So, it is very important to verify the cardholder's identity.

You can use software programs to detect fraudulent orders or you can manually check each transaction for possible fraud.

Here are some steps that you can take as a merchant to reduce credit card fraud:

1) Check the buyers IP Address Location. Does this location match the cardholder's location?
2) Check the buyers e-mail domain. Criminals will use a free e-mail provider.
3) IP Address indicating anonymous or open proxies?
4) Check the bank identification number.
5) Call the credit card holder. You can ask the cardholder to verify the order.
6) Fax authorization with signature. You can ask the cardholder to verify the order by sending a signed fax.
7) Make your anti-fraud policy visible.
8) Utilize anti-fraud services.

Furthermore, you should be alert for transactions with one or more of these characteristics:

1) A first-time customer places the order.
2) Unusual or large orders.
3) Customer is asking for rush delivery.
4) Orders placed using free e-mail services.
5) Transactions made using similar credit card account numbers.

More info about credit card fraud:

www.scambusters.org/
www.merchant911.org/
www.maxmind.com/
www.merchantfraudsquad.com/
www.merchantsense.com/
www.cardcops.com/

Nothing is 100% effective, but the above will at least assist in decreasing the amount of credit card fraud you experience online.