5 Ways of Protecting Online Merchants from Fraud
There are many cases of merchant fraud reported. Protecting yourself goes a long way in ensuring that you avoid the associated costs and harms caused by the fraud.
What is Merchant Fraud Protection?
Merchant fraud protection is the protection of sellers from any chargebacks or fraud. Many businesses have experienced fraud at least once when dealing with online payments.
According to a 2021 study by the Ponemon Institute and Forbes Magazine, 81% of the companies surveyed said that the digitization of their businesses has made them more vulnerable to online fraud.
If you want to learn more about fraud protection, here are five merchant fraud protection tips that businesses should know.
1. Be Wary of Suspicious Email Accounts
If you feel like the email address is fake, be sure to do some digging before confirming any orders. This will save you from any fraudulent activities.
Payment processing companies usually check orders for signs of fraud. However, business owners need to take time to review orders manually.
2. Always Ask for the Security Code
Merchants should always ask for the card’s security code when verifying purchases. This is the unique three or four-digit number found on the back of credit cards and can’t be easily accessed unless fraudsters have the card in hand.
Websites like Ethoca chargeback services currently offer fraud detecting services that safeguard merchants from online scammers.
3. Be Careful with P2P payments
Peer-to-peer payment systems (P2P) like PayPal and Zelle saw a significant increase in users in 2020, as more customers resulted in online payment methods.
This LinkedIn article by Rodney Wead sheds more light on the risks of online payments and what you can do to prevent fraud.
4. Train Your Employees
Whether you have a big or small business, it’s important to allocate some resources to merchant fraud protection techniques that will safeguard your business. You can start by training your employees on ways to identify credit card fraud and how to use fraud prevention techniques.
Some of these techniques include:
- Not allowing someone to use another person’s credit card
- Double-checking signatures
- Asking for IDs
- Always using the correct check-out technique
5. Beware of Different Billing and Shipping Addresses
Many credit card thieves use this method when committing fraud online. In case of any fraud suspicion, you can request telephone numbers for both addresses or use a website that can verify the address.
If a purchase feels ‘off,’ be sure to do some digging before completing the order. This will save your business from any significant losses.