If you do business on the Web, you should be concerned about credit card fraud. With identity and credit card theft running rampant, you need to assure your customers that you are committed to protecting them from fraudulent transactions.
While it’s not practical to screen every single transaction that goes through your processing system, there are steps you can take to make sure that you are not accepting stolen or fraudulent credit cards on your small business Web site. Here are just a few.
1. Require a credit card verification number on all purchases. Also referred to as a CVV (card verification value) or CVV2, this three-digit number is located on the back of every Visa and MasterCard. Requiring a CVV cuts down on fraud from stolen credit card statements or numbers that are plucked off of the Internet. However, if the thief actually has the credit card, requiring the CVV won’t help.
2. Use an account verification system. Also known as AVS, this system checks on the billing address of the card to make sure that the ZIP code and other information matches. This can greatly decrease credit card fraud as long as the thief does not have access to the card holder’s billing address. How Does an Online Store Handle Credit Card Orders?
3. Be skeptical of “throwaway” e-mail addresses. Cyberthieves often use free webmail addresses from providers like Yahoo! and Hotmail, so view these addresses with suspicion. Of course, the vast majority of people who use these providers are legit, so don’t paint all webmail users with the same brush. But if something does not feel right about a transaction, this can serve as a warning flag.
4. When in doubt, contact the customer. If you suspect something is amiss, contact the customer to confirm the order. If the information is correct, there is no harm done. However, if the phone number does not work, or the person on the other line seems unduly nervous, you can cancel the transaction before any harm is done. Learn How to Choose the Right E-Commerce System.
5. Look at billing and ship-to addresses. Although this is not a foolproof screening method, if the billing and ship-to addresses are radically different, beware. Sometimes addresses are different because buyers would like the item shipped to their office or shipped somewhere else as a gift, if the addresses are in different states, proceed with caution.
6. Hire a fraud-prevention service. If you are concerned about credit card fraud, there are many different companies that can help you ensure that you are not processing any fraudulent transactions.
CyberSource offers a service called Payer Authentication, which takes advantage of the Verified by Visa and MasterCard SecureCode programs. Card issuers are working very hard to ensure that their customers are protected, and you can partner with them by using these programs. If you prefer to have a third party help you with these programs, this is a great way to participate.
ClearCommerce also offers several different types of fraud-detection services. They participate in the Verified by Visa program and offer an advanced AVS system. These solutions are scalable and can be integrated with your current processing methods.