Credit Card Fraud Prevention Tips for Small Businesses | Transaction Services

One of the biggest threats to businesses, particularly smaller ones, is credit card fraud. The only way to completely protect your company from this is to refuse credit cards altogether. However, in today’s current economic climate, that simply is not feasible. Accepting credit cards is going to be a necessity for your business, which opens you up to threats. Fortunately, by taking the right steps, you can drastically reduce your chances of experiencing fraud.

Ask for Further Information

An easy thing to do when accepting credit cards physically is to ask for some form of identification. Asking to see a driver’s license can help verify someone’s identity. However, this will not be as simple if your business deals with transactions online or over the phone. You can ask for the customer’s address and phone number to ensure that it matches with the information on the card.

Train Employees to Spot Fraudulent Cards

Your employees may not become experts in detecting fraudulent cards, but with a little training, they should be able to spot the most obvious signs that a card is not legitimate. Tell your workers to always check the magnetic stripe on the back to make sure that it is, in fact, there. The back of cards should come with a signature, so your employees can check the signature on the receipt with the signature on the card. Additionally, they should ensure that the card has not expired. This can make the checkout process a little longer, but for the well-being of your store and your customers, it is a wise move to make.

Be Wary of Suspicious Activity

Certain actions need to be deemed suspicious and should necessitate you to take further steps to make sure the transaction is legitimate. For instance, if someone you have never done businesses with before places a particularly large order online, then you need to make sure that person is for real. Perhaps a stranger is placing a large order online, but it never hurts to be safe rather than sorry. Here are other activities that need to be taken with a grain of salt.

  • Receiving an order from a foreign country.
  • Getting a rush order for high-priced merchandise or merchandise that is requested to come with expedited shipping.
  • Receiving an order where the shipping address is different from the address on the card.
  • Dealing with a customer online or on the phone who refuses to give you a phone number or other information.

Be Careful of Friendly Fraud

Friendly fraud” might sound like an oxymoron, but it refers to the event where a customer places an order, receives the item and then claims it was fraud in order to receive his or her money back. It is a practice where someone uses their credit card for a purchase but claims it was fraud. You can curtail this by receiving delivery confirmation for an item by means of the AVS.

If you were to fall victim to fraud, you could lose a lot of money or merchandise. This is especially harmful for small businesses. Follow these steps to greatly reduce your chances of dealing with fraudulent charges.