There’s been a surprising amount of credit card fraud happening lately. As a business, it can be a very costly situation to find yourself in.
One case of fraud can be enough to put a hard stop on growth and can leave you struggling to make ends meet as you make up the loss.
Instead of hoping your business never ends up in this situation, you can take control and protect your business from fraudulent charges and loss of inventory.
You’re going to come across some fraudulent charges in your time as a business owner, but knowing what to look for can minimize the chances of large costly, losses.
Here are some things to keep an eye out for when you’re handling payments over the phone or online.
Always analyze the information
You can only discover a charge might be fraudulent if you check the data closely.
Whenever you accept payments, you should always require certain information from customers making an order:
- Cardholder Name
- Card Number
- Card Expiration Date
- CVV “Card Verification Value” – (the three-digit number located on the back of the card in the signature panel)
- Card billing address along with the ship-to address (when necessary)
Double checking all this information can save you money from fraud loss. You don’t necessarily have to do this for every order, but most certainly for larger purchases, always double check the above. The more information you can confirm, the less risk there is for fraud.
If something isn’t right, be sure to check the following information as well before placing the order:
- Different shipping address and billing address
- Phone Number
- IP Address (geolocated)
If they reside in a country that differs from the shipping address, do not process the order! It may seem like a bother, but this is worth double checking. Try contacting the number who made the order to see what’s up.
Not every international case will be fraud, but it’s a common red flag to watch for; when it comes to fraud, mismatched addresses are a high indicator it’s not a legitimate order.
Follow a strict process for accepting payments
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.
There are some warning signs to proceed with caution when you receive a big order.
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.
It may seem tedious, but calling the card’s issuing bank can verify if the transaction is valid. When you call the card-issuing bank, simply ask them to confirm the cardholder and validate the charge. Being out thousands of dollars is far worse than waiting a few hours to confirm a transaction.
If you accept a stolen card and process the transaction, there will be no way to recover the funds. Always check to make sure and see if the card is declined. If you don’t check for this or are running transactions offline, you’ll fall victim to this type of fraud.
From our experience, it’s always better to not process these types of transactions. You may try and gamble, thinking it’ll be okay. The sad reality is these types of orders with contradicting information will 100% of the time be fraudulent.
Most importantly, trust your instincts. If the caller does not seem utterly confident about the information, he or she is supplying, or you do not feel comfortable sending merchandise, don’t do it. Trust your instincts! If you see red flags, just don’t do it. It is better to lose an order than to risk giving away your merchandise for free.