Inexpensive Techniques to Protect Merchants against Credit Card Fraud
Web Commerce Today, Issue 32, March 15, 2000
Until sophisticated fraud detection becomes affordable to small businesses via payment gateways, here are some ways you can protect your site against credit card fraud.
- Use AVS (Address Verification System)
- Prohibit orders from free e-mail addresses
- Capture IP numbers, and say you do so on your order page
- Look for bounced e-mail confirmation messages signaling a false e-mail address
- Telephone the customer to confirm high ticket items
- Refuse to ship to customers in Eastern European countries that have a history of fraudulent transactions
- Be careful of different billing and shipping addresses; confirm by phone if necessary
- Beware of large middle-of-the-night transactions
You can also minimize chargebacks by e-mailing confirmations to remind customers of their online purchases. Be sure to let customers know what company name that will show up on their credit card statement if it's different from your online store name or URL.
One source of information is AntiFraud.com (http://www.antifraud.com). They provide an annual $119 service to help merchants protect themselves against fraud. Services include a list of 3,000+ free domain names, instant e-mail fraud alerts, a mod-10 credit card number verifier, and an IP number capture service.
Implementing these precautions will dramatically cut your losses from online credit card fraud.
