If you run a retail or ecommerce company, accepting all major Credit cards and electronic checks is a necessary method of customer payment. However, when you choose to accept electronic payments, business owners should also look at the possible cost of fraud. Studies have demonstrated both traditional and online retailers have lost billions in fraudulent transactions. Today, technology offers proven procedures for identifying and preventing fraudulent transactions.
Fraud can come in many forms. Obviously fraud is bad for business. If you process a fraudulent customer order by the time you determine the credit card has been stolen you have already shipped the item. Fraudulent orders usually produce a customer credit card chargeback to prtship carding company. Unfortunately, by that time, you have delivered and lost your merchandise, you have lost the income from the sale and to top it all off; you will be given a chargeback fee from the credit card processor. I am sure we can agree there’s a strong need to identify and stop a fraudulent order before you send your merchandise. Luckily for the retailer, there are several steps and processes which could be implemented to reduce and eliminate credit card fraud.
- Address Verification Service AVS – is an easy and simple to implement process to reduce your likelihood of accepting a stolen credit card. When you process a credit card transaction; be sure that you catch the card holder’s billing address and zip code. Manual non-swipe Internet and MOTO transactions will ask that you catch card holder information. However, card gift swipe trades would not. As soon as you catch the card holder’s billing address and zip code you are ready to process the purchase.
Your point of sale system will confirm AVS with the card issuing bank. You can be given a street address match only, a zip code game only or a game on street address and zip code. If you do not get an AVS match you need to consider decreasing the transaction. Approximately 80 percent of fraudulent transactions in the U.S. are AVS mismatches. Bear in mind, most AVS systems may be configured so make certain to check your AVS settings. Implementing AVS can have a significant effect on reducing credit card fraud.
- Card Verification CVV orCVV2 – is comparable to AVS. CVV is the 3 digit code on the back of credit card 4 digits for American Express. Like AVS, CVV is entered at the point of sale. The card holder’s CVV code is verified by the card issuing bank once the credit card sale has been processed. If you do not get a CVV match you need to consider decreasing the transaction. Online retailers should make CVV a required field.