Credit Card Fraud and How You and Your Small Business Can Fight It

Fraud is a big problem. How big of a problem is fraud? According to Intuit QuickBooks, fraud results in global revenue losses of nearly 5% of worldwide revenue, approximately $3.7 trillion each year. Even more alarming is the fact that small businesses suffer greater monetary losses from fraud than bigger businesses. There are things you can do to fight fraud and prevent it from becoming a larger problem for you and your business.

Fraud Warning Signs to Consider

Visa cautions businesses that these common warning signs may indicate fraudulent intentions. These are the kinds of purchases that shoppers are making and something you should be aware of.


  • First time customers, people you are unfamiliar with. This doesn’t mean every new customer is trying to steel money from you, but be aware of any suspicious activity

  • International shipping addresses
  • Larger than average orders
  • Multiple credit card transactions originating from a single IP address
  • Multiple transactions charged to one card in a short time frame
  • Orders including multiples of the same items
  • Orders placed online using free email services. This could be a little tricky because of Gmail and Yahoo and people can have as many emails as they want. Pay attention to unusual orders such as large quantities or multiple orders of smaller items
  • Orders requesting rush shipping or overnight shipping
  • Orders that have a large number of expensive items
  • Transactions containing similar account numbers
  • Transactions placed on multiple cards all shipping to a single address

Using the right tools for preventing fraud can help you avoid many potentially fraudulent transactions.

Ways to Prevent Fraud

Fraud is so prevalent today there are different steps to keep in mind for preventing fraud when cards are present for the transaction versus occasions when there is no card present

Preventing Fraud When the Card is Present

These are a few things you can do to help reduce the likelihood of fraudulent credit cards purchases when the actual card is present:


  • Check that the name on their ID matches the card and that the signatures match
  • Look for appropriate security features, like holograms, on the credit card
  • Verify that the card remains unaltered
  • Double check the name, last four digits of the card, and signature on the receipt to make sure they all match

Little things like these allow you to prevent fraud or catch would-be thieves in the act

Preventing Fraud in Card Not Present Transactions

When the card is not present, your ability to prevent fraud is somewhat limited. That doesn’t mean there isn’t anything you can do.


  • Requesting the verification code for the card
  • Checking for invalid or missing expiration dates
  • Request more information before authorizing the transaction

Doing these steps often indicate the customer doesn’t have the actual card in hand

Fraud Prevention Tools

There are several tools at your disposal to assist you in your efforts to prevent fraud when customers make purchases in your store and on the world wide web.


  • Address verification services
  • EMV chip terminals for more secured transactions
  • Card-issuer fraud prevention tools available through most high-profile credit card companies
  • CVV numbers. The three digits on the back on the card, except American Express uses four numbers for their CVV
  • Use only PCI compliant merchant services

Ultimately, you should contact your credit card processing service if you feel you are dealing with a potentially fraudulent situation to request a Code 10 authorization. It’s a subtle means of alerting your processor that suspicious activity is going on.

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