In part one of Ripped Off by a Customer, we considered 12 signs of credit card fraud of which retailers should be aware. In this section, we will examine 10 ways in which you can protect your business against dishonest consumers. Above all, retailers must use common sense to guard against being ripped off. Look for the warning signs as discussed in the first part of this article and utilize the following strategies to ferret out potential perpetrators.

  1. This first one is simple but important. Educate yourself and all employees about fraud, including signs that indicate illegal activity. Develop a clear, written policy for how to proceed when fraud is expected. One thing all retailers must be careful about is overreacting to suspicious activity. You do not want to accuse anyone of fraud who is acting honestly. Additionally, you don't want to put a good customer on the spot and embarrass them or make them angry.

  2. On your site warn potential thieves that you screen diligently for credit card fraud and that you take legal action against all cheaters. Include a simple phrase announcing that you are alert to and vigilant against all fraud. This will help keep scam-artists at bay. Also, in order to maintain security, be sure that you put into practice that you've stated.

  3. An Address Verification System (AVS), which matches the postal code and street address submitted by the buyer with that of their credit card, can alert you to mismatches for clients within the UK. If there is a mismatch, often merchants simply void the transaction. However, you could opt to investigate further.
  4. Always send a confirmation e-mail. If it comes back as undeliverable, then you know you've got a problem, and you should not fill the order.

  5. If you are suspicious even after successfully sending a confirmation e-mail, then e-mail the buyer and request the name of the bank that issued the card and the phone number for the card, which is located on the back. You can explain that this is part of your fraud protection service, ensuring that their credit card is being used properly. If someone is trying to rip you off, you'll never hear from them, because they will know that you are onto them. If they are the holder of the card, you'll get the information. Once you get it, follow through on your procedure by checking with your credit card processor, making sure the bank name is correct. Another option is to use the 0800-number to call the issuer of the credit card and inform them of the transaction. You can then request that they call the card holder to confirm the transaction. Most credit card companies will be happy to do this.

  6. Contact the customer to double check the expiration date on the card and the CVC2 code. The expiration date is on the front and the CVC2 code is a three digit code located on the back of the card just after the card number. Explain to the consumer that you are double checking these numbers as a security measure. Scammers tend to use many cards at once and will be confused or may simply panic and never answer your request.

  7. Call the shopper at the phone number provided to confirm the order. The phone number may be fake, which means that the deal is off. If you get the holder of the card, you'll be able to confirm the order or inform them of the illegal activity.

  8. Don't accept international orders of over 250 without following through on all of the investigative strategies discussed. Call and confirm all domestic orders over 250.

  9. E-mail a customer that you suspect and tell them that you have another item that they can use (specifically name the item) priced at 300. Chances are if they are ripping you off they won't worry about spending the money and will take you up on the offer very quickly. Perform further investigation if this occurs.

  10. Put a tracking field into your online order form. This area will record information about the computer used for the transaction, including IP address (Internet Protocol address) and domain name of the server. If you find that the order is fraudulent, you can contact the Internet Service Provider (ISP) and alert them to the problem.

  11. Ask your credit card processor to sign you up to additional verification services offered by credit card providers. These include Verified by VISA and MasterCard Secure Code.

These 10 methods of investigation should serve you well. Don't ship any item until you are sure that you have a valid customer. If for any reason you are uneasy about the purchase hold back sending it. Only complete the order once you are convinced it is genuine. Implementing these steps will aid in the financial health and reputation of your business.