Black Friday is over as well as Small Business Saturday and Cyber Monday. But that doesn’t mean that the shopping season is over! According to the National Retail Federation, 61% of shoppers will buy their last gift in the week leading up to December 25th. With the increased transaction volume and demands for faster shipping, merchants can be subject to more fraudulent transactions.
Businesses need to recognize their opportunity to prevent the loss of money due to fraudulent credit card transactions. By implementing these 5 tips, you can help prevent increased credit card fraud.
1. Require a Security Code on All Credit Card and Debit Card Transactions
This 3- or 4- digit code is a safety feature that helps authenticate the card transaction when the customer is not present, like during an online transaction. The codes vary by card network and have their own name for this security feature:
Visa: CVV2 (Card Verification Value 2)
Mastercard: CVC2 (Card Validation Code 2)
Discover: CMID (Card Member ID)
American Express: CID (Card Identification Number)
Regardless of the card being used, the security code is entered at the time of the transaction and is validated by the issuing bank. As a merchant, you get an added level of protection against potential fraud and losses from scammers by requiring this information.
2. Use the Address Verification Service (AVS)
Another fraud prevention feature is the AVS system that requires the customer to enter their address at the time of the transaction. AVS then verifies that the entered address is the same as the address recorded on the cardholder’s account. This eliminates the potential of a fraudster using just a stolen credit card number.
3. Use a service like reCAPTCHA to deter bots from testing credit cards
This is a free service that protects your website and deters bots from testing credit card numbers. Valid users can easily pass through your site. Users must check the box that they are not a robot or sometimes type in a challenge word.
4. Implement Fraud Prevention Technology
Certain technology can help prevent fraud. Kount is one fraud prevention technology that helps prevent payment fraud, new account fraud, and account takeover protection. By partnering with the world’s largest acquiring banks, payment gateways, e-commerce and technology platforms, and other organizations, merchants can feel more secure knowing they are working to prevent fraud.
5. Be Alert for Unusual Transactions
Fraudsters hope their transactions are processed before the merchant is alert to fraud. As a merchant, you can watch for a few key differences in your normal transactions. Look for unusually large orders, multiple orders shipped to the same location but using different cards, and multiple orders shipped to different locations but using the same IP address. Businesses can mark those transactions as pending and investigate further before allowing the transaction to be completed.
Preventing holiday fraud is part of normal business operations. Using these tips you can help protect your business and stop transactions before the order is approved and the goods are received. Credit card fraud can not be entirely eliminated but rather it needs to be managed. Don’t forget to remind employees to be on the lookout as well, and this will help you defend against credit card fraud now and beyond this holiday season.