Fraud Protection For Your Ecommerce Site

Whenever you accept credit cards for your ecommerce website, you are putting yourself at jeopardy when it comes to credit card fraud. This is unfortunately a very real concern for small businesses and it is vital to make sure that you are taking all of the necessary precautions to avoid fraud.

There are specific things that you can do to make sure that you are not processing any fraudulent transactions on your site. The majority of them are very easy to implement, and should greatly reduce your risks.

1. Require a verification number. This verification number is found on the back of most credit cards. It is a three-digit number that is unique to the card. If your shopping cart does not include the ability to require this information, you may need to find a new cart. This is a very effective way to cut down on fraud when someone has stolen a number of a credit card and not the actual card.

2. Get AVS with your merchant account. AVS or Address Verification System, is a proven way to prevent fraud. This will take the known zip code of the card holder and compare it to what has been entered on your site. If there is a not a match, the card may not go through. However, this is not a complete solution, especially if the thief has the billing address of the card holder.

3. Contact the customer. If something doesn’t seem right about a transaction, don’t be afraid to contact the customer to confirm the order. Your customer will appreciate it and this is a great time to build a trust relationship. They will know you are looking out for them. However, if you do not reach the actual card holder, you should be able to tell if something is wrong.

4. Compare shipping addresses and email addresses. If you have a strange transaction with a billing and ship-to address that are wildly different, this should raise a red flag. While it may just be a gift order, it is important to double check. If a thief has the billing address of a card holder, they will enter this in to facilitate the transaction, but put in their own address for the ship-to field.

Email addresses from free providers can also raise a red flag when coupled with other suspicious information on an order. This by itself is not an indication of fraud, but should be considered if something else is wrong with the transaction. In addition to free providers, some thieves will enter in completely fake email addresses that do not exist.

5. Get some help. There are many different services that provide fraud protection for small businesses. These services will be fee based, but it is well worth the additional funds to make sure that you are not running bad credit cards.

These services have access to more advanced fraud controls and work directly with card issuing companies to make sure that you and your customers are protected from credit card fraud.

Related Posts:
The Benefits of Using Verisign
VeriSign Announces New Service To Protect Against Online Identity Theft
Can Your Web Hosting Company Steal Your Customer’s Data?
How to Accept E-Checks On Your Ecommerce Site?
Hosting Industry News Briefing for 04/27/2006

Posted on 12/14/05 10:45 PM

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