If your business sells products and services online, credit card fraud is an unfortunate fact of life that you will likely have to deal with at least once or twice. Scammers are getting craftier all the time, and you have to think fast to stay ahead of them. Fortunately, there are some common-sense steps you can take to combat online credit card fraud. We’ll cover them in a two-part series (this is part one).
1. Make Sure Your Website is Secure
First and foremost, ensure that your technology isn’t opening you up to unnecessary risk. Choose your ecommerce platform carefully. While you may be able to save some money by going with a lesser known system, there’s a reason the big names are the big names. Make sure you fully understand the security features of whatever system you choose as well as who is responsible for maintaining and updating it. If that responsibility falls to you (that is, if security patches aren’t applied automatically), get in the habit of checking regularly for new updates or setting a calendar reminder so you never fall behind.
2. An Email Account is Worth a Thousand Words
We said that scammers are getting craftier, but that doesn’t make them smart. An email address that reads like pure gibberish is a red flag for fraud. If you receive an order from an address that looks like [email protected], take a closer look at that order before fulfilling it. It’s likely you’ll spot other markers of fraud as you dig deeper.
3. Check Out Addresses That Don’t Match
When the billing and shipping addresses don’t match, you may want to take a closer look. Of course, there are plenty of legitimate reasons why shipping and billing addresses would be different, especially around the holidays. But if you’re really serious about protecting your business from online credit card fraud, mismatched addresses deserve a second look. A quick Google Maps search using Street View will often tell you a lot, especially if you sell B2B. If the address comes up as residential and you’re selling to contractors, OK, that’s plausible. If you’re selling to furniture stores, not so much. As with a gibberish email account, it’s not a sure sign all on its own. Just be careful and do your research.
4. Limit Declined Transactions
Some scammers use software that attempts multiple credit card numbers in rapid succession, hoping to find one that will go through. You can combat this type of online credit card fraud by limiting the number of declined transactions a user can attempt in a row before they are locked out for a period of time. Your ecommerce software or credit card processing provider should be able to help you set this up. You should also set your system to alert you when the number of declined transactions has been reached so you can monitor that particular user more carefully in the future.
5. Always Require the Security Code
All credit cards have a three- or four-digit code on them that is not encoded anywhere else in the card data. It’s very difficult for scammers to guess or obtain that code unless they’ve stolen the physical card, so requiring it ensures you’re protected from the random number generating software programs we mentioned earlier. Most customers are accustomed to being asked for this code on most transactions so you shouldn’t run into any issues with customer dissatisfaction due to requiring another field on your checkout form. The only people who will be upset are the would-be scammers!
An Ounce of Prevention….
Online credit card fraud isn’t something most business owners want to spend a whole lot of time on – and we don’t blame you! You have much better things to do than worrying about whether or not the order that was just placed is legitimate. However, taking the time to set up your online store the right way, without cutting corners, will pay dividends down the road when your fraud rate is low and you’re not dealing with constant chargebacks. If you’d like to work with a credit card processor who can help you avoid fraud, reach out to 360 Payments at 1-855-360-0360 or drop us a line on our website. We’d love to help you mitigate online credit card fraud at your business.
PS – Check out our tips for accepting card not present payments here.
PPS – Breeze through the holiday shipping season with these tips.