Are you doing all you can to ensure you’re not a victim?
More than 30 million people in the United States had their credit cards compromised in 2014 and that number only increased during 2015. The advent of new technologies that make it easier and more convenient to make purchases, both online and in traditional brick and mortar shops, also makes it easier for thieves to commit fraud. It’s this fact that makes preventing fraud a top priority for many small businesses.
Accepting and processing fraudulent purchases can end up costing you in chargebacks and lost sales. But beyond simply refusing to take credit cards as payment, which could eliminate a large portion of your business (especially if you are making sales online), what can a business owner do to protect themselves? Here is a guide on ways to prevent credit card fraud in your business:
1. ID them
One step to take to protect your company against credit card fraud is to ask customers for identification when they are making purchases. This, of course, only works when you are serving customers in person. If the credit card is stolen, it is likely that the customer will not have ID that matches the name on the card.
2. Verify address, zip code & phone number
If you have an address verification system, use it every time you take a credit card over the phone. Ask the customer for their address, phone number and zip code. The AVS checks the information given against the information on file for the credit card. If they don’t match, you know something may be fishy.
3. Ask for the 3-digit code on the back
This code is called the Card Verification Value, or CVV, and was specifically designed to prevent fraud. If a criminal has stolen someone’s credit card information and does not have the card in their possession, they won’t be able to provide that 3-digit code.
4. Keep an eye out for red-flags
A stolen credit card is only useful to the criminal until the card has been reported stolen. So thieves will often buy as much as they can right away, which means you should be wary of large orders coming through from customers that you’ve never sold to or from customers you know that don’t usually make big purchases. If your company has an online store and you receive orders for your most expensive merchandise, the fastest shipping or large amounts of items, make sure to follow up with the customer to double check.
5. Train your team
Make sure that everyone on your staff knows what to look for, questions to ask and how to verify credit cards. Employees need to be aware of the possibility of fraud and what they should do if they come across something suspect. Include this information in your training of new team members and make sure that even your most experienced staff are on the lookout.
6. Make sure you’re covered
Even if you follow all the steps to prevent credit card fraud, the possibility still exists. As technology gets more and more advanced, businesses and consumers will be up against new ways that the unscrupulous can commit identity theft. To be sure that your business is protected, make sure you have business insurance that will cover you in the event of losses.
Not sure if you’re covered? Find out during a free protection review from Avante Insurance.