DON'T LET "PUT IT ON MY CARD" MEAN "PUT IT ON ME"

Tips from Solveras Credit Card Processing on protecting
your business from credit card fraud

The National Federation of Independent Business

There is no substitute for old fashioned common sense and proper skepticism when presented with a credit card sale. If a sales order, transaction or customer seems fishy, trust your instinct and ask yourself, "Does the profit on this sale justify the risk?" If the answer is no, do not process the transaction until the customer has satisfied you as to his or her identity.

Although credit card acceptance is safer than accepting a check, use the same cautionary approach in card acceptance as you would in accepting a check. Compare the name on the credit card to a driver's license or other valid ID. Don't fall for the age old scam where John Doe says his grandfather gave him his credit card for John Doe to buy his own holiday present.

Reasonable steps to verify identity on a telephone or e-mail order

On a telephone or e-mail order from an unknown customer, take reasonable steps to verify the identity of the person placing the order. Consider asking the cardholder to fax a copy of their driver's license and a copy of the credit card itself (for fax security, the cardholder could block out the middle eight digits of the card, as you already have the full number).

The customer is under no legal obligation to comply with this request, nor is the merchant obligated to accept a credit card payment on which there remains a reasonable security or identity concern. When a smart merchant follows reasonable steps like these to protect his or her business, a scammer usually will move on to his or her next intended victim.

Chargebacks

Another potential pitfall to businesses is the dreaded "chargeback," which is the reversal of a sales transaction (previously processed by a merchant) initiated by the cardholder. The amount of the chargeback is deducted from the merchant account and then can be rebutted/disputed by the merchant.

The most compelling merchant defense to a chargeback is a credit card slip signed by the cardholder. Even if the cardholder ordered the product, a merchant may be required to prove the goods or services were properly received by third party confirmation from a common carrier.

It is also recommended that a merchant's policy on returns, refunds or claims arising from installation, quality or other terms of sale be prominently displayed on an authorization form to prove the cardholder knew these terms when the transaction was authorized.

As a cardholder can dispute a transaction for up to six months from the transaction date, it is recommended that merchants keep documentation for a period slightly longer than six months. Best practice is to have a written authorization for each sale.

Available to NFIB members at no cost: The Small Business Guide to Protecting Your Business From Credit Card Fraud

The NFIB Credit Card Processing Program offered through Solveras has numerous best practices you can institute now to help you protect your business from credit card fraud. Download (125 KB, PDF) and print the Small Business Guide to Protecting your Business from Credit Card Fraud from Solveras, available at no cost to NFIB members.

Educate your employees of the warning signs, and post the guide near your cash register and card terminal for easy reference. Get all of the details on the NFIB Credit Card processing Program and Solveras' new remote check deposit system that eliminates trips to the bank and photocopying checks for storage. You may also call Solveras at (800) 619-5301 for more information.

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