Payment fraud is a real issue for small business owners. Did you know that in 2021 the estimated loss in revenue due to fraud was $5.9 billion? Even with new security measures in place, fraud is still a serious issue for businesses that accept credit cards. Why? Because cyber criminals are always adapting. Your best defense? A good offense. Being proactive helps protect your business against criminal activity.
Payment fraud can happen in three ways:
Fraudulent or unauthorized transactions
Lost or stolen merchandise
False requests for a refund, return or bounced checks
Luckily, there are steps you can take to help limit or prevent credit card fraud:
First and foremost, trust your gut. Always. If it doesn’t feel, look, or sound right, it probably isn’t.
Keep detailed records of payments and what services/merchandise was received by the customer to prevent chargebacks. When a customer requests a chargeback, it is the responsibility of the merchant to prove the customer got what they paid for. Card companies typically side with the customer, so to prevent loss, the business must provide receipts, contracts, etc.
Require customers to input the CVC code for all online transactions. Also, make sure to get the full billing address and phone number. Be on the lookout for orders with different billing and shipping addresses, as they are generally more suspicious for fraud. Researching the shipping address and knowing what building/business is there can be valuable in preventing fraud.
DO NOT SHIP any order until you speak to that customer at the phone number you collected. If information is omitted or customer refuses to give you a portion of address or a contact number, refuse the sale. It’s best to lose out on a sale, rather than lose out on lost merchandise.
Be aware of suspicious activity in store and online by keeping track of inventory and being aware of customer activity in your store. If orders and store transactions that far exceed the average transaction amount for your business or if someone places an order for a large number of the same item, it could be fraudulent activity.
ALWAYS ask the customer for ID before completing the transaction. If you do not have a personal relationship with the person standing in front of you and the one listed on the card, check the ID.
NEVER leave customer card data lying around. If for some reason you have to write customer data/information down, keep it under lock and key with very limited employee access. Once the information is used, shred the paper.
Message or call us today to learn more about preventing credit card fraud at your business - 504.229.6394 or info@precisionpaymentsystems.com
