Credit card fraud is a problem most small business don’t worry about—until it happens to them. If you do business online, by mail, or by some other method that doesn’t use cash transactions, you are at risk of losing money to credit card fraud. To minimize your vulnerability when using credit card services for business, here are a few tips to keep in mind.
Get all relevant information
Ask the caller to read the name, 16-digit account, card verification number, and expiration date exactly as they appear on the card. Also, ask for the cardholder’s complete address and phone number. Do not send goods to buyers who are unable to provide you with complete information.
Beware of different ‘bill to’ and ‘ship to’ addresses
Different ‘bill to’ and ‘ship to’ addresses can be a sign of fraudulent card use. To protect yourself, ask for telephone numbers from both addresses, then confirm the information using a website like AnyWho.com, which allows you to check for bogus billing addresses.
Beware of large next-day delivery orders
Bulk orders that are being rushed to get delivered should raise a red flag, as fraudsters will want to purchase as much and as fast as they can before they are discovered. Also, be cautious about international orders from developing countries. Of course, not all international orders will be fraudulent, but do pay special attention to countries that have a reputation for fraud.
Validate the order before shipping
Steps to validate the buyer and credit card include requesting the customer to fax a copy of both sides of the credit card and/or a copy of a state-issued identification card. If the customer doesn’t have these, you may be better off canceling the order.
Act fast if fraud is discovered to reduce damage
First, alert the authorities about the crime. Next, inform the issuing bank and request them to let the cardholder know that his card has been used fraudulently. If you can obtain the help of the cardholder, you may be able to have the fraudster arrested, maybe even recover the stolen merchandise.
As an online business, it helps to partner with an online payment processing company that has measures in place to protect your business from fraud. Talk to a trusted merchant account provider such as Total Merchant Services of PA to learn other ways to protect yourself.
How Can My Business Prevent Credit Card Fraud?, SmallBusiness.Chron.com