Preventing Credit Card Fraud: Are You Making Sure Your Customers Are Legit This Holiday Season?

For consumers, the holidays mean buying all the items our loved ones have wanted all year, and receiving all those great gifts we’ve wanted but would not buy for ourselves. For online store owners, this can mean record sales year after year.

And just one credit card fraudster can ruin the holiday season for both a consumer and an online store owner.

There are quite a few steps you can take to market your store for the holiday season. As the traffic comes in, what are you doing to protect yourself from the wrong people ordering your goods or services? Here are a few precautions you can take to prevent the headaches associated with online credit card fraud:

1.) Manually check your orders. Fraudsters take advantage of different ship to addresses during the holidays as well as the number of orders that change addresses mid-delivery. If you get an order shipping to an address in an odd location or a large order, be sure to call the customer prior to shipping.

2.) Be sure to check the IP address where the order was placed. If you find that it doesn’t match any city on the order, you should be cautious before shipping. This post on protecting yourself from chargebacks includes a screenshot of what the IP address looks like on each order record in a Volusion Admin Area.

3.) Be aware of countries that tend to harbor internet fraud. High problem areas tend to be China, southeast Asia, India, the former Soviet Union, the Eastern block of Europe, and East Africa. If you see an IP address from one of these countries, shipping the order might not be worth it unless you can contact the customer and verify the card.

4.) Prevent credit card fraud in the first place by hosting data securely. A survey by CyberSource speculates that online credit card fraud has gone up in 2007 by 20 percent already. Be sure to protect credit card data by complying with PCI/CISP standards. This will greatly reduce your risk of getting your servers compromised and your customers’ credit card information stolen by hackers. You can see if your hosting company is compliant by checking Visa’s list of CISP certified hosting companies (don’t worry–Volusion is on the list!).

Enjoy your holiday sales this season, but don’t forget to prevent the post-holiday hangover by taking the steps to prevent chargebacks.


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