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Fighting Payment Card Fraud: It's Your Business
"ATLANTA -- Every year, millions of dollars of merchants' profits are lost due to fraudulent activities. For a business owner, losing any amount of money to fraud is too much. The good news is that improved awareness can go a long way in preventing most fraud, says Jerry Iannacci, risk and investigation director for Global Payments Inc."You and your staff are the best defense against payment card fraud," he says. "The most important step you can take is to become educated about fraudulent activities and proactively protect yourself against them."Learn to Recognize Altered or Counterfeit CardsProtect your business by learning to recognize the signs of fake or altered payment cards. Make sure your staff visually inspects every card and its security features before you accept a payment card for a purchase.Call your payment processor or bank provider if the card presented looks suspicious, or when you notice any of the following:The embossing on the card is illegible or the embossed numbers do not match the account number on the sales draft, or at the terminalThe name on the card does not match the signatureThe hologram is not clear or does not moveThere is no expiration dateThe card does not start with the correct numeric digits, as established by the card associations"And," Iannacci cautions, "always check with the card associations to educate yourself and keep up to date with the specific guidelines and security features of their cards."It's Safer to SwipeSwiping the card helps reduce fraud and chargebacks to your business, Iannacci says. Fraud often occurs when the thief damages the card on purpose so that you are forced to manually enter the number in the electronic point-of-sale terminal. Manually entering bypasses many of the anti-fraud features placed on the cards, as the magnetic strip information cannot be electronically transmitted to the verification center for authorization.If you have an electronic point-of-sales terminal, swipe every card presented for payment. If a card does swipe, make sure the card number and the number appearing on the terminal match. If swiping the card doesn't work and you manually key the transaction, make sure to re-check the security features and take an imprint of the card. By performing this simple step, you can help reduce chargebacks.Protect Against Fraudulent ReturnsFraudulent returns should be another major concern for merchants. In this case, criminals attempt to defraud you by returning items that were never purchased and pocketing the money. In some cases, merchants don't even realize they have been victimized until it is too late or the perpetrators include the merchant's own occasional unscrupulous employee.Take the necessary steps to ensure this doesn't happen in your business:Keep your point-of-sale (POS) terminal passwords confidential and stored in a safe place, and change them oftenAlways be aware of who has access to your terminalMake sure to follow the proper procedures when it is time to shut down your POS terminalKeep a record of your balances each day so you can identify a problem as soon it occursProvide continuous training to your staff on the awareness and deterrents to fraudCheck with your card processor on current incentive and reward programs for diligent employees who identify fraudWhether it's a different twist on an old scam or a new fraud altogether, there will always be someone who attempts to run off with a merchant's money. When you and your staff are prepared and have the knowledge to recognize and correct fraudulent transactions, you'll be helping to beat the thieves at their own game, Iannacci says.Visit Global Payments Inc.: www.globalpaymentsinc.com This article is new this week in The Business Journal's small business how-to section. To see what else is new, click here or click on the "how-to" tab at the top of The Daily Business Journal Online home page."