How to prevent in-store debit & credit card fraud
Here are six ways to prevent in-store debit & credit card fraud that will help protect your business.
1. Be transparent with your return policies
Fraudsters tend to exploit the returns process the most as they are the most important part of customer service. Businesses should be transparent with their policies in order to protect all parties.
Minimizing the risk of return fraud starts with awareness and should be trained to spot it should it happen.
Often criminals use a discarded or stolen valid receipt as a shopping list to find items in a retail store and return them for a refund. Alternatively, they make a purchase, leave the shop with the item and then return to the store immediately with the receipt and pick up another item off the shelf, which is exactly the same and ask for a refund claiming that they’ve had a change of heart.
2. Look out for physically damaged cards
Fake cards are often altered intentionally as the criminal wants the cashier to bypass their anti-fraud features. Ideally, you should ask for another form of payment or decline the transaction. Do not manually enter data from a damaged card.
3. Call your payment processor if a transaction appears fraudulent
Payment processors always monitor your transactions for fraudulent activity, in order to look out for suspicious payments.
If you feel a transaction isn’t ‘right’ for your business you should give your processor a call immediately, especially if you are taking large sums of money.
4. Don’t be made to do something if you don’t think it’s right
Your staff should feel confident to always make sure the correct procedure is followed when authorizing purchases using credit or debit cards. If you are made to do something that isn’t right, then that’s a warning sign!
5. Only accept payment from the person whose name appears on the card.
If you accept payment without validating ID, you may be liable for any chargeback, in case of fraud.
Merchant chargebacks is a term used to describe when a customer’s card issuer disputes a transaction on their behalf. Once this has happened the issuer will reverse the payment, refunding the total amount to the customer’s account.
Being aware of this and taking time to check will save you a lot of time and money.
6. Call a ‘Code 10’
If you have doubts about a transaction, you can call in a ‘code 10’ to your payment provider. This allows you to request authorization discreetly. If your provider sees something suspicious, they will then deny the authorization. You can call code 10 if you think a card has a missing or altered security feature or fail to have essential elements like the card number.
Additionally it’s also worth considering the following:
Only accept EMV chip and pin card payments with your card machines
Only accept authorised cards which are AVS verified, a standard which is supported by all of the major cards including Visa, Mastercard and American Express.
Become PCI DSS compliant and make sure both you and your employees are trained on how important it is to protect your customer’s data
Only use card machines with end-to-end encryption or point-to-point encryption. (This is part of your PCI compliance)