Credit card fraud is an concern, especially in the world of online business operations. Scammers have developed elaborate methods of billing stolen credit card information for large amounts. As a small business owner, you should see it as a red flag when you get an order for an amount 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 example, if your store typically takes orders for several hundred dollars, and then you receive a purchase request for goods valued at several thousand dollars, this should raise a red flag and be looked into. Extra research into the situation is required, even if your site's electronic payment gateway has verified the credit card and address information. Address Verification and Card Value Verification are not enough to conclusively determine whether a card has been stolen.
It is important to adequately vet unusually large transactions before any goods are shipped. A con artist will obviously not have the goods shipped to the stolen card's address. Your shopping cart software could 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 large orders, it's also wise to contact the customer directly to determine their legitimacy. If the customer is a fraud, they will most likely not 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 provide you with a signed credit card authorization form.
Having vetted the order, make sure you tell the customer that you will require their signature upon delivery 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 typically put a hold on money for an order that veers from the merchant's usual purchase trends. Speak to a representative to find out if anything else needs to be done, or if they need to take any steps themselves to verify the customer.
It might seem like a hassle to take these precautionary steps, but if you do you can rest easier knowing you are safer from online fraud.
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