As a small business owner, you often wear many hats. It’s easy to get caught up in the day-to-day activities involved with running your business, and overlook important tasks.

Having a plan & policy to protect your business from credit card fraud is often neglected. Unfortunately, this can leave your business vulnerable to criminal activity with serious consequences.

Chargebacks from unauthorized transactions can cause serious cash flow issues. It can be difficult to meet financial commitments like inventory purchases and payroll.

It is also a hassle to deal with. Fighting the bank over a chargeback can be very time consuming. How can you protect your business from accepting stolen credit cards or ‘friendly fraud’? Let’s start with the basics and talk about your procedures for accepting credit cards.

Your Location

If you have a physical store or location where cards are present when used, your risk for fraud is lower. Advances in credit card security technology have reduced fraudulent credit card use in-store. EMV chip card technology has proven very effective in stopping in-store counterfeit fraud.

However, you should still have safeguards in place.

Let’s start with the basics – make sure your processing equipment is up to date and EMV compatible. Be sure to complete your PCI compliance requirements including the annual survey and regular network scans if necessary.

Security cameras should be recording all transactions with a clear view of your employees and customers. If a fraudulent card is used, this can be helpful in identifying the individual responsible.

Do Not Accept Damaged Cards

Beware of customers who let you know that their card won’t read. A common scheme is when defaced cards are presented that can’t be read, either by magnetic strip or chip readers. Counterfeit cards are often altered intentionally to bypass security features.

Damaged cards are a red flag. You can ask for another form of payment or decline the transaction rather than manually enter data from a damaged card.

Only accept cards only from the authorized user

The only authorized user of any card is the person whose name is on the front of the card. By accepting payment without checking ID, you may be liable for any chargeback in case of fraud.

Call a Code 10

If you or your employee ever doubts a credit or debit transaction, you can call in a Code 10 to your merchant services provider. Code 10 allows you to request authorization discretely. If your provider sees anything is amiss, they’ll deny the authorization.

This is a discreet way to check the card without having to confront a customer.

Ask for Identification

Some merchants ask for ID on transactions over a certain dollar amount. If you plan on doing this it is a good idea to have a sign posted to inform customers. “Card transactions over $200.00 require identification” or something similar.

Require a Password for Refunds

It sounds crazy but a customer could run a refund on your card machine and use a prepaid debit card to add funds to. Your point of sale devices should require a password or manager approval to issue a refund.

Protecting your business from fraud does not have to be expensive or complicated. A few simple procedures can end up saving you time & money in the future.

If you would like a complimentary security analysis, please contact us and we will schedule a short visit to your store or establishment.