By Janet Attard
More people than ever are shopping online, using their credit cards to buy everything from business and consumer products and services.
That’s great news for small and big ecommerce sites alike. More people using their credit cards to buy more gifts, should mean more profits for most online businesses if they aren’t victims of credit card fraud.
Credit card fraud, unfortunately, can quickly turn a prosperous holiday season into a nightmare for a small business. The owner of a small mail order business located in California had to borrow from friends and family to make good on $14,000 worth of fraudulent charges made on stolen cards one year. The following year, the owner implemented procedures to screen out possible fraudulent orders and refused to ship $25,000 in orders that seemed suspicious.
Fortunately, if you sell online or over the telephone there are a number of steps you can take to minimize the occurrence of fraud.
First and foremost, be on the look out for suspicious sales. These include:
By themselves, no one of these things are a sure sign that a credit card is stolen, but when several factors are present (say, your average ticket amount is $75 and you see an rush order for $5,000 being shipped to a different address than the address of the credit card holder) it’s prudent to be suspicious and investigate the sale.
Even if there’s only one factor that doesn’t pass your “sniff” test, it’s useful to err on the cautious side. As an example, not long ago, someone using a credit card with US address purchased a product from us and wanted it shipped to someone by a different name in another country. The particular product was one that wouldn’t be a lot of use to anyone in the country it was being shipped to, so we called the credit card holder to verify the shipping address. The credit card holder hadn’t made the purchase. Neither had anyone else authorized to use the card. The card and the cardholder’s contact information had been stolen.
Under any of the above circumstances you should be particularly cautious and do everything possible to ascertain the person ordering the merchandise is actually the cardholder, or an authorized representative of the cardholder.
These tips, though not infallible, may help you decide if an order is legitimate:
NOTE: Don’t automatically discredit an order that looks suspicious. I once had someone place an order and ask that it be shipped to Mickey Mouse. The address verification feature on Authorize.net didn’t find any problems with the address. My order form includes a place for an e-mail address, and the person had included their e-mail address, so I sent them a note to ask about the order. The individual, who had used his real credit card data and real address for shipping had used the name Mickey Mouse, because he was afraid to use his real name on the Internet.
Janet Attard is the founder and CEO of www.BusinessKnowHow.com , a popular small business Web site that provides ideas and strategies for growing a business and making it profitable. The site attracts 3 million visitors a year, contains thousands of free articles about sales, marketing, internet marketing, business finance, ecommerce and all phases of starting and growing small and home businesses. Janet is a small and home business expert and has authored several books for business owners and startups. Visit Business Know-How and sign up for their free newsletter at www.BusinessKnowHow.com.