Protecting your business from credit card fraud

Accepting credit cards is becoming increasingly more crucial for any small retailer, but knowing how to protect your business from credit card fraud is just as important.

With financial fraud losses totalling £618 million in 2016, it is crucial for you to know and understand how you can prevent fraudulent charges occurring at your business.

"If it sounds too good to be true it probably is"

In these difficult trading conditions it's easy to see an unexpected high value order as a good thing but this is exactly when you should pause and carry out a few basic checks to protect yourself from possible card fraud.

The most common scenario for card fraud to occur is mail-order i.e. when a customer places the order over the phone. If you accept orders like this you are exposing yourself to the full cost of any fraud and should be extra vigilant.

Ask yourself why a customer has chosen to place the order with your business. Are you the cheapest, have less popular sizes in stock, nearest supplier to the customer or even discussed the bike(s) with the potential customer previously? If the answer to these are NO, why has the customer chosen your business and trying to pay over the phone by card?

It might be a genuine order, but a genuine customer will not mind being asked for further proof of identity. Asking for things like a home telephone number, copy of driving licence or other documents won't necessary guarantee it is genuine but it will deter many fraudsters who will simply attempt to use the card with another business. When entering the card details into your card machine make sure you ask for and enter the postcode numbers and house number when prompted, when the payment is accepted ensure the terminal displays ‘all data matched' not just ‘CSV matched only'; never dispatch goods if a customer can't / won't give you a house number and postcode that matches the registered address for the card. Again a fraudster might well have address information but they will then ask for the delivery address to differ, this is the largest red flag of all and you should never agree to a different delivery address.

A variation of placing an order by phone is to call and represent themselves as working for either VISA / MasterCard or even your card processing provider. Once they have your trust the two most common requests are for the card information for the last transaction, as there was an issue processing it at VISA etc. and they need to ensure you receive the funds. The second one is to explain you have a fault on the machine and need to run a test purchase and refund for which they will give you different card details over the phone. Neither VISA/MasterCard nor your card provider will ever ask for you to carry out an action like this and both will result in you losing money.

Unfortunately these are just the most common areas of card fraud, for additional information and further ways to protect your business see Global Payments common frauds guide and hints and tips to prevent fraud.

Finally remember any member of staff who can take an order needs to be trained on how to spot fraud as well and if in doubt always contact your card provider for further guidance.

The simplest way to protect against distance purchase card fraud is to have a system in place to accept card payments online using software like Global Payments 3D Secure. For any order accepted though 3D secure all the liability is removed from the retailer and placed with the card issuer, giving you 100% peace of mind to dispatch the order.

For more information on our partner Global Payments, click here. You can also request a no obligation callback from the Global Payments team to discuss your card processing requirements.

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