Prevent Credit Card Fraud with These Tips

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People love to pay for things with a credit card. In April 2013, it was esitmated that there were at least 278 million Visa cards in the United States alone and about 522 million on the planet. That same year people in the U.S. spent $4.6 trillion with debit and credit cards (total spending was $8.6 trillion). If you want your business to thrive, not taking credit cards is not an option. One problem they create, however is the opportuntity to defraud companies. Credit card fraud costs businesses, credit card companies and other millions of dollars each year. In 2014, this kind of fraud cost the U.S. economy $16.31 billion, this represents a 19% increase from 2013. Some sales are harder to monitor than others, the card not present transaction is one of them. Merchants do have ways to prevent credit card fraud from hurting their bottom line.

  • Train your staff to recognize it. All of your employees should be trained on how to spot and stop credit card fraud. They should be trained when they are first hired and regular trainings to keep their skills sharp should be offered. This is your first defense againt this problem and can be a very cost effective way to protect yourself.
  • Have your staff check the credit card signature. While many businesses set a policy to require staff check the credit card sigmature with the signature of the customer, few do. Make sure your employees are doing this. If the signature looks suspicious, have them check the customer’s ID.
  • Use the card’s security features. Many cards have security features like the person’s photo. Make sure your employees look at the cards for any security features like that. Does the customer look like the person on the card? Make sure they ask for ID for anyone who does not match (it could just be a bad picture).
  • Take advantage of address verification systems. This is especially inportant for payment processing for any card not present transaction but its use is not limited to these situations. This system requires the card holder’s zip code be entered before the transaction can be approved. The system will reject any transaction where the zip code given does not match the billing zip code of the hard holder.
  • Pay attention to your customers. Not only is this a good customer sercvice strategy but it can help prevent theft and fraud. Watch what they are buying and when. If someone you have never seen is buying a lot of expensive items at the end of the day, make sure you take all of the information regarding the sale down. They may just be buying a lot of items legitimately but people who are trying to commit fraud often wait until the end of the day. If the credit card being used is not the shopper’s, it is more likely they are going to want to make their purchases when the staff’s minds are elsewhere.
  • Record all of your credit card transactions.
  • This may be something that your system does automatically, say with the card not present transaction or ecommerce sales but if you have a brick and mortar store, you can still keep records of all credit card sales. Then if there is a question later, you can refer back to your records and possibly fight the fraud charges. The more proof you have that you or your staff were diligent with the sale, the better your chances are later on.

  • Make a note where shoppers keep their credit cards.Most, but not all, shoppers keep their credit cards in their wallet with ther ID. People who are using a stolen card may keep it far away from their ID to avoid having to show it.
  • Call the credit card company.
  • If your staff is really suspicious about a sale, this is impossible with an ecommerce sale where it is a card not present transaction, they can verify it with the credit card issuer. If the sale is legitamite and the salesperson is polite and respectful, the customer will not mind. They may even appreciate the extra diligence.

Credit card fraud is an unfortunate part of modern life but can be prevented with some planning and work.

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Sarah Todd

Sarah Todd

Sarah Todd, an investment banker, is a reporter and researcher for one of London’s leading media outlets. Formerly a trader and market maker at FTSE, she turned to media during the global recession. This website features some of her best and favourite articles, from all parts of the business world. Please let her guide you and your enterprise along the path to prosperity.