The percentage of fraud that happens with credit cards is enough to give a small business owner frightful dreams.
Fraud is terrifying for a small merchant compared to corporate giants, since they don’t process millions of dollars of volume, the thought of one massive case of fraud is enough to put them out of commission.
Chances are you’re going to come across some fraudulent charges in your time as a business owner, but knowing what to look for, and how to prevent some of the anxiety, will put your mind at ease. We’re going to show you some steps to protect yourself from fraud.
Orders over the phone and online through an E-Commerce store will always run a higher risk of fraud.
You and your staff are your most effective weapons against fraud. Training your employees in how to properly store sensitive data, and running over processing procedures will be critical in detecting fraud.
Another precautionary step you can take is requiring the “CCV” (credit code verification) for any online or over the phone transactions. The CCV is the three digit code by the signature on the back of every card. Requesting it is a great way to verify if it’s a fraudulent card, since if the fraudster will not likely have the code, but only the 16 digit number.
Look closely at where the order is to be shipped to, especially if it’s a different billing address and shipping address. Cases of fraud will usually result in different names on the billing address verses the shipping address. This is also true if the billing information is from San Diego, but the shipping is for Florida, or overseas.
Be aware of what location you’re shipping the package to, is it a permanent address, a shipping address, a hotel, or a post office box?
Most importantly, trust your instincts. If the caller does not seem completely confident about the information he or she is supplying, or you do not feel comfortable sending merchandise, don't do it. It may be better to lose an order than to risk giving away your merchandise for free.
One of the biggest warning signs for fraud is when you receive a overnight or an expedited shipping request. Fraudsters often demand immediate shipping because they have a limited timeline before the bank catches the fraud and stops the payment. If the merchandise ships before the card is flagged, they’ll win the merchandise, and you’re out the money.
Whenever you are asked to ship an overnight order, take the extra time to review the billing information before shipping the product. Call the cardholder’s bank and ask to confirm it’s a valid transaction.
When you call the card-issuing bank, simply ask them to confirm with the cardholder and validate the charge. It may seem tedious, but being out thousands of dollars is far worse than waiting on hold to confirm the transaction. What’s worse, if it is fraud, you’ll be out the money, and the merchandise.
Fraud is a real concern, but if you take precautionary steps you can protect your business from fraud. See how other businesses succeeded with how they take credit cards.
