Spotting Credit Card Fraud In Your Business

Credit Cards Theft Concept. Hacker with Credit Cards on His Laptop Using Them For Unauthorized Shopping. Unauthorized Payments
Falling prey to a sale made with a stolen credit card is something many businesses, especially small ones, do not consider until they become a victim. It makes you vulnerable to losing money and trust. As a business, you want to minimize the risks and cut losses when it comes to such a fraud.

Even though credit card fraud is a rare occurrence, if your business accepts them, it is something you can’t neglect. It is estimated that such activities cause losses amounting to $16.31 Billion around the world and almost half of these are reported in the United States.

It can happen regardless of whether your business operates online or offline and can also be conducted on a massive scale. A particular group was caught and charged with conducting a credit card fraud that had caused losses of around $13 million over a period of 16 months.

Usually, holiday seasons are profitable times for all kinds of business owners. Sadly, the profits can fade away if any such loss takes place, resulting in additional liabilities for the business or the owner. It is seen that many businesses start placing preventative measures only when they are hit by a credit card fraud. It is suggested that owners take proactive measures to prevent such losses from affecting them in the first place.

Spotting Fraudulent Orders

If your business takes orders online or over the phone, there are a few things you can do to screen suspicious orders. One of the most common methods is to ask for AVS or CVV verification methods. These methods are specifically useful in transactions in which the credit card isn’t physically present.

Other things that you can look for are:

  • Large or expensive orders placed online, especially if they require things like same day shipping or overnight shipping
  • Buyers who claim they will place a large order and ask for a catalog or list of what you sell
  • Customers who are hesitant to provide personal information, such as phone numbers or full name
  • Shipping to foreign countries paid by a US card or orders with different billing and delivery addresses

It’s not feasible to label a transaction as fraud if it fits only one condition. However, the presence of several reasons could be reason enough to be suspicious. It is suggested that you investigate the matter in order to avoid losses.

What should be done to further investigate the order?

If you find several of the above things applicable to the order, you have legit reasons to be suspicious. Now, in order to thoroughly analyze whether it is fraudulent or not, you can do a variety of checks to make sure that the order is being placed by the cardholder or someone authorized by the credit card holder. These are:

  • Request complete information on the cardholder such as name, address, phone number and zip code.
  • Make CVV a compulsory requirement for transactions.
  • Verify the provided information through the bank or whatever other verification system is practiced in your area. If the information doesn’t match up, decline the order.
  • Block transactions through a service that intercepts the order based on the region of origin and other things. These services are available easily for a fee.
  • Attempt to call on the contact information of the cardholder. Decline the order if you can’t reach the cardholder.
  • Look up local orders and match them with phone numbers and addresses in the phone book.
  • Utilize an address verification service to mark suspicious sales and block them, if need be.
  • When you ship the product, it is smart to send a reminder message. Sometimes people forget what they have ordered. Sending a letter to the billing address may also help you verify the order.

If you take up these steps, which are essential for cutting losses, your business will be doing all it can to avoid credit card fraud.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.