Credit card fraud is a big deal that’s costing small businesses like yours plenty. Reducing credit card fraud should be a priority for business of all shapes and sizes as you prepare for a new year of commerce.
These five tips will go a long way towards accomplishing your goals and reducing the risks your business faces from fraudulent purchases.
1) Swipe More Cards
It’s not that it’s a law of numbers thing. It’s a matter of swiping cards rather than keying them in. Keying them in not only allows for operator errors and outright mistakes, but it also makes it easier for people interested in committing fraud to do so as it is much easier to swipe an account number than it is to mimic the encoding in the swipe feature of individual cards.
2) Enter Customers’ Zip Codes
It’s a simple step that helps to verify that the person is in fact the customer who belongs with the card. This works best when used in conjunction with other efforts to identify cardholders and prevent fraud, but it can be highly effective, in its own right, at identifying suspicious transactions.
3) Use Verification Codes
These are the numbers on the back of credit cards that verify the authenticity of the card. It’s one thing people who swipe credit cards do not have access to as they don’t have the original cards. While it won’t eliminate people using stolen credit cards, it can easily prevent them from using swiped credit card numbers.
Depending on the card company you’re dealing with, these verification codes may be called:
- Credit Card Verification Value (CVV)
- Card Verification Value Code (CVVC)
- Card Verification Code (CVC)
It’s a three or four digit code that can be examined in order to verify that customers have the actual card in hand. It is especially useful when taking orders via phone or Internet.
4) Verify Identification
Another great tactic is to check identification in order to ensure that the person making the purchase is the actual person represented on the credit card or authorized to use the card. It’s a simple step that involves asking for a driver’s license, state, or federal identification (such as a passport).
5) Use a Credit Card Authorization Service
These services take the guesswork out of accepting credit cards for you. If you conduct business online, make sure you work with an authorization service that handles both traditional retail purchases as well as online credit card authorization services in order to get the best possible protection from credit card fraud.
You don’t have to move the heavens and the stars in order to protect your interests as a small business. These steps help you reduce your exposure to credit card fraud effectively and with minimal changes to the way you conduct business. However, no plan is foolproof. That’s why it’s important to have business insurance, including commercial crime insurance and employee dishonesty insurance coverage, for added protection when credit card fraud occurs.