As credit cards have become more popular in the past few decades at the same time that the internet and other technologies have become widely used, credit card fraud has become an increasingly common occurrence. Most everyone knows someone whose credit card number has been used fraudulently, but what about the merchants that are victims to these crimes? Unlike the cardholders who are able to contact their banks to remove fraudulent charges, when merchants accept these stolen cards, they are the ones that pay. There are things you can do as a business to help with merchant fraud protection. Listed below are the primary strategies for ecommerce fraud protection.
Retail & Ecommerce Fraud Prevention & Protection
- Do not process suspect transactions.
If you think a transaction might be fraudulent, DO NOT PROCEED WITH THE ORDER until you are comfortable.
- Do not assume because a transaction is approved that it is not fraudulent.
When a card-issuing bank issues an approval code, the only thing they are telling you is that there are funds available on the card and that the account is open.
- Passing the Address Verification System does not mean the transaction is not fraud.
When running a card-not-present transaction, run AVS (address verification system), keeping in mind that AVS does not work outside of the United States and that oftentimes credit card thieves have correct address information.
- Use CVM (3-digit code on back of card) when running card-not-present transactions.
Credit card thieves are less likely to have this data.
- Keep records of previous fraud attempts on your business.
Record email address, IP address, and all other aspects of the fraudulent order. Oftentimes, credit card thieves will go back to the same business. If they are ever successful, having these records will be useful to law enforcement should you choose to report the incident.
Click here to see a list of red flags that may signify fraud.
Payment fraud prevention is not an easy thing, and is only getting harder as thieves get more advanced. As the world continues to becoming increasingly digital, taking steps to prevent online fraud, as well as in person fraud, is becoming increasingly more important. If you follow these steps and react quickly when you suspect fraud, you can help limit the effects of payment fraud on your business.