faxing of a drivers license etc.
- Use a fraud screening tool such as Maxmind, available under "General-->Payments-->Fraud Control".
Please note that even if your payment gateway accepts a transaction this is not a guarantee that it is not actually a fraudulent transaction and a chargeback CAN still occur. It is important to protect yourself by doing double checks on both the AVS and card codes.