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How to Avoid Fraudulent Transactions

Any business owner who handles credit card processing has the potential to experience fraudulent transactions. A fraudulent transaction is not only a hassle for the consumer, but it can also wreak havoc on the finances of a business as well. By partnering with a data security company experienced with merchant accounts, a business owner can rest assured knowing that their credit card processing efforts are unlikely to be compromised.

Avoid Cards with Declined Transactions

Business owners incur a fee with each declined credit card transaction. Declined transactions could indicate that the credit card has been stolen or canceled. Asking the customer for identification or another means of payment can help avoid this type of fraud.

Online Fraudulent Transactions

Business owners who sell their goods or services online should take the following measures to avoid fraud:

• Require the credit card security code for every transaction.
• Use tracking numbers and require customer signature for shipping.
• Keep a log of credit card payment attempts for each IP address.
• Keep track of separate bill to and ship to addresses.

Purchase Limits

Consider setting daily purchase limits for each IP address or credit card. This can limit a business owner’s losses in the event of fraud. With automated databases for merchant accounts, up to date purchase totals can be calculated based on parameters such as billing, shipping, or IP address.

Beware of Returns and Refund Requests

One of the newest schemes in fraudulent transactions is to pay for a product or event using a stolen credit card, and then ask for a refund or exchange for another product. In some cases, the individual perpetrating the fraud will ask that the refund be issued to a different credit card that is one that they actually own.

Avoid Distraction

During an in-person transaction, avoid distraction. Some scammers bring along friends to deliberately distract the business owner while they commit a theft, deception, or fraudulent transaction with a stolen or compromised credit card. Avoiding distraction can help in avoiding a large loss of money or goods.


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