With the holidays quickly approaching, we want to provide you with useful information on how to reduce fraudulent charges. This information will help keep your money in your pocket and will reduce the headache of dealing with fraudulent charges down the road.
5 Helpful tips to help stop fraudsters:
- If a transaction seems suspicious or you get that uneasy feeling, don’t be afraid to ask questions. Ask for a photo ID – even if it slows down the checkout line.
- Require each and every customer to sign the merchant receipt copy and keep in a safe place for 18 months.
- Ensure incorrect sales receipts are voided and that transactions are processed only once. At the end of the day, take the time to look at the receipts.
- If you process credit card transactions over the phone, be sure to get as much information from the customer as possible including name, address, and the CVV code listed on the back of the card. Keep the customer information in a safe place for 18 months.
- If you sell merchandise online, make sure your fraud filters are configured to catch any suspicious transactions. If you’re not sure what fraud filters are available, contact your gateway provider and ask!
Once a potentially fraudulent transaction has occurred, it’s typically the cardholder that spots it first. Once they contact their financial institution about this questionable charge, a chargeback is then initiated and the business becomes involved.
Here is what typically happens when a chargeback is initiated by the consumer:
- The business’s credit card processing provider immediately pulls the amount of the transaction in question into a holding account until further investigation. This is done without the business’s knowledge or consent.
- The business receives a letter in the mail explaining the chargeback. Including the amount, partial card data and reason.
- The business must provide necessary documentation to fight the chargeback within a specified amount of time. This is typically a signed sales receipt or signed contract.
- Based on evidence provided, the chargeback/risk specialists determine who is liable for the transaction in question.
- If it is found that the purchase was indeed legitimate, the money is returned back to the business. Keep in mind the customer can dispute the transaction up to 3 times, depending on certain circumstances, so it is important to keep all paperwork and evidence.
- If it is found that the purchase was not legitimate, the money is returned to the customer and the business is responsible. The business can also dispute the chargeback up to 3 times before it is escalated to arbitration to hopefully be settled outside of court.
We hope you have a wonderful and safe start to the holiday season. If you have a concern or question regarding fraudulent charges or chargebacks, please contact us.