Small Businesses Can Prevent Credit Card Fraud
Small businesses, especially those that conduct business on the Internet should be concerned about credit card fraud. With identity and credit card theft such major concerns for consumers, it is important to assure your customers that you are committed to protecting them and their credit from fraudulent transactions. It may not be practical to screen every transaction that goes through your processing system, but there are some simple steps that you can take as a small business owner to make sure that you are not accepting stolen or fraudulent credit cards.
First of all, you should require a credit card verification number on all purchases, especially those done over the internet. This CVV, CVV2, or card verification value, this three-digit number is located on the back of every Visa and MasterCard. If you require this CVV, it will cut down on the use of card numbers stolen from credit card statements or plucked off of the Internet. Of course, if the thief has the actual credit card, then requiring the CVV won’t work.
Another step you can take is to use an account verification system. Known as AVS, this system checks the billing address of the credit card to make certain that the ZIP code and other information matches what is on file. This can also decrease credit card fraud if the thief does not have access to the card holder’s actual billing address.
Another way to prevent internet credit card fraud is to be skeptical of customers from e-mail addresses that are too easy to get and then drop. Internet thieves may use free email addresses from providers such as Yahoo! and Hotmail. Be cautious when conducting transactions with customers from such addresses. While the majority of people who use these providers for their internet addresses are legitimate, if something does not feel right about a transaction from one of these addresses, this can be considered a warning flag.
If you are ever in doubt, contact the customer. If something seems amiss, you should contact the customer to confirm the order and information. If the information is correct, then no is harm done. However, if the phone number does not work, or the person you reach seems uneasy or nervous, you should cancel the transaction before any real harm is done.
Another tip is to always check billing and ship-to addresses. This is certainly not a foolproof solution, but if the billing and ship-to addresses are drastically different, be cautious. You may want to have customers verify the reason if they have a different ship to address than their billing address. While the buyer may be shipping the purchase somewhere else as a gift, it is not a bad idea to make them give an account of their reason.
If you are concerned about credit card fraud, you can always choose to hire a fraud-prevention service. There are many different companies that can help you to ensure that you are not processing fraudulent credit card transactions. CyberSource and ClearCommerce are two of these fraud-detection services that you may be interested in checking into.
While it takes some time and effort to prevent credit card fraud, there is a benefit to small business owners. Keep in mind that when customers feel that your business is a secure place to shop, they are more likely to return for future purchases.