• Address Verification
  1. Business owners should always use the Address Verification Service (AVS), which allows them to verify a cardholder's street address before shipping merchandise. The AVS compares numerical address information with the data stored at the cardholder's bank. The service works only with credit cards issued in the United States.
  2. Merchants who conduct mail order/telephone order or E-commerce sales should ask their customers for the CVV2 (MasterCard) or CW2 (Visa) codes on their credit cards. The three-digit codes are printed on the back of every MasterCard and Visa card, after the 16-digit credit card number.
  3. Store owners should always ask their customers for identification when they offer to pay with credit cards. This simple measure allows merchants to match the names and signatures on the identification cards with the information on the credit cards.

• What is credit card Truncation and How does it affect me, the merchant?

• Trade Show Fraud

  Merchants should use credit card imprinters to protect themselves against fraud if they conduct business in face-to-face environments, such as trade shows, but cannot process swiped transactions. Unscrupulous customers can easily dispute keyed transactions. But merchants can retail proof that their sales are legitimate by imprinting transaction slips with their customers' credit cards. When purchases are disputed through chargebacks, it is merchants, not cardholders, who must prove the validity of sales. Signed transaction slips with imprinted card information are just the type of proof credit card issuers often required.

• Keeping Good Records

  Business owners should always keep track of their documentation. In disputes with customers, documentation may be the only thing that prevents them from having to take losses on transactions. In swiped situations, merchants should keep signed sales receipts; in mail order/telephone order environments, they should maintain complete invoices with cardholder billing information and proof of delivery or shipment, such as tracking numbers. Documentation should also be legible, so it can be read by card-issuing banks during transaction disputes with customers.

• Security for Your Customers
  1. Golden rule: Consumers use their credit cards at businesses they feel will keep their information secure. And confident consumers are loyal consumers. They will return again and again, and they will tell her friends.
  2. Merchants can increase their revenue by offering customers appropriate data security. This includes restricting access to a cardholder information, destroying data that is no longer needed and using the Address Verification Service whenever possible. Merchants should also make their employees aware of the importance of protecting cardholder data, and terminated employees' access to sensitive information should be discontinued immediately.
  3. Internet merchants should consider additional measures to protect their customers. These procedures include installing a network firewall to block hackers, encrypting data that is both stored and sent over the Web, and using and regularly updating anti-virus software.
  4. The bottom line depends on good data security.

• Stop Check Scams
  1. Store owners must establish check acceptance policies suitable for their businesses.
     1. Determine what types of checks they will accept (e.g., personal, business, two-party). Most important, periodically review your merchant policies with your employees and post these policies in full view of their customers. Plan to use check verification and guarantee services, such as those offered by Global Check.
  2. Request identification (ID) for all check payments
     1. Store owners should examine each check writer's ID to make sure that it has not expired and that the name and address on the ID match the information printed on the customer's check.
  3. Merchant's should pay attention to all information written on a check
     1. The numerical and written amounts must be the same. Also, merchants should ensure that the signature written on each check matches the signature on the shopper's ID.
  4. Feel each check's texture, weight and edges
     1. Most commercial checks, except for those issued by the government, have perforated edges. Make sure the type style used on the checks they receives is consistent and aligned.
  5. Encourage your customers to use electronic debit cards if you feel uncomfortable about accepting their check.
     1. This helps store owners reduce the risk of fraud because funds from approved transactions are captured at the point of sale.

Although there is no foolproof way to prevent fraud, merchants can minimize their losses by using common sense and by following these suggestions.

• Merchants Be Wary When..
  1. They receive a credit card that is not signed. Merchants should always ask their customers for identification.
  2. The name on a credit card is different from the name on the identification presented by a shopper. Merchants should ask their customers to explain any discrepancies and request alternative forms of identification.
  3. The signature on the back of a credit card appears different from the signature on the sales slip. The cardholder may just be having a bad handwriting day. But to make certain, Merchants should ask for additional identification.
  4. The card's expiration date has passed. This could be an oversight on the customer's part-or the card could be stolen. In either case, merchants should request another form of payment.

• Secure Socket Layer (SSL), why is that important
  1. Merchants who accept multiple types of non cash payments, including credit and debit cards, must try to make their businesses resistant to fraud. Brick-and-mortar merchants enjoy the ability to process's card-present transactions. They can view a customer's credit card, request photo identification and compare signatures. Online businesses do not have this advantage. Instead, they must rely on security methods that do not depend on physical interaction with customers.
  2. Visa suggests that merchants protect their Web sites in one of two ways:
     1. SSL, an encryption method that protects the credit and debit card information of customers.
     2. SET, Secure Electronic Transaction
  3. A standard that uses digital signatures to help merchants verify that buyers are who they claim to be. SET also sends customer information directly to card issuers for verification and billing.
  4. Both methods ensure safe transmission of online sales transaction information.
  5. For Added protection, merchants should avoid sending sensitive information via e-mail, which is not protected by these security features.

Important Merchant Resources: