As a business owner, you’ve worked hard to open your doors. You’ve taken out business loans, developed goods and services that you’re proud of and have done the necessary marketing and advertising to spread the word about your company. In spite of your best efforts, you may find yourself having to deal with deceptive consumers.
Credit card fraud is a devastating reality for many retailers. Some merchants may even have to close their doors because they’ve suffered exorbitant losses from online fraudsters who have purchased quality merchandise and then initiated dishonest chargebacks.
Even though these deceptive practices, known as “friendly fraud,” are on the rise, you don’t have to fall prey to them. Many online retailers have gotten creative about fighting chargeback abuse by turning to social networking. There have been examples of dishonest buyers claiming they never received the merchandise or services they paid for. For example, a consumer used the services of an online travel company, took the trip and then claimed that his credit card was stolen and initiated a chargeback. The resourceful Internet merchant found pictures of the fraudster on Facebook, posing with friends on his dream vacation.
Merchants need to be vigilant about protecting themselves from credit card fraud. The following three tips can prevent thieves from ruining your business.
Verify the buyer’s information.
Always check the credit card name against the customer’s identification. If the names don’t match, you can decline that method of payment and ask for another credit card. You can also check addresses through an address verification system (AVS), which your merchant account services may provide.
Be wary of excessively large orders.
If a first-time customer makes a large purchase or attempts to buy the same item in many different colors or sizes, this is a red flag. These types of orders may be intended by criminals for resale rather than for personal use.
Make sure to state your return policy.
As a small business owner, you need to clearly state your return policy on your website so the consumer is unable to claim he or she was unaware. Spell out the terms of your policy, including any product guarantees, time restrictions on returning merchandise or fees you may charge for restocking items.