No matter how hard you try to escape it, credit card fraud is a problem you should be ready to face as a business owner. While you may not be able to avoid it completely, there are ways to significantly reduce it. To do so, you’ll first need to be able to identify credit card fraud red flags (as well as have processes in place) to deal with these situations when they arise. 

The industries at a higher risk.

While all industries are vulnerable, some are at a higher risk of becoming a victim to credit card fraud. These include:

  • Jewelry.
  • Computer equipment.
  • Men’s clothing.
  • Stereo equipment.
  • Video equipment.
  • Shoes.
  • Camera equipment.

While online fraud is more common, in-store purchases come with risks as well. 

The red flags of credit card fraud.

There are many signs of credit card fraud you should be aware of, so that you can be on alert for those which are most relevant to your business. Here are the common red flags that could point toward in-store and online fraud:

Large orders.

If you get an unusually large order, make sure that your system has been set up to flag such transactions so you can reach out to the customer directly. 

An order for the same product in too many colors and sizes. 

If you get an order for one product, for example, in ten different colors and sizes, this could be attempted fraud. Especially if you don’t usually sell your products in bulk. 

High-priced items.

If you get an order for more than two items that cost the most among your range of products, it should arouse suspicion. Especially if the purchase was made on an out-of-state card. 

Orders having the same address, but different credit cards.

This is a common fraud technique that occurs when a person uses different credit cards across different orders with the same shipping and billing address. 

Same IP address across several different cards.

A range of orders placed from the same computer, but using different cards, may be suspicious.  

Smaller purchases following a series of declined purchases.

This happens when a fraudulent person tries to order a high-price product but fails because of getting caught by the system, so then they try to order a number of smaller items instead.

Inaccurate expiration dates.

If a customer keeps messing up the expiration date despite having the right security code and number, the attempted order may be suspicious. 

Other red flags include: 

  1. A person who wants to place an order on the phone fails to provide authentic personal information. 
  2. Customers making special requests for international shipping.
  3. Rush shipping requests for large orders. 
  4. If a person repeatedly enquires delivery and shipping delivery dates.
  5. If someone appears uninterested in how much a product costs or how much they want to order.
  6. Disinterest in company policies on returns. 
  7. If the customer continually delays signing a sales draft. 
  8. Fake email addresses.
  9. Fake or suspicious credit card features:
  • Lack of chip and/or mag strip.
  • Varying fonts or character sizes.
  • A strange signature area.                                                                                                                                                     

Avoiding credit card fraud may be a tricky business, but it can be a simpler process if you have the right help. North American Bancard is a multi-faceted payment solutions provider who processes more than $31 billion transactions in 179 different foreign currencies for 100,000s of satisfied merchants. We can help you secure your business’ payment processes to make them safe and efficient through fraud awareness and other best practices.

Contact NAB today and see how easy it is to get the merchant services you deserve.


Share it.

LinkedIn