Minimize Merchant Credit Card Fraud

Each time a business makes a sale and accepts a credit card virtually, through the mail or over the phone, they take a chance of being the victim of fraud. Merchant credit card fraud is usually not a problem when the actual card is scanned, but with so many people shopping online and through mail order, even if the bank authorizes the sale, if it doesn't work out or is determined to be fraudulent, the merchant is the one who is held responsible, even if this is a criminal case of stolen identity. Rather that is fair or not will not be debated here, but what will be presented to you is some ways that you can minimize merchant credit card fraud.

There are many ways that merchants can protect themselves from credit card fraud. Some of them are quite easy and common. One common and easy thing that can be done by merchants is to always check the credit card name against the customer's ID. This very simple act can stop fraud right in its tracks from the start. If the names don't match, you have every right to not accept the card and ask for another form of payment. You can also check addresses through an AVS, or address verification system which can be bundled into your merchant account services. Another common way that merchant credit card fraud can be prevented is by making a simple call to the issuing bank. Though this may seem like it could be a waste of time, if you suspect anything suspicious with the customer or their information, you may want to take the time to verify everything is in order. Common things you should look for that may be suspicious are misspellings of names, overly large orders or different billing and shipping addresses. Remember, it is better to be safe than sorry. If you let this transaction go through, you as the merchant may be held responsible for it if something fraudulent happens.

Looking for patterns can also help prevent merchant credit card fraud. If you notice that the same address is being used for shipping, but different credit cards are being used to cover the charges, this should be a big red flag. Additionally you should also be noting the time of the transaction. Most fraudulent charges are overwhelmingly made between midnight and 2:00am local time. The combination of that time frame and suspicious patterns should make you stop and investigate.

Final tips for preventing merchant credit card fraud include contacting your customer directly and being cautious of all international orders. Contacting your customers when you see suspicious activity, especially if you know them well, cannot only stop fraud but it is an excellent customer service tool. What better way for you to help your customers than by notifying them that their identity or at least credit may have been stolen.

International orders, especially if you do not get a lot of them, always should be looked at twice. Try all the verification tricks you know before processing them as many foreign credit scams target Americans. You can not only stop merchant credit card fraud, but you may even expose an international crime ring.