6 Tips for Protecting Your Company from Credit Card Fraud

6 Tips for Protecting Your Company from Credit Card Fraud

If you accept credit cards from your customers, then you have to worry about credit card fraud. Credit card fraud can cause big problems for your company. It can threaten your bank accounts and your customers’ bank accounts – which would hurt your reputation.

You and your employees have to take steps to protect your company and your customers from fraud.

Use an Address Verification System

An address verification system (AVS) is something that banks and credit card associations use to compare the numerical parts of a customer’s address to the billing information on file.

When you use an AVS to confirm a cardholder’s identity, the system will verify that the street number and ZIP code match. The possible returns are

  • full match,
  • partial match – address,
  • partial match – ZIP code,
  • no match,
  • international, or
  • not available.

The best possible outcome is to get a full match, but there are valid reasons that there isn’t a full match. For example, if your customer recently moved, their address will have changed, but they might not have updated it with their issuing bank yet. So, it’s best to pair an AVS with other security measures.

Keep an Eye Out for Unusual Behavior

There are several tricks that people committing credit card fraud use to try to get away with it. It’s best to keep an eye out for unusual behavior, like:

  • pulling the card from their pocket, instead of a wallet or purse;
  • purchasing a lot of expensive items;
  • purchasing a strange variety of items, like clothes in multiple sizes;
  • telling you to type in their card number, instead of swiping;
  • handing you their phone when they claim they’re talking to the bank;
  • being overly chatty or angry to try to rush the cashier; or
  • waiting until closing time to make a big purchase to rush the cashier.

Of course, these behaviors don’t necessarily mean that the person is committing credit card fraud, but it’s a good idea to be cautious.

Follow Credit Card Best Practices

It’s always a good idea to follow best practices for accepting credit cards to protect yourself from chargebacks and credit card fraud.

Learn more about best practices for accepting credit cards

Stay Compliant with PCI Security Standards

Payment card industry (PCI) security standards help you securely accept, transmit, and store cardholder information to protect your customers’ information from being stolen. These standards include never storing a credit card’s CVV data and never printing the full credit card number or expiration date on a receipt.

The PCI Security Standards Council provides lots of documentation to help you stay compliant.

If Fraud Happens, Report It Immediately

No matter how careful you are, you can’t completely prevent credit card fraud from happening. If you think that an instance of fraud has occurred, act immediately.

If you still have the card, hold onto it and call the card issuer’s authorization center. Tell them you have a “Code 10 authorization request.” The issuer will help you determine whether fraud is happening. Don’t worry about the customer knowing you’re alerting the card issuer to suspicious behavior – the issuer will ask you simple “yes or no” questions so the customer will never know.

If you don’t have the card present, you can call your credit card processor, bank, or even the local authorities to help you determine if fraud occurred.

Train Your Employees

You’re not the only one accepting credit cards at your store, so make sure to train your employees to recognize fraud warning signs, too.