10 Ways to Protect your Business from Credit Card Fraud

The vice president of national credit card processor National Translink Corporation on credit card fraud.

Article by David Borosak from Issue: 2007 Fall in Section: Features.

Make sure that you’re dealing with a legitimate cardholder. If in doubt, ask for a government-issued photo ID.

Compare the signature on the receipt with the one on the back of the card. If the card isn’t signed, regulations state that the customer must sign the card in your presence or you can ask for another form of payment.

With telephone or mail orders, get the name, address, and landline phone number of the cardholder and tell them that you will contact them before goods/services are delivered. (This is effective because fraudulent users will not want to give out this information.) Also, use a ground carrier that requires a signature for delivery and ship only to the cardholder’s billing address as a crook will not want the goods/services delivered to the same address as the cardholder’s shipping address. If your credit card terminal has the Address Verification System (AVS), verify the billing address and zip code using your terminal as well. If it doesn’t, call your processor to add this feature.

For maximum protection, after the goods and services have been provided, have the customer sign something acknowledging that not only have they received the merchandise but are satisfied with it.

Be clear and consistent concerning store credits, exchanges, returns, and warranty requirements. Have them noted on several different forms or media; posted signs, stamps, or work order language should be in plain view with trailers located on the credit card receipt itself. You can contact your processor to add this to your credit card receipt.

Process your credit card transactions only after the goods or services have been shipped.

Ask your processor to password protect the refund function on your terminal to prevent against unauthorized debits from your checking account. This also protects you against unscrupulous employees.

Always use a manual imprinter to obtain a manual imprint of all credit cards that are keyed in to your terminal.

Always call the voice authorization center phone number provided by your processor rather than the phone number on the back of a card or one provided by a customer when having to call by phone for an authorization. Though these tips are a good way to reduce fraud and losses, always call your processor when in doubt about what you should do when accepting a credit card. They are there to protect you and to make sure that your credit card transactions are secure.