Ways to Prevent Card Fraud

in Blog Post, Card Machines, Ecommerce, Merchant Services, New Technology, Seasonal Business, Security, Risk & Fraud, Small Business 8th November 2018

In the latest Card Cutters blog, we discuss how as a small business you can help prevent card fraud against your business and your customers.

How to prevent Card Fraud

Unfortunately, in today’s developing technological society fraud is always present in everyday life for both small businesses and customers alike. Understanding how you can help to prevent fraud for yourself means you are less likely to fall victim to this now everyday occurrence. Being both vigilant and aware at the point of payment radically reduces the chances of any problems being encountered.

Card Payment Transactions

As a small business taking the time to run through the basics can be surprisingly effective. Ensuring a customer enters their PIN number, checking whether signatures match, and checking their name against that specified on the card are obvious steps which in a busy retail environment can sometimes be forgotten. Matching up the last four digits on the card with those on the terminal print out can help detect a counterfeit card. Examining the card for any signs it has been tampered with is important.

Using intuition is also an asset; if the transaction feels awkward or the customer is acting suspiciously, taking the time to double check things is a good idea. Extra caution needs to be used if the transaction is occurring over the telephone, with the customer, not present. Taking a full record of the time and date is vital, in case anything is disputed at a later point. If goods are wished to be collected in person, the customer should attend with the payment card and offer some sort of identification.

Making sure that delivery is only possible to the address that matches that of the cardholder and that signatures are obtained is key. Overseas orders should be treated with caution, and questions considered around why they are ordering items readily available in their own country from abroad, and the risks around delivery.

3D Secure

Used as the payments industry authentication standard for purchases made via the internet, 3D Secure can take different names but acts as a way of protecting customers and merchants alike. When cardholders first use and activate their cards they have to provide details which are later used to verify their identity when making purchases.

Your business can register to be 3D Secure and are then given products such as PCI Compliance that will help meet the necessary requirements for the security level specified for your business type. The benefits of doing so are protections from liability unless you as the merchant are deemed to be receiving unacceptable levels of fraud.

Customer Behaviour

As well as acting on instinct, looking at exactly what the customer is doing can highlight fraud. Buying of items seemingly without much thought, buying many lower priced items with high-value cashback and having multiple cards can all be signs that things are not as they should be.

Considering how customers normally operate can also indicate that fraud may be taking place; if the usual average sales amount in an establishment is far exceeded by one customer, suspicions should be aroused.

Further precautions to take

As with most problems, being aware of things before they happen can go a long way to stopping them happening at all.

  • Looking at previous incidents of fraud, how they occurred and what happened can be a huge advantage, and help focus on where potential risks most lie.
  • Similarly, keeping staff up to date and alert via training and awareness updates can ensure things are kept tight.
  • Making sure they are fully experienced at operating any POS systems and are informed of any changes in technology is essential.
  • Awareness of the latest phishing scams that take place over email or telephone should be constant and ongoing, with natural suspicion for any calls from banks or about payment details.