Protecting Businesses Against Credit Card Fraud

Protecting businesses against credit card fraud is a challenge. Credit card fraud costs not only money but also time and effort. Unfortunately, the only way to be completely safe from fraud is to refuse to use credit cards for any transactions. This is unrealistic for the vast majority of businesses, however. Thankfully, there are a few ways to minimize the risk of being the victim of credit card fraud.

Identify the Cardholder

Keep in mind that credit card fraud is technically theft. People commit fraud using someone else’s credit card, without authorization, to make purchases. This hurts the business as well as the cardholder. Cardholders can lose some or all of the money spent if their credit card agreement does not offer adequate protection. Additionally, businesses could lose the money they received and pay chargeback fees. Chargeback fees are what credit card companies charge to return money. These issues make it imperative to properly identify the cardholder before processing transactions.

Preventing Fraud

Protecting businesses against credit card fraud necessitates multiple solutions. It can involve verifying signatures and ID documents, checking card security features like holograms, verifying addresses, and asking for the card’s register ZIP code or phone number. This information helps certify someone is who they say they are and has the right to use the credit card information they give you.

Ask for verification codes during online transactions. This can help prevent unauthorized, automated use of credit card information. Preventing credit card fraud can also require having a sense of whether a transaction seems above board. A huge order from a new customer suggests you should do additional verification. You may also require extra verification for international orders, like contacting a bank to check the information you receive. Confirming orders with customers by phone or email can also help authenticate transactions.

Some credit card fraud is even committed by authorized cardholders. This is called “friendly fraud,” where customers say they never ordered a product or service to get it for free. Use the AVS and delivery confirmation to combat this kind of fraud.


Focusing on fraud prevention saves you time and money. If you have a lot of credit card transactions, fraud prevention can be time-consuming. In that case, consider using a reliable provider to help mitigate your risks of overlooking fraudulent transactions. This helps you prevent fraud with less work on your part.

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