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Fraud Tips for Merchants

MerchantPlus is uniquely aware of the challenges regarding fraud faced by small and medium sized Internet businesses. As a merchant, you are responsible for the transactions you process, the orders you ship or fulfill and the customers you acquire. However, telling the good ones from the bad ones is harder than it used to be! To help you succeed in your business, we've created our popular Merchant Forums, where merchants can exchange experiences, ideas and tools in this ever-changing marketplace. As our contribution, we've created a list of the "Top 7" tips, tools and techniques to combat fraud online:

  1. Use AVS - AVS stands for Address Verification Service. It was implemented by the major card companies in the 1990s as a way to authenticate card not present transactions. Although not perfect, AVS is a good tool. Generally, you should verify transactions for AVS and then make sure to ship to the billing address on the card holder's statement! Remember, it does no good to ship to a different address after validating the billing address.
  2. Use Free Tools - There are countless free tools to help you when processing orders. Some of the best are available for free at Melissa Data (http://melissadata.com/Lookups/index.htm). These tools will help you verify if an address exists and also check if the phone number on the order is in the same region.
  3. Use GeoIP - Make sure to collect the submitting IP of the user with each order. You can then use tools that lookup the last known location of that IP to find out approximately where the user is. We recommend http://melissadata.com/Lookups/iplocation.asp and http://www.maxmind.com/.
  4. Call Your Customer - If an order looks strange, call your customer! Generally, customers enjoy the fact that a merchant contacts them and is looking out for security.
  5. Don't Ship to Drop Boxes - A common scheme these days is to use drop boxes (think Mail Boxes Etc) to receive shipments from merchants and then forward them to another address, often outside of the country.
  6. Call The Card Issuing Bank - One of the best tools you can use is to call the card issuing bank and verify the card you are attempting to charge is not stolen. If you do receive a fraudulent order, you can also report it to the card issuing bank so they may notify their customer and cancel the card. To find the card issuing bank, call the proper Visa or Mastercard number below and choose the option to get the card issuing bank of the card number. Then, call the card issuing bank and explain that you are a merchant who was given this card number and suspect fraud:
    1. Visa USA Merchant Assistance Center - 800-847-2750
    2. MasterCard USA Merchant Assistance Center - 800-307-7309
  7. Be PCI Secure - Signup for a PCI scanning solution. Protect your website from hackers and avoid costly penalties and downtime. MerchantPlus offers an entire year free with our partner McAfee. Find out more by clicking here.

For Additional Resources - Please visit the Visa Card Not Present (CNP) Card Acceptance information page here.