5 Ways to Protect Your Business from Credit Card Fraud

A tricky situation often presents itself in the world of eCommerce. When a customer purchases goods online with their credit card, the automated process that processes the order and begins the shipment cycle happens rather quickly. This is for good reason – customers are already waiting the amount of time it takes for the items to ship and arrive at their home, so any unnecessary wait has to be eliminated in order to keep them please with the service.

However, this speedy process leaves a hole in the security system. When credit card orders are processed too quickly, the ability to check the information for fraud is essentially non-existent. The order has been shipped out well before any fraud alerts are seen by the business.

This can cause some serious problems for businesses where this happens frequently. They’re left footing the bill for the fraudulent purchase, and credit card companies can sometimes be elusive. There are a lot of theft and fraud claims processed every day, usually with big businesses and personal cases taking precedence over small eCommerce establishments.

In fact, credit card companies aren’t actually obligated to look into the claim, so the assistance needed to rectify the issue can be essentially invisible.

Credit card fraud is on the rise in the USA. Personal credit card owners receive a lot of help and protection from credit card companies, yet businesses do not – if this is the case, how can business owners protect their assets from being drained away via credit card fraud?

Be diligent about the CC information you receive

This is good advice for businesses that use over-the-phone credit card transactions, but also a good reminder for any business using non-script run credit card input forms on their websites.

Whenever you require a customer to input their credit card information, always make sure that they can provide all information possible. On the phone, make sure they can offer the full name on the front of the card and ask them to spell it to double check they are who they say they are and/or that they have the actual card in front of them. Then require all numerical information – the 16 digit credit card number, expiration date in “mm/yy” format and three to four digit CCV number. This number is very important and should only be known by the card holder.

Also ask for address and telephone number. If you are suspicious of the address being incorrect, also ask them to spell this. The real card holder should know how to spell their street name perfectly. Verify the address before processing the order.

If you are still suspicious, call the card-issuing company or bank and ask if they can contact the customer and inquire about the charge. This can help you get the card holder on your side and expedite the complaint process.

Be wary of next-day deliveries

Not every next-day delivery order will truly be fraudulent, but this is often a tactic credit card scammers use to get the merchandise they want quickly.

A scammer will either figuratively or literally pose as a business looking to get a lot of product quickly – they need a large order and they need it ASAP. This is a realistic scenario in the world of business and organizations where sometimes last minute purchases are necessary in the case of mistakes being made. What appears to be a legitimate purchase, however, turns out to be credit card fraud. Your thief now has all the good with no cash out of pocket and you helped them move the process along.

Double check any large or suspect next-day delivery orders or any other type of order that requests quick shipping. You’ll probably discover a lot of legitimate card holders, but better safe than sorry.

Double-check address differences

Credit card scripts often check the information submitted in “bill to” forms – this ensures the credit card’s address on file matches the billing information provided by the customer. They don’t, however, check the shipping address.

Sometimes customers legitimately want packages shipped to a different location, but other instances of this happening are thieves who want to blow past the address confirmation while still getting the goods sent to their own residence.

Validate, validate, validate

It might be close to impossible when processing orders online, but try to do whatever you can in your power to validate credit card orders before they are shipped. Phone scammers might be scared away if you ask them for additional information found on other forms of ID, such as their driver’s license or faxing a scan of the credit card. If you think it might protect you from future scams, use due diligence and enact these methods.

Act quickly

Don’t let them get away with it. While fighting with the credit card company and getting justice might be an uphill battle, especially for small eCommerce stores, put in the effort to make the situation right. Remember you might also be liable for some fees if the credit card holder disputes charges, so finding the criminal is essential to staying afloat. Report the crime to the authorities and contact the credit card company or the bank that issued the card in order to alert the consumer.

Provide both establishments the shipping address for the goods as their first lead. This information can help put thieves behind bars and get justice for both you and the credit card theft victim.

Want to ensure your business is protected from credit card fraud? Schedule an appointment with your local agent from Valued Merchant Services to learn about all the latest credit card processing security methods, tools, and resources.

By Chris Del Grande

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