Better ways for sellers to block the use of stolen cards
Research shows that although credit card fraud is a major problem, it actually affects only a small percentage of online purchases. It is really foolish to apply a one-size-fits-all method that has unintended adverse consequences. Therefore, a balance between caution and practicality must surely be applied.
In another article, I talked about sellers insisting on paying a few cents to the buyer’s bank as a means of preventing the use of stolen credit cards. This can be highly irritating to the buyer because it suggests fraud, but it also delays delivery, either of which potentially prompts the customer to cancel the order and never return. For some sellers, anything other than this automated method may be rejected because “it takes too much time,” they don’t have the staff to do it,” “it’s not the way we do things here,” etc.
What will be proposed in this article requires more effort, attention to detail and possibly a change in mindset. However, the techniques will work to protect against fraud without offending and/or losing a valid customer.
Orders that should cause concern
- Start by checking your own “suspicious order” record. (see below) If buyer details appear in these action details records, you are on your way to eliminating a potential problem and can deal with it appropriately.
- Be careful if the billing and shipping addresses are different. However, there may be perfectly valid reasons, especially if the billing is to a PO Box number but the goods are requested to a physical address. In this writer’s opinion, and despite the banks’ advice, automatically rejecting orders with PO Box addresses is just another way to annoy the customer – unless a very good explanation for this policy is given.
- It should be mandatory for all customer orders to include a contact phone number as well as an email address so that if something looks odd, a phone call to the buyer is easily possible. Failure to connect or connecting with some strange voice message will be an obvious warning sign. Another method is to use “reverse number” software. to see if there is a match. If not, then by all means look for the order. (this solution is available online)
- Buyers using strange-looking email addresses should be considered scammers. Most honest people will have something easily recognizable in their address, meaning a personal name or company name. Of course, the seller can and should immediately send a simple message requesting confirmation that the order was placed by that person. Then watch to see if your message bounces or goes unanswered. If the address refers to a business, it’s easy to search for that business on the web. If it is not detected, there is reason to be suspicious.
How to make the request
Have someone with a pleasant manner call the buyer’s phone. While the contact could be done via email, a personal approach is much more likely to yield positive results and provides a much greater opportunity to assess the situation without offending a legitimate buyer.
- A reasonable reason for the inquiry MUST be provided. Any reasonable person will know if the inquiry is (a) prompt, (b) polite, (c) devoid of any adverse inference and WITHOUT implying that the problem is about that particular customer.
- A little “white lie” seems perfectly appropriate. Instead of saying something that could be interpreted as an accusation, it would be better to say “we’re having a problem with our systems and although it’s not your fault, we can’t process your payment”. “Do you have another card or can you pay by bank transfer?”
- Any hostile response will raise a “red flag” and allow the seller to decline the order for “technical reasons and with regret.”
- Always ask for the name of the customer’s bank. Someone using a stolen card is unlikely to know the answer.
- For high value transactions, ask for ‘verification check’ This is a service operated by VISA and Mastercard where the customer has a password authorized by their bank. This does require the buyer to register for it, but it is unlikely that a legitimate buyer would refuse.
Keep records
Nothing more complex than a simple E XCEL file (or other spreadsheet or database) is needed to maintain a record of suspicious orders. Entering the details will only take a minute or two. The suggested fields are as follows:
The date of the order
Name of the buyer
Buyer’s phone number
Buyer’s email address
Requested delivery address
Ordered item
Credit card number, expiry date and CCV number
Stated reason for query
Result (order processed OR rejected)
Excel allows searching in each of these fields to make it easier to identify each retry
Share your concerns
In obvious cases of potential fraud:
- Report them to your bank. They will have professional staff to investigate further as well as protect you in case of theft of funds from you.
- Report the issue to the card company
- In extreme cases, also report to the police.
Keep reading
This article attempts to offer practical advice in terms of retaining loyal customers. More about investigation and prevention techniques can be found on numerous Internet sites.
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