Tips to protect your business from fraudulent activity
If there was ever a time where small businesses couldn’t afford to lose a penny, it’s now. Unfortunately, the pandemic has also exponentially increased those committing credit card fraud, and it’s costing businesses a fortune. In fact, this fraudulence is up a shocking 35% from last year. Consumer identity theft is skyrocketing, and credit card fraud is the number one type. Luckily, most consumers can be protected against this kind of activity, especially if it’s caught early, but businesses aren’t so lucky. So how do you fight back and protect your business from crippling fraudulent activity? Here are a few tips to protect your business from credit card fraud.
Keep your Eyes Online
The pandemic has led to an explosion in online purchasing, a trend many consumers say they’ll continue. On one hand, having an efficient e-commerce site is the only thing that has let many small business survive in the past few months. Unfortunately, it also brings new challenges. Without face-to-face interactions or the ability to verify with an ID, e-commerce businesses are now most at risk of credit card fraud. Card Not Present (CNP) transactions for online orders leave a lot of room for fraud. Often scammers have gotten credit card numbers through phishing or simply trying random numerical sequences.
As a business owner, always set up your system to also ask for the CVV, and even the ZIP Code associated with the card, if online fraud has been extremely problematic for you. The more information you require for purchases, the less likely fraud will be able to occur.
Beware of In-Store Issues Too
Though more and more fraud is being committed online and through mobile devices, plenty of fraud is still happening the “old fashioned way.” Closely monitor your POS systems to ensure that no one has tampered with them or installed a card skimming device. Since POS hardware can all look so different, the average customer rarely notices them. But make sure you and all managers routinely check to ensure it hasn’t been tampered with.
Of course, you will always have to worry about the possibility of employees copying cards. This can be especially easy to pull off in restaurants where employees leave eyesight with customer’s credit cards. However, mobile POS and payment systems are a fantastic way to combat this possibility.
Chargebacks can be the result of legitimate identity theft, but they are often based on customer confusion. Customers tend to directly contact their banks for what they suspect is fraudulent activity instead of the businesses in question. This often occurs when they don’t remember a purchase or don’t recognize a company’s name on a bill. To combat this, make sure that any billing data appearing on a customer’s credit card bill has your accurate business name. For more assurance, it’s also helpful to add a phone number or email address as part of your billing information.
This is one of the causes of so-called “friendly fraud,” though the fees associated with it feel anything but friendly. And, unfortunately, too many chargeback fees can result in the inability to accept credit cards at all—in an increasingly cashless Covid world, that could be the final straw for a struggling business.
Watch out for very high total orders. Fraudsters know that they likely have a limited amount of time with someone’s information, so they tend to spend big—in fact, often three times as high as an average purchase. Consider setting ID checks above a certain purchase price, or again, asking more qualifying questions for online orders. Also, be sure to keep your software up-to-date. Fraudsters may be evolving, but so is the technology used to stop them. Small businesses are the most likely victims of fraud, but they also tend to have the worst internal security and out-of-date technology. If you’re not sure your equipment can handle the newest methods of fraud, be sure to contact your preferred Merchant Services Provider for more information and other tips to protect your business from credit card fraud.
If you’re in need of better fraud-preventing software or mobile POS systems to eliminate card skimming, contact Holman Business Services today.