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Actually, you should expect fraud rates to be high, but not because potentially legitimate customers are ripping you off. It's because when a fraudster gets a new shipment of stolen credit cards, he wants to test them out online before, say, walking into Best Buy where he might get busted for using a card reported stolen.

So you're not losing revenue, since these guys weren't going to pay you for your SaaS anyway, and you're not losing capacity since they won't actually use it. So what's the problem? The problem is that chargeback fees (that you pay them for the service of taking the money back) can be $25 or more.

If it becomes a big problem, you'll probably find ways to detect common fraudulent usage patterns. For instance, since your variable cost is zero, you might avoid putting through a charge until they actually use your service.



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