3 Ways to Protect Your Credit Card Transactions From the Grinch



It’s that time of year again! Time to gather close to the ones we love, drink hot chocolate, and try to beat everyone else in line for the new Xbox on Black Friday.

While Black Friday and Cyber Monday cause all kinds of excitement on the consumer end, it can be cause for an anxiety attack on the business-owner end. More business is great, but it also means a greater potential for credit card transaction fraud, particularly on Cyber Monday.

So what can you do to ensure your credit card payments are safe during the hustle and bustle of the season?

1 – Filter Your Online Credit Card Transactions

This often requires a fraud protection system, especially if you expect a significant increase in the volume of transactions over the next few weeks. But having a system in place so you can filter your transactions by suspicious activity will give you the chance to stop suspicious orders before they are processed.

Here’s what to look for in order of ‘Very Basic’ to ‘More Advanced’:

  • Address Verification Service (AVS) – All merchants should use AVS for credit cards. This will verify the address given is the same as the credit card billing address.
  • Card Code Verification (CCV) – Same idea as AVS but this is verifying the security code on the credit card. Using CCV, the merchant is able to verify physical possession of the credit card.
  • Shipping vs. Billing Address – If different, you should flag this transaction as one to be reviewed before shipping out any merchandise.
  • IP Velocity Filter – All computers use what is called an IP Number. Set triggers to verify if multiple purchases are coming from the same IP number.
  • Negative Database Verification – All retailers should be using a Negative Database to track credit cards and/or bank accounts that have been used fraudulently against other merchants.
  • Hourly Velocity Filter – Usually scammers try to attack a retail site all at once. With an hourly filter, you can watch for spikes in a potential fraud.

2 – Create ‘Pre-Fraud’ Rules and Reporting Processes

Now that you are looking for the above scenarios, decide on how, when and what you are going to allow, decline or report. For example, if the AVS or CCV process came back with an address and/or card code mismatch, that would be a clear indicator to decline the charge and either cancel or suspend the order until a new form of payment is obtained.

But what do you do for something like Shipping vs. Billing Address? There are legitimate situations where the shipping address is different than the card’s billing address (think to send gifts). In this scenario, you would want to Approve the charge for the order and also report these situations so that a member of your staff can decide whether the order needs further verification or not. Creating what we call a ‘Pre-Fraud’ strategy in advance is key to discovery and prevention of holiday payment fraud.

Another great tactic is to implement a service like PaySecure that adds the entering of a debit PIN number to check-out on an e-commerce site. This adds another level of security and verification to the process.

3 – Brush Up On Your PCI Compliance to Protect Your Customers from Fraud

PCI Compliance is the art (yes, art) of protecting your customer’s credit card information from outside fraudsters who would love to get their hands on it. As a merchant accepting credit cards you are not asked or advised, but required to be PCI Compliant. PCI Compliance is a complicated process and if you have not done so already you will need to partner with your IT team or a PCI Compliant Service Provider (like E-Complish) to get the job done.

Businesses are most vulnerable to fraud through people hacking into the merchant’s credit card transaction processing system and stealing credit card info – we read about these things almost daily. Don’t be the news in your area. Start now, and put the ‘brick wall’ up around your systems. Or, do nothing – as the Grinch hopes – and be held liable for the data breach, become a great new news item for your local press and become exactly the place where customers will not want to shop.

Final Tip – Think like the Grinch

Fraudsters know that your business is booming over the coming months, which means there are more credit cards for them to steal. Just like you are thinking about holiday fraud prevention, they are thinking of how to defraud you during the holidays. It goes without saying that consumers are less likely to return to a business where their credit card information was stolen. Bring yourself up to speed on Fraud Prevention. We don’t want you to become another Whoville citizen asking what happened to Christmas.

From all of us at E-Complish, we wish the very warmest of holiday wishes and a safe and prosperous New Year!