Credit Card Fraud

Many people use credit cards as their preferred method of payment. Unfortunately, the use of a stolen or forged credit card is also popular among criminals. You and your employees should follow the strict acceptance procedures set by each credit card company and keep in mind the following points to further reduce your chance for loss:

  • Keep a copy of credit card agreements on file for easy retrieval.
  • Post a procedural guide for credit card transactions next to the register. 
  • Have employees initial credit transactions in the event of a discrepancy. 
  • Install a telephone at the register; post authorization numbers nearby. If uneasy about a transaction, call the credit card company and ask security personnel for advice before completing the transaction. Do not return the card until they instruct you to do so. 

Protect yourself and your customers by keeping credit card transactions confidential. Thieves can obtain names and numbers from the trash and use them for fraudulent mail or phone order scams. Charge backs can occur if a cardholder disputes any charges, especially in mail or phone orders. Precautionary guidelines are available for each card company. Stay on the alert for merchants, typically telemarketers, who ask you to deposit their sales drafts. When a licensed business owner or employee runs the sales draft for another business, the process is known as factoring.

Chances are you will never be approached with such a proposition. If you are, contact your bank immediately. If you become involved in factoring, you will be held responsible for all financial losses and, if fraud is involved, you will face criminal charges.