Know your risks
The first step in fraud protection is knowing how it works – and how to see the signs. Fraudulent transactions are often of large value or repeated numbers of small transactions. Sometimes they are easy to spot – a fake address or silly name can often be a warning sign.
Of course, none of these issues alone mean the transaction is definitely fraudulent. But they should be warning enough to investigate more thoroughly before shipping any goods. There are a few checks you should make should your suspicions be aroused. Make them, and you will avoid the many issues that could follow.
Find a suitable provider
Merchant providers are often wary of businesses that attract fraudsters. You will need to set up a high-risk merchant account with an appropriate provider if this applies to you. Failure to do so will leave you open to extortionate fees and plenty of issues when the inevitable fraudulent transactions occur.
It’s also worth pointing out that merchants have high expectations of you. If you haven’t made the appropriate checks for every sale, you could end up liable.
Set up purchase limits
One thing high-risk merchant providers might insist is that you set up purchase limits. To be honest, it’s always a good idea to question the sale of high-ticket items. There are just so many scams and methods of extracting goods from retailers that it’s too easy to get caught out.
However, bear in mind that this won’t protect you from every fraudulent activity. Some criminals might target you for several low ticket items at the same time, or over a period of a week. If you get a large number of orders from the same card, it’s worth investigating – and reporting the incident to your provider.
Keep better records
If the worst does happen, you need to prove you did all you could to prevent the fraud. It’s going to happen, and without perfect records, there could be tough questions for you to answer. Make sure all your customer accounts are in good order. Do all you can to look at suspicious activity.
Ensure your payment systems are watertight. And don’t be afraid to report any strange behavior. Yes, it might be a legitimate customer. But reporting the activity will show them you are careful with their details and financial information.
Fraud is a real danger to many online businesses. However, with strict record keeping and regular checks, there is no reason why you can’t avoid it. Fraudsters are becoming smart at beating the system, but you should have no worries getting money back if you have kept your side of the bargain.