How to Protect Against Credit Card Fraud

How Can I Protect My Business Against Fraudulent Credit Card Use?

That question can be answered in two words: STAY ALERT!

Credit card fraud is theft. When you take a fraudulent credit card payment, you lose merchandise and profit, just the same as you do when someone steals something from your business. You place security cameras around your store to spot shoplifters. Why not be prepared to spot identity theft?

Although you may not be able to completely prevent credit card fraud from damaging your business, you can minimize the problem by putting some simple measures in place.

How To Detect In-Store Credit Card Fraud

If you operate your business at a physical location, train your staff to check to see if the credit card presented for payment is signed, and be sure they ask to see another form of identification. And if the credit card won’t swipe, be sure your employees know how to contact the issuing bank’s authentication line. Do these procedures take extra time when ringing up a sale? Certainly. But they don’t take half as much time as it’s going to take to get through the paperwork involved in dealing with a fraudulent payment.

Unfortunately, credit card fraud isn’t limited to your customers. As much as you might think you can trust them, you should run regular audits on your charge transactions. This can help to identify and/or discourage employee credit card fraud.

How To Detect On-Line Credit Card Fraud

Your chances for credit card fraud increase if you operate a business on-line. But just because you’re not standing face-to-face with your customer doesn’t mean you can’t spot the signs of possible fraud.

Stay alert for large transactions, especially if they are scheduled for next day delivery.

Credit card ID thieves want their merchandise delivered before you have a chance to discover the fraud.

Stay alert for orders that use different “bill to” and “ship to” addresses. Granted, many on-line businesses sell gift items shipped directly to the recipient’s address. But an unusually large order or a bulk order for an item usually sold individually should raise some doubt.

Stay alert for the customer who is not able to answer all your billing questions. Many fraudulent transactions are actually perpetrated using a stolen credit card number. Ask for information that only appears on the card itself. If your buyer can’t supply this information, you can refuse the order.

Stay alert for transactions where payment is made by using multiple credit card numbers. This could be a sign that the identity thief doesn’t want to raise a red flag by having a credit card charge denied because the amount charged exceeds the credit card limit.

In other words, trust your gut feeling. If something doesn’t feel right about a purchase, do everything possible to verify that purchase before your customer leaves the store or you ship any merchandise. Because no matter how or where you operate your business, spending time preventing credit card fraud will save you time and money in the long run.

Credit card fraud is theft. You’ll spend time reporting the incident to the authorities and filling out paperwork for the credit card issuer. You’ll lose the transaction amount and possibly be liable for charge back fees. And in the end the ID thief is long gone… and so is your merchandise!