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Help minimize credit card fraud at your business this season

December 3, 2012

Article courtesy of SBAM Approved Partner Midwest Transaction Group

Traffic is picking up for businesses now that the holiday season is in full swing. In the coming weeks, it is as important as ever to safeguard against fraud. We want to remind you of some steps you and your employees can – and should – take to help keep your transactions safe during this busy time.

When you are accepting payment in person remember: credit cards require some scrutiny. The first and most important thing you should do is compare every credit card customer’s signature with the signature that appears on the back of the card. If it is not signed, ask for a driver’s license to make the comparison. By making sure the two signatures match, the possibility of your store accepting a stolen credit card is drastically reduced.

Equally important is making sure the account numbers embossed on the card are the same as those being read off the magnetic stripe. Your terminal should automatically prompt for you to enter the last four digits of the account number. Once entered, the terminal will indicate whether or not they are a match. If not, the terminal won’t allow you to go forward with the transaction. If this occurs and you receive a “no match” message, do not go forward by manually entering the transaction; it’s risky.

During the holidays, card-not-present transactions are plentiful. Please take note of these tips to avoid fraud with transactions over the phone or on line.

  • Don’t confuse an authorization with guaranteed payment. An authorization only means there is available credit on the card. It will not tell you if a card has been stolen or is being used by an unauthorized party. Some flags that should raise suspicion: particularly large orders, rush orders and those attempting to use foreign credit cards.
  • Take a moment to verify your customer’s address.  This can easily be accomplished by answering your terminal or software prompts at the time of the sale. The response code will indicate whether or not the address given by the cardholder matches the address the bank that issued the card has on file. You can also place limits on deliveries. Anyone requesting you deliver purchases to an address other than the cardholder’s should be treated with great suspect. 
  • Verify the purchaser’s CVV2 code.  The CVV2 code is a three-digit security code that is printed on the back of the card above the authorized signature line. This can be accomplished by answering your terminal or software prompts as well. It will tell you whether the code matches what is on file from the card-issuing bank.

It never hurts to call and confirm a purchase with a customer before you ship it. Fraudulent credit card users often leave bogus telephone numbers or are reluctant to answer the phone. If you can’t get a confirmation, hang on to the order.

If you are selling products on line, secure your shopping cart. Review your incoming payment gateway transactions before settlement and be aware of abnormal sales amounts and volume of same dollar transactions. Ask your third-party shopping cart provider about additional security measures to lock down your shopping cart from fraud and computer program intrusions.

No one wants to lose a sale or spend time fixing a transaction that has been compromised at any time, but this is especially true during the hectic holiday season. Remind staff members of the tools mentioned here and encourage them to slow down in order to make these important checks. Better yet, print a copy of this article and keep it by your credit card terminal as a reference. If you are unsure at any time, call our office: 1.888.599.2209.

Happy Holidays!

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