By using our best practices when it comes to credit card processing, you'll be able to protect yourself from chargebacks and fraudulent activities.
There are two types of transactions:
- Card-Present - this is when a customer presents a card in-person and you swipe, dip or tap the card to process it.
- Card-Not-Present - this is when the credit card number is entered manually. Examples include online purchases and orders over the phone.
Let's explore both of these in more detail.
Best Practices for Card-Present Transactions (In-Person Orders)
Firstly, always try to swipe, dip or tap a card during the point of sale. A card-present transaction typically has lower fees and is deemed less risky. Try to limit manual entries or typed-in transactions as much as possible.
Secondly, make sure to follow the proper procedures when processing a transaction. If it's approved, ask the client to sign the sales receipt. If it's declined, return the customer's card and kindly ask for a different form of payment or another credit card.
Here are some additional practices to help reduce the likelihood of fraudulent transactions during in-store purchases:
- Validate the physical card and make sure it has not been altered in any way.
- Ask for a signature and make sure that the signature on the receipt is the same as the one on the card.
Best Practices for Card-Not-Present Transactions (Typed-in or Online)
- Verify that the cardholder’s address matches the address that's on file at the customer's bank. Another thing you can do is verify the security code which is found on the signature panel of the card. On American Express cards, you'll find this number on the front. If, at any time, you become suspicious of fraud, probe and ask the client more questions.
- Make sure the client receives a delivery item in a timely fashion. The transaction date should be the same as the date it was shipped and no greater than seven days from the date it was authorized. Do not charge a customer until the items have been shipped.
Tips to Prevent Chargebacks
- Clearly inform customers about the return, refund, and cancellation policies at the time of sale.
- Process credits in a quick manner.
- Immediately respond to requests to cancel recurring payments or when the customer specifies.
- Make sure that the merchant name that appears on the customer's statement is clear to the client. If it's not, let the customer know what to expect when viewing the credit card statement.
Tips to Prevent Fraud
Remember, credit card fraud can occur at any time, whether a payment is being processed at your store location or from your online booking page.
When identifying potential warning signs for fraudulent practices, be aware of customers who:
- Purchase a large number of items, disregarding size, style, color or price.
- Purchase a lot of items when the store closes.
- Purchase many of the same items multiple times.
- Request an overnight or rush shipping of delivery items.
- Are first-time shoppers.
- Make in-store purchases using very similar card numbers.
- Purchase a high volume of gift cards or services and ask for a cashier's check in return.