Tweak Your Biz » Management » 5 Tips To Prevent Credit Card Fraud For Your Ecommerce Store

5 Tips To Prevent Credit Card Fraud For Your Ecommerce Store



Selling products online is a fantastic strategy for small businesses, but there is risk when you accept credit cards. With credit card fraud running rampant, thanks to technology moving at light speed and hackers finding new algorithms to get credit card numbers, your business is at risk.

5 Tips To Prevent Credit Card Fraud For Your Ecommerce Store

Fortunately, there are measures you can take to reduce your exposure to credit card fraud.

#1. Require Layers of Authentication

It’s standard these days to require several pieces of information during an online transaction, including:

  • Name
  • Address
  • Phone number
  • Card number
  • Expiration date on card

Go one step further and require shoppers to input the CVV2 or CVC code from the backs of their credit cards. Hackers can’t get this information without physically having the card, so it can greatly reduce the number of false transactions you process.

#2. When in Doubt, Call

If there’s something fishy about a transaction (like someone ordering 500 fish tanks from your site), call the number you have for the customer. If that doesn’t work, email them before you process the transaction. Essentially, you want confidence from the person whose name is on the card that they indeed did make an unusual purchase.

#3. Use an Authentification Program

Credit card companies use authentification programs to ensure the identity of a card user online. By participating in these programs, you remove some of the onus of loss that occurs during online fraud, as the credit card company takes it on.

Keep in mind, this does add a step to the purchase process, which may be a turnoff for some of your legitimate customers, but it may be worth it to protect your assets. These programs will charge you a fee to process each transaction.

#4. Make Sure Bill to and Ship to Addresses Match

Here’s a red flag: the name and/or address listed under the billing information is different from that in the shipping details. While there are legitimate reasons for this (perhaps your customer is shipping a gift), it’s a wise idea to follow up with your customer to verify the transaction.

#5. Become PCI Compliant

The Payment Card Industry Security Standards Council is an organization designed to protect merchants from fraud. It has compliance regulations that, if you meet, will provide an additional layer of protection. One requirement is that you secure cardholder data in order to be compliant. Find out other requirements here.

Credit card fraud can cost you valuable time and money, and even jeopardize your business. It’s a real threat, and one you should be proactive on to mitigate your risk.

Images: “Woman shopping using tablet pc and credit card .indoor.close-upShutterstock.com

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The Author:

Jaimie Yun has more than 15 years experience across financial sectors of public accounting, corporate finance and more. She is on the advisory board of PayDemand.com, a credit card processing marketplace that allows businesses to compare multiple credit card processing rates and get the best offer while remaining anonymous to processors. Connect with Jaimie on Google+ and follow PayDemand on Twitter. https://paydemand.com

Add Your Comment

  • http://www.tweakyourbiz.com/ Sian Phillips

    Thanks for another interesting post Jaimie. It’s a shame that there is the possibility of credit card fraud but it’s obviously prevalent so good to know how to guard against it. I look forward to your next post

  • http://www.callboxinc.com/ Lorie Lewis

    These tips you have imparted are indeed very useful not only for businesses but for individuals as well. Customers now prefer security first, and if your Ecommerce website is lacking security measures, then you may say good-bye to your business revenue. You can ensure your customers by protecting the ecommerce website with robust security. It is essential to protect your ecommerce website not just for potential revenue but for the sake of your customers.