Preventing Fraudulent Credit Card Practices

Fraud is a serious problem for companies that accept customer Visa, Master Card, American Express, and other forms of plastic. However, if you are careful about your business practices and train your employees and associates to be the same, you can protect yourself against theft, chargebacks, disputes, and other issues that can cause you to lose money and merchandise and result in high surcharges from your merchant bank.

In Person Protection

Preventing credit card fraud in person tends to be easier than doing it online or over the phone. To start, always verify the customer's signature on the receipt against the one on his or her credit card. If possible, check it against a second form of identification as well -- a driver's license or another credit card, perhaps. If the signatures do not match, absolutely do not accept that as payment.

You should also thoroughly examine the card you've been given. If the signature panel looks discolored, as if someone has tried to remove it or paste something in its place, or cover it with tape, you will want to demand a different form of payment. While of course it is unpleasant to turn someone away from your store, it is better to toss out a thief than to keep one coming back to take advantage of you again and again.

Online Prevention

It is a little more difficult to prevent credit card fraud when you have an online store or other e-commerce operation. That's why most internet businesses are classified as high risk -- because it is easier for unsavory individuals to pass off stolen information that way than in person. However, you can take steps to safeguard your company from this form of theft.

First, make sure that you have all the requested information before processing an order. If the customer has neglected to include something, call for further details or cancel it altogether. Also call to confirm if the customer has listed different billing and shipping addresses. AVS or address verification systems make sure that the billing address given matches the one associated with the card, but a fraud could give the correct billing with his or her own shipping address. Calling can help set things straight.

Fraudulent orders will also sometimes demand overnight or express shipping. Obviously, not every rush order is using a stolen credit card, but if there are any other issues with the order, be suspicious. You can always call to confirm.

Another thing to be wary of is multiple orders using similar credit card numbers, as well as multiple numbers being used to pay for a purchase that is shipping all to the same place. In these cases, it is generally best to just cancel the orders and report the incidences to your merchant service provider. Home

Although it is likely that, if you are in business long enough, you will encounter someone trying to pay you with a stolen Visa or Mastercard, if you and your employees are always on the lookout for suspicious purchases, you can protect your business from serious losses.