Anyone with credit card merchant services can feel the sting of a chargeback. These aren’t to be taken lightly, but they can occur from fraudulent transactions. It won’t always hurt you, but losing money is never a great feeling. If you want to stop these kinds of transactions, you need to be more proactive in terms of how you process transactions. This guide will teach you how to examine your merchant account transactions for fraudulent purchases, including guidelines and best practices on what to look for.
Develop a System
You’ll need a system if you hope to be consistent, so bake this into your customer service and sales departments for the best results.
Every big ticket item that gets processed through the system should be reviewed by an account representative, unless the customer has purchased big ticket items in the past. Even then, periodic reviews will help you catch the odd ID thief.
In store, every clerk should be checking for IDs and card signatures. People don’t always sign their credit cards, so provide a pen to customers at the credit card machine so they can do so in your presence and with a photo ID. This helps protect your business, and their account.
If you accept credit cards online, you should require new customers to enter a CVV or CVV2 number. This number helps confirm the customer has the physical card, and is another layer of verification.
Stopping fraud is a full-time job for most banks, so don’t try to reinvent the wheel. Instituting some simple policy changes will go a long way in halting fraudulent transactions and improving your rate of chargebacks and lost revenue.
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