When you operate an online business that accepts credit cards, there is significant risk built into your business. Many small business owners tend to think that it’s just the big-time businesses that are at risk of being ripped off. Not so. Think about it – doesn’t it make sense that smaller businesses would be easier targets? After all, most small businesses have far less sophisticated systems than larger businesses do.
Protecting yourself against online crimes starts with you being on top of things. Be alert! Be cautious! And be informed! If you are, then the following 6 strategies will all fall into place and will become second nature to you.
1. Validate Credit Cards
By all means, don’t ever skip this most basic of tasks. Don’t process a credit card transaction when a card has been declined, no matter how much the customer pleads with you or how bad you need the sale.
2. Verify suspicious orders
If you are suspicious of an order, pick up the phone or drop the customer an email to confirm their order. Confirm the card number over the phone.
3. Fight charge backs
Sometimes, an actual legitimate card holder can rip you off by filing a charge back. You’ll not only be out the money for the sale, but you’ll also lose the product as well. On top of this, you’ll be hit with a charge back fee by your credit card processor. To avoid legitimate chargeback, be sure to inform your customers of your refund policies and how they can get in touch with you if they have a problem. Deal with the legitimate problems by offering a refund. This will get you the product back in your hands and will save you the charge back fee. Keep records of all correspondence you have with your customers. If you run into a situation where a customer files a charge back that you feel is unwarranted, having a correspondence trail with your customer may very well help you get the charge back reversed.
4. Add fraud protection
VeriSign and other credit card processors offer fraud protection programs for their ecommerce customers. Screening features, along with fraud alerts help minimize the number of bogus orders you’ll receive, which means fewer charge backs. This service is generally available at an extra monthly or per transaction cost, but is well worth it.
5. Card Codes
Be sure to require customers enter in their credit card verification code. This ensures the customer has the card in front of them. Without the code, the order can’t be processed. This is generally an option you can turn off in your order processing software. Don’t do it!
6. Accept online checks
Most credit card processors allow for the acceptance of online checks. Online checks have far fewer fraud risks, so this may be a good way to offset the risk from accepting credit cards. If accepting online checks, be sure to accept credit cards as well as you don’t want to limit payment options as this could result in fewer sales.
Author’s Bio: Bhawna Gusain is a freelance writer with the experience of five years in writing about finance and Merchant Services. She did master’s in Business Management and working at PaySecuri as a writer.
