Deal With Large Orders Carefully To Avoid Fraud
The world of online transactions can be a fraught with peril for a small business owner, but there are ways you can protect yourself against fraud. Scammers have developed elaborate methods of billing stolen credit card information for big sums of money. A big red flag is when you receive an order for a quantity of merchandise far larger than your typical order size. If this occurs, you need to take extra precautionary steps to ensure the legitimacy of the order.
For instance, if your store typically receives orders for merchandise worth a few hundred dollars, and then you receive notification that a customer has placed an order for several thousand dollars worth of merchandise, you should see this as a sign that there may be a problem. Extra research into the purchase is required, even though the address and credit card have been verified through the electronic payment gateway. Address Verification and Card Value Verification are not enough to determine whether a card has been stolen.
You must properly vet unusually large transactions before any merchandise is shipped. A con artist will obviously not have the goods shipped to the address on the stolen card. Your shopping cart software will often have a built-in feature to detect discrepancies in distance between the credit card address and the IP (Internet Protocol) address of the purchaser. If not, there are sites online that can perform this function of locating IP addresses.
For orders you have reason to suspect, you should also contact the customer directly to determine their legitimacy. If the customer is a fraud, they won’t likely provide a real phone number. Their e-mail address will also typically be from a Hotmail, Yahoo or similar such free service. You should e-mail the customer and request a reply to verify the order, and perhaps even ask that they fax you a signed credit card authorization form.
Once you’ve taken these steps, make sure you tell the customer that you will require their signature upon receipt of the merchandise, or it will be returned. After this, make sure you contact your merchant account provider, and let them know what steps you took to try and verify the suspicious order. Merchant account providers will likely put a hold on funds that are flagged as being unusually large. Speak to a representative to learn if anything else needs to be done, or if they need to take any steps themselves to verify the customer.
So be cautious, take the extra bit of time to go through these simple steps, and protect yourself from online fraud.