If your business operates in the world of online transactions, it's important to ensure you're doing everything you can to protect yourself against online fraud. Scammers have developed elaborate methods of billing stolen credit card information for large amounts. As a small business owner, you should see it as a red flag when you receive an order for a quantity of merchandise far larger than your typical order size. If this happens, you need to take extra precautionary steps to ensure the legitimacy of the order.
For instance, if your company normally receives orders for merchandise worth a few hundred dollars, and then you receive a purchase request for goods valued at several thousand dollars, you should see this as a sign that there may be a problem. Extra research into the purchase is needed, even if your site's electronic payment gateway has verified the credit card and address information. Address Verification and Card Value Verification are not enough to conclusively determine whether a card has been stolen.
You must properly vet atypically large purchases before any product is shipped. A con artist will obviously not have the goods shipped to the address on the stolen card. Your shopping cart software might have a built-in feature to detect discrepancies in distance between the credit card address and the IP (Internet Protocol) address of the purchaser. If not, you can utilize websites that can perform this function of locating IP addresses.
For orders you have reason to suspect, it's also wise to contact the customer directly to verify their identity. If the customer is a fraud, they won’t likely provide a real phone number. Their e-mail address will also typically be from a Hotmail, Yahoo or similar such free service. Don't be afraid to e-mail the customer and request a reply to verify the order, and perhaps even ask that they send you a signed credit card authorization form.
Having vetted the order, you should tell the customer that you will require their signature upon receipt of the merchandise, or it will be returned. After this, make sure you contact your merchant account provider, explaining the steps you took to properly vet this large order. Merchant account providers will possibly place a hold on funds that are flagged as being unusually large. Speak to your provider to find out if anything else needs to be done, or if they need to take any steps themselves to verify the customer.
It might seem like a hassle to take these precautionary steps, but if you do you can rest easier knowing you are safer from online fraud.