MILWAUKEE -- BBB warns that despite the credit card companies shifting to chip-enabled cards to reduce instances of fraud, scammers still find ways to steal shoppers' information. This presents a big issue for any business that processes the stolen card through its credit card payment system. However, there are a few ways to protect your small business from costly charge-backs.
According to the BBB, one of the best ways to start is to review the agreement you signed with the credit card merchant, and ask for clarification on their policy regarding fraudulent purchases; it's important to know whether or not that is something they cover or if you are wholly responsible. Additionally, determine whether they require a customer to input a PIN or zip code to verify their identity at the point of purchase.
Take the time to review your own internal policies with employees, and establish a set of steps to identify potential fraud. There are several red flags to watch for to help spot a potential scam:
While these are good indicators of a potential scam, it's unlikely that the presence of a single one indicates a stolen card or identity theft. It's best to be vigilant and scrutinize sales that look suspect before shipping any items. If an order raises several red flags, merchants are recommended to do what's necessary to determine that the person purchasing the item is the cardholder or an authorized representative.