Fraud Prevention Guide for Point of Sale Credit Card Processing

It’s not enough that credit cards have the newest chip technology or that your store is equipped with the latest POS software, the threat of being hacked is always present no matter the technology – but with the proper safeguards and guidelines, you can prevent fraud from happening in the first place.

Knowledge is Power

Education is the best weapon you’ll ever have, so you and your employees should receive continuous training regarding fraud and potential fraudulent transactions. You should be constantly updated on the latest news and trends in security to avoid and prevent fraud in your establishment. Take this recent attack on Starbucks payments that targeted auto-reload, gift cards and linked credit cards.

The Truth is in the Card

You and your staff have to be familiar with the latest in credit card security features and technology. Always ask for the card and take a minute to check all the features, such as the hologram, the Bank Identification Number and the account numbers themselves for any alteration. Also be sure to check the magnetic strip and signature strip for signs of tampering.

Don’t Accept Damaged or Worn Out Cards

Legit credit card owners know the hassle of carrying around damaged or worn out credit cards and make it a point to ask the bank for a replacement. Fraudsters damage cards on purpose so the magnetic strip can’t be swiped, negating the security features of the card. Never manually enter the card number of damaged or worn out cards. If the customer insists, swipe it anyway. If it works without a hitch, continue with the transaction but continue to be vigilant. If it doesn’t work, kindly inform the customer that you accept other forms of payment.

Signatures are There for a Reason

It takes less than 15 seconds to really check and scrutinize signatures if they match, but a lot of cashiers barely glance at them. Implore your staff to always check for misspellings or anything else that stands out as suspicious.

Play the Name Game

A good strategy would be to nonchalantly address the customer using the name on the credit card. If the person barely responds or nothing seems to register, politely ask for photo identification so you can compare the picture on the ID and the signature.

Using Someone Else’s Credit Card is a No-No

Some crooks will carry with them a “Letter of Authorization” and give you a sob story about why the owner of the credit card can’t be present for the transaction. No one is allowed to borrow or use the credit card of another person, regardless if she’s a daughter, friend or wife. The only person authorized to use the credit card is the cardholder. This should always raise a red flag.

Keep Your Merchandise Close and Closing Time Strict

Keep the merchandise near you at all times during the transaction, especially when you’re still processing the credit card transaction. This will prevent the fraudster from running off with the merchandise when the credit card doesn’t work. Some crooks will even try to distract you by causing a scene or feigning anger because they purposely waited to purchase at closing time to rush the clerk during payment. Keep a close eye out for these types of behaviors.

Keep All Transaction Records

Some legitimate card holders will try to pull a fast one on retailers (when they don’t like what they purchased) by disputing the charges at a later date. This is fraud and should also never be tolerated. You can protect yourself by keeping a record of all transactions made, including the customer’s signature and evidence that the card was swiped and authorized. Banks can assist you here, so don’t hesitate to ask for help. Having a reliable POS system would also help you pull up all necessarily information with a few clicks to ensure you have the corresponding transaction.

An ounce of prevention is better than a pound of cure, so make sure you and your staff are updated on the latest security trends against fraud. Always stay on alert and be wary because crooks come in many forms and you’ll never know who’s legit or a wolf in sheep’s clothing.