Accepting credit cards can prevent bounced check payments and increase cash flow in your business. But, according to research, about 41% of identity theft cases lead to credit card fraud. If you accept payment from a stolen credit card, you may be prone to expensive lawsuits, fines, and penalties.
The card owner may also reverse the amount charged after a sale, which will result in losses. Apart from that, if an unauthorized person uses your company’s credit card, they will increase expenses and damage your business reputation.
It’s essential to learn how to recognize cases of identity theft to prevent fraud and associated costs.
Read on for detailed tips on avoiding credit card fraud in your smart business.
How to Prevent Credit Card Fraud
Fraudulent transactions are prevalent since impostors only need a few details about a cardholder to impersonate them. Here are some measures you can use to identify and prevent credit card fraud in your company.
1. Be Observant When Accepting Orders
E-commerce businesses are among the most common victims of credit card fraud. So, in case you run a smart company, you must stay vigilant when taking online orders. For instance, before accepting payment from a client, pay attention to the credit card information.
This measure will allow you to confirm if the shipping location and phone number provided belong to the cardholder. If you observe that the details do not match, flag the order and notify the credit card company.
2. Secure Your Business Credit Cards
Failure to protect your company’s credit cards can lead to fraudulent activities. To prevent this, limit access to financial information and only issue the cards to the staff you trust. You should also learn more about virtual models, which are safer than physical ones, to decide if they are suitable for your business.
Another way to secure credit cards is by using unique and complex security measures. Avoid predictable passwords such as the company’s name and founding year. You should also check credit card statements for unusual charges and limit the financial information you share with others.
3. Look Out for Warning Signs
Business ownership can be challenging since you may need to handle multiple tasks at once. Unfortunately, when preoccupied, you may skip crucial steps when confirming a purchase. For instance, you may forget to verify the credit card info and expose yourself to fraud.
To prevent these instances, you must stay vigilant to detect various signs of identity theft. Such may include when a buyer makes several expensive purchases at once or gives an address different from the one on the card.
Once you recognize such signs, avoid confronting the customer about their true identity. Instead, use an address verification service (AVS) or the card ID for confirmation before closing the sale.
Protect Your Business From Fraud
Credit card fraud has many adverse effects on a business’s finances and reputation. However, with the provided tips, you can identify suspicious activities and develop ways to deal with them.
Other than that, you can secure your finances and allow your smart business to grow. If you found this post informative, browse this website for more ideas on improving business operations.