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When it comes to credit card fraud prevention there are several steps you can take to minimize fraudulent orders if you do business online or over the phone. In the event you spot a suspicious order, it is important to do all you can to validate the order before it is shipped.
As if it couldn’t get any more difficult, studies show that small businesses are increasingly becoming the victims of cybercrime.
Additionally, merchants carry the largest burden of loss when it comes to credit card fraud. If the merchant delivers the product on a fraudulent order, they are out of both the product and the money.
Luckily, as the awareness of cybercrime spreads, the available information on preventative measures also grows. That means there’s no better time to educate yourself on protecting your small business against credit card fraud. Because cybercrime isn’t quite how it's portrayed on TV.
It’s not always going to be a data breach or a physical breach. Sometimes it’s merely a customer paying with a stolen credit card.
Seemingly casual transactions such as this can cost your company profit and inventory. So here’s what to be on the lookout for:
Fortunately, there are steps you can take to minimize fraudulent orders if you do business online or over the phone. There are already measures in place to verify addresses (AVS) and card codes (CVV) for any sales where a card is not physically present. Otherwise, things to look for are:
- Large orders without any customer contact
- Large rush orders, especially for higher-value products. Rush orders that are delivered overnight tells criminals exactly what day the order will arrive, so they can pick it up immediately before you can catch the fraudulent order
- Buyers who want a list of what you sell and promise to place a large order
- Missing information, such as refusing to list a phone number of any kind
- Conflicting billing and shipping addresses
- Orders from foreign countries or orders being shipped to foreign countries but paid on US cards
- Making sure billing addresses match the address on file with the credit card company
In the event you spot a suspicious order, it is important to do all you can to validate the order before it is shipped. Getting complete information (name, address, ZIP, phone number, etc.) from the cardholder is a good place to start.
Another method, while not infallible, is to come up with an excuse to contact the cardholder. If you cannot reach the cardholder, there’s a chance the order is fraudulent. A stolen credit card user is not going to give out their real phone number.
If all of these fail, and you find yourself having delivered on a fraudulent order, contact the police and report the crime.
Then be sure to call the cardholder’s issuing bank so they can place a call to the cardholder.
Additionally, give the bank the shipping information on the order and try to convince the cardholder to report the crime as well. It could be the only way to get back the merchandise.
At the end of the day all business owners and customers want to live in world without fear of crime. However, reality dictates that we prepare ourselves on the off chance something unfavorable happens.
It is essential to protect both your customers and your own business, so take the necessary steps to educate yourself and implement preventative measures before you become another statistic.