The best approach is to identify a fraudulent transaction before the order is consummated. Credit card companies provide their own rules and checklists. And there are lots of third party fraud-prevention services — visit our Vendor Directory for suppliers.
Additionally, assist in preventing credit card fraud with these four fundamental safeguards.
Verify Credit Card
First, determine if a stolen card has been used for the transaction.
Check address. Address Verification Service affirms the billing address supplied by the shopper. If the speech from the shopper doesn’t match the card issuer’s records, the transaction terminates.
Check card code. This is also referred to as a CVV or CVV2 code. The shopper must enter the right code before completing the purchase.
Validate password. Some fraud avoidance systems, such as Verified by Visa, require a password before a transaction is approved, to protect shoppers. Shoppers using like service can validate passwords in real time.
Check credit cards on multiple accounts. When the shopper’s credit card is associated with multiple accounts of the merchant, it may be a sign of fraud. Accounts which have existed for some time and use the exact same delivery address are typically not a problem but you need to be careful of newly created accounts using the same card number and every ship to another address.
If the credit card checks out, do these steps.
Review buying behavior. Are the shopper’s merchandise unusual for his history? Did the shopper search for unrelated goods before adding items to the cart? Both may indicate credit card fraud.
Checking contact info. When shoppers upgrade their email address or telephone number before entering the purchase , the probability of fraud increase. Merchants should store a client’s historical profile info — email address, telephone number — to confirm, if necessary.
Assessing the addresses. Be careful if the billing and shipping addresses do not match. Moreover, if the delivery address is fresh, the probability of fraud increases. In those cases, call the shopper to confirm the order before finalizing.
Verifying the IP address. Every computer globally has an IP address. These addresses may change but it usually follows a pattern. Assessing a shopper’s current IP address together with the historic IP one helps flag a transaction as possible fraud.
Check the delivery method. Take note if a shopper asks fast shipping as soon as the cost of transport is high in comparison to the cost of the merchandise in the purchase. Shoppers engaging in fraud will frequently attempt to get products whenever possible, and as they’re using a stolen credit card, they are not concerned about shipping costs.
If the shopper’s credit card number and profile information appear acceptable, check the transaction itself.
- Is the purchase value greater than normal?
- Does the purchase have large ticket items?
- Does the arrangement have a lot of units of the exact same item?
- Is this arrangement placed more often than normal?
- Are there any other orders with different shipping addresses?
Be wary of customers who follow an apparent normal order using a change request, like the following.
- Adding more goods.
- Adding big-ticket products.
- Shifting shipping addresses.
- Shifting the payment method, like replacing credit card numbers or having a credit card when no card has been used on the original purchase.
If one of these requests occur, repeat the above checks. Merchants with in-store pick-up may ask the client to make the payment at the shop with a physical card reader. When this shifts the liability from the merchant, legitimate clients could be set off by the inconvenience.