Credit and debit cards are a ubiquitous aspect of modern society. These little pieces of plastic were an optional convenience once, but now it can be difficult to manage daily life without at least one. Paying the cable or phone bill is so much easier with a card to use, versus making the trip to the brick and mortar store or office in order to pay with cash. At this point, checks are approaching obsolete.
Of even more vital importance to many is the missed opportunities one would lose online shopping without access to a credit or debit card. Or worse, what if no merchants accepted such payments online at all? Given the possibility of fraud, such a move would hardly be surprising. Luckily, there are more options available to merchants, but those options come with some information that those merchants need to know, as does anyone contemplating a foray into a field where card not present transactions are made. This overview will provide a foundation of knowledge that will help make decisions about what steps to take next.
Who Pays For Credit Card Fraud?
Unfortunately for those looking for a nice clean answer, when a fraud is reported and the credit card company initiates the chargeback credit card stage, the recipient of that chargeback credit card ?s receive only accounts for one part of the cost of a stolen credit card being used.. For example, in the well known breach of Target?s security that protected their credit card holder?s information, the first stage of the loss occurred at Target with the lost inventory, followed by the banks, who will expect to be reimbursed by Target both for the purchases and the cost of reissuing all of the credit cards to the real card holder. This cost will fall entirely on Target because their security was breached, but there are other circumstances where the banks will be held responsible. This is bad enough for such large companies, but for small businesses, it can destroy the entire operation.
Basic Ways To Protect Your Business
First, know the warning signs of a fraudulent purchase. Some of these include a purchase for next day that is abnormally large or differing shipping and billing addresses. Also, make sure you are collecting ample information from customers, in particular, the security code normally on the back of the card and the complete address on file with the credit card company, including the zip code.
The chargeback credit card holders initiate does not have to occur as the result of a purchase from your business. Double check the procedures you use in card not present orders and make sure you are not at risk today.