Merchant Beware: 8 Warning Signs of Credit Card Fraud

With the increase in ecommerce sales and BOPIS (Buy Online, Pick-up In Store) within the past year, there has also been an increase in credit card fraud. According to Atlas VPN, financial fraud complaints in the United States grew by 104% in 2020 Q1 compared to 2019 Q1. With credit card fraud on the rise, it’s important that your business knows what to look for to prevent it from happening to you.

Your business can’t be expected to check every order, so we’ve compiled a list of warning signs that can signal you to look a little more closely.

1. A brand-new customer calls to place a large order and wants to pay via credit card
2. A customer wants to use multiple credit cards for one order
3. Orders that are faxed or emailed from out of state or unknown numbers
4. Large orders not the norm for existing customers
5. Call in orders from “employees” of a known customer asking for products to be delivered because they are now working remote
6. Requested shipping to a state you don’t normally ship to, or an out-of-country address
7. A purchase shipping to an address that is different from the billing address
8. Large orders that will be picked up by a separate shipper/delivery company

Not all of these necessarily mean that the order was placed by a fraudster, but each of these should raise a red flag. If there is more than one of these criteria on an order, it’s probably a good idea to check the order for fraud.

One way to counteract credit card fraud is to ask for documents in writing to ensure your business will be paid for these potentially suspicious orders. This could be as simple as a signed copy of the actual order stating the customer will pay the amount due or a signed document authorizing your business to charge their credit card. It’s also important to make sure that you’re not letting your excitement drown out your suspicion. If your gut says the order is suspicious, it’s best to check it out or get a signed document allowing you to charge the customer. Another helpful document can be a copy of the driver's license of the person ordering. If you get one, make sure it looks legitimate; sometimes fraudsters will send you fake IDs. So, take a close look and make sure the name on the license matches the name on the credit card.

No one wants to be a victim of credit card fraud, either as a seller or a buyer. With these tips, you can lessen the chance that your business will be the next victim.

Download ECI"s new whitepaper Merchant Beware to learn more about how to protect your business from credit card fraud.