Most business owners know how important it is to be able to accept credit cards as a form of payment. It is one of the primary ways to increase sales and provide a better customer experience. However, with credit card acceptance comes the potential to be defrauded. Here are four effective ways to prevent credit card fraud and protect your company.
In 2018, a report published by Rippleshot-State-of-Card-Fraud indicated there were 209,000 breached credit card accounts. Additionally, an amazing 46% of Americans report being victims of credit card fraud at least once over the last five years. The fact is, credit card fraud affects consumers and retailers alike, making prevention the single most effective way to protect your company. So, how do you go about setting up preventative measures? You start by establishing a set procedure for your company to follow when dealing with each credit card purchase. For instance, make sure the staff consistently checks the customer’s ID and examines the card to make sure there isn’t blatant tampering. And always confirm the cardholders address by using an Address Verification Service—if the addresses don’t match then the card should be declined. Finally, the staff should be trained to observe the receipt and compare it against the credit card. Place close attention to the cardholder’s last four digits on the account and that the signature on the card matches.
Another way to protect the interests of your business is by making your staff aware of the warning signs of potential fraud. It is critical to watch the customer’s behavior and take note of things that seem out of the ordinary. Here are some red flags to be aware of:
If you suspect that someone is committing fraud, they likely are. So trust your instincts and go with your gut. As a business owner, teaching your staff to identify fraud red flags is a great step towards preventing chargebacks. If you want maximum protection, fraud detection must be integrated into a company-wide comprehensive prevention strategy.
Technology has the ability to prevent and stop fraud, making it essential you keep your business up to date. In 2015, the US began slowly adopting EMV technology—but were late to the game compared to most other countries. EMV stands for Europay, MasterCard and Visa, and is a critical advance towards protecting your company from fraud. EMV chip card technology secures each credit card transaction with card authentication, cardholder verification, and transaction authorization. It will help keep your business safe while protecting your customer’s data. It will also help you avoid liability for losses and potential fines. The downside is that the technology is not cheap and requires an upfront investment. However, it will pay off in dividends of what could otherwise end up large fines after experiencing a data breach or other type of fraudulent activity. The bottom line is that if you have the right payment technology, you can stop fraud as soon as it starts.
Credit card theft is a significant threat to the reputation of your company and your bottom line. So, try to limit the number of company credit cards you issue. The fewer cards you give out, the less chance of fraud you will have. Employee card misuse is common and you will find employees that charge personal expenses to the card and also take cash advances against the card’s limit. This could end up in a large financial loss for you personally as a business owner who is responsible for the debt accrued to the card. A stolen business credit card can be very dangerous for your company and it’s reputation. While personal credit cards are covered under the Fair Credit Billing Act, business cards are not.
Credit card fraud is something that will never be fully eliminated, but it can be limited and managed. Using a combination of methods and techniques will help you develop the best defense against becoming a victim.
Transaction Services is focused on helping you and your customers. Contact us today at www.trxservices.com to learn more.