Tips for Protecting Your Business from Credit Card Fraud
by Larry Slusser on March 14th, 2008
There is a lot of information out there about identity theft. This means that there will be people who are using a credit cards that do not belong to them, and you will not get paid for what they just purchased; however, this can have an adverse effect on your business. Below are tips to help protect your business from credit card fraud.
First, it is a good policy to establish that whenever someone uses a credit card to make a purchase, always check a photo id. If the consumer is the person identified on the card, they will not have a problem showing you their identification. In fact, they will probably thank you for double checking.
Next, don’t just casually look at their signature. Check it against their photo id. Additionally, if the card is not signed, the customer must sign it in your presence, while you are holding their photo identification, or you can ask for another form of payment.
If you have online order or telephone order options, always get the name, address and landline telephone number of the cardholder. Then prior to actually shipping out the products, let them know you will call them to confirm delivery. This is highly effective because fraudulent people will not want to give you that information. It is also a good practice to have the Address Verification System on your credit card terminal. This will verify the billing address of the cardholder. Then you can match it up to the address you received. If your terminal does not have this function, call the processor to have this feature added.
It is also a good idea to have the customer sign the invoice as well as the credit card receipt. You can then verify the signatures again. You could also go a step further. After the customer receives the goods or services, have the customer sign an acknowledgement of receipt of the products.
When establishing a return policy, have notices posted in all communication, such as signs, invoices, etc., that you require the credit card used and the receipt to be presented for any exchanges or returns. You can also contact your credit card processor to have it added to your credit card receipt. The credit card processor can also help to implement a password protection on the refund function to avoid any unauthorized debits from your checking account. This also protects you and your employees.
Another way to protect yourself is to process the credit card transactions after you have shipped the products.
When you have to verify a credit card, only contact the voice authorization center phone number that is given to you by your credit card processor. Do not contact the number on the back of the credit card for authorization.
These tips will help to reduce the chances of fraud or losses. When in doubt, call your credit card processor. They are there to help and protect you from fraudulent credit card transactions.