How to Avoid Fraudulent Credit Card Use at Your Boutique Clothing Business

Posted February 19, 2014 – 10:42 am in: Wholesale Closeout News

Credit Card Fraud is at an All Time High – Use the Tips on this Page to Help Prevent Fraudulent Charges at your Store

credit-card-swipeIt’s an unfortunate fact that credit card fraud happens, not only for the victims, but for shop owners who it happens to. Credit card fraud can cost you a lot of money and time that can better be spent furthering your business than trying to make sense of the wreck someone with less than desirable morals left behind.

For instance, a stolen credit card used to make purchases at your business can result in you losing the items you sell as well as the money, since you would need to refund the money to the proper holder of the card. However, there are ways to prevent credit card fraud. Being aware of suspicious activity at the time of purchase can be a big help.

In this article at Madison Avenue Closeouts, we want to share tips to help avoid credit card fraud at your local business. As always, we’d love it if you join the discussion at the end of the page and provide any additional ways you prevent fraud at your business.

Record ALL Information from your Credit Card Customers

If you are making a sale online or over the phone, make sure you take down all of the relevant information: the name on the card, the card number, it’s expiration date and security code. Also ensure that you take the address down, and if anyone seems hesitant to give a full name or proper address, inform them that you are unable to serve them unless they do so. No one has any reason to deny this information unless they are taking part in a fraudulent transaction.

Be Extra Vigilant with Different Billing and Shipping Addresses

Sometimes customers will have different billing and shipping addresses; this can be completely normal, particularly if they own their own business and have the bill sent to their home address. However, it is a red flag you should be aware of. If a customer has different addresses listed, inquire about the reason behind it and make a note somewhere in your ledger so that you have evidence in the event that fraud occurs.

Check with your card processor or bank, some require that the items purchased MUST be shipped to the same billing address. In some cases, they will decline a payment for different addresses.

Watch for Large Purchases from Unknown Customers

Many times, someone with a stolen credit card will try to get as much use out of it in the time they have as possible. Even if you sell items in bulk, keep an eye out for abnormally large orders; this can be a sign that someone is attempting to commit credit card fraud. We have a wide range of bulk clothing lots at Madison Avenue Closeouts, and often have to verify cards for security.

Establish a policy of several days for verification before shipping out orders over a certain number of items. This protects both you and the cardholder, allowing you time to contact their credit card company and verify the order before shipping it.

Verify the Card Through the Credit Card Company

Trust your gut feeling. If something seems “off” about a certain order, thank the customer and tell them you need to check on status or some other excuse. Take the time to get in touch with their credit card company and verify the legitimacy of their order by making sure the card is in the hands of the right person. You can help prevent fraud from ever occurring, and you also potentially save a stranger a lot of hassle and headache.

For phone orders or large internet purchases, you may consider requesting the customer to fax you copies of their identification and credit card. If they’re unable to do so, politely deny them service in the name of safety.

Respond to Fraud Quickly to Avoid Further Use

Even with all these precautions, fraud can still occur. When this happens, you should spring into action! Contact the local police and report the crime, then contact the card holder’s bank and have them contact the cardholder to make them aware of the situation. If you have the shipping address, alert the authorities in that city; you may be able to recover any lost merchandise. By being proactive in the fight against fraud, you can better secure your business and your income.

How Do You Fight Fraud at your Local Store?

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