Black Friday, Small Business Saturday and Cyber Monday are here, and small business owners are making the final preparations for their busiest time of year. Thanksgiving weekend marks the official beginning of the holiday shopping season, which accounts for up to 50 percent of annual revenues for many retailers, according to JLL’s 2015 Retailer Holiday Survey. In 2014, U.S. consumers spent nearly $51 billion during the four-day Black Friday weekend alone, and total holiday sales topped $616 billion.
Unfortunately, the holidays are also peak season for credit card fraud, as identity thieves use stolen card numbers to make purchases, often leaving merchants to foot the bill. Fraud cost U.S. retailers approximately $32 billion in 2014, according to Business Insider, an increase of nearly 50 percent over the previous year. Although nobody is immune to these scams, by following a few best practices, you can help to protect your customers and your business by ensuring that all of your card transactions are legit.
- Use EMV-enabled terminals
Your in-store credit card processing system should support the new EMV-chip cards, which can dramatically reduce fraud. Unlike the traditional magnetic strip cards, EMV cards include a special microchip that generates an encrypted code for each transaction, making it nearly impossible to steal the card data. What’s more, if you’re not using an EMV card reader, your business could be on the hook financially for fraudulent transactions under the EMV liability shift that took effect on October 1, 2015.
- Confirm the customer’s identity
If the shopper is using a magnetic strip credit or debit card at your brick-and-mortar location, check the back of the card for a signature and ask for a driver’s license or other photo ID as a condition of accepting payment. Make sure all of your employees are trained on this policy and understand that exceptions are not allowed, even for friends.
- Don’t accept damaged cards
If a card looks like it has been tampered with or the magnetic strip does not work, ask the customer for a different form of payment. Never manually enter card information, especially if the card looks damaged or altered in any way. It’s better to inconvenience one customer by being overly cautious than to unwittingly play a part in identity theft.
- Stay alert
Identity thieves are often masters of distraction. They may be very talkative, rummage in their bags, or act irate and in a hurry to keep the cashier focused on their actions rather than the card they’re using. A potential fraudster also may try to make a large purchase just before closing, when clerks are tired or eager to ring up a large sale at the end of their shift. Make sure your employees follow rigorous card authorization protocols, regardless of what is happening around them, the size of the purchase, or the time of day.
- Check CVV numbers and AVS data
For online purchases or transactions by phone, requesting the CVV code helps ensure that the buyer physically has the card in hand. (The new EMV chip cards do not have a CVV code, however, so this safeguard is not foolproof.) Also be sure to use the Addresses Verification System (AVS) to confirm that the billing information matches what the card issuer has on file for the street number as well as the zip code.
- Comply with PCI Security Standards
Part of your responsibility as a merchant is to protect your customers’ information from identity theft. Ensuring that your systems for credit card processing and data storage meet PCI DSS guidelines can help prevent fraud while also safeguarding your business. The fallout of a security breach can include lawsuits, insurance claims, and government fines, in addition to serious reputation damage and a lost business. Learn more about the PCI Compliance tools from Integrity Payment Systems to help your business achieve and maintain PCI compliant status.
Integrity Payment Systems takes credit card fraud seriously, and we are committed to put a stop to this growing trend. We make it our mission to help educate merchants on the tools and strategies available to them to reduce the risk of counterfeit transactions. By learning a few best practices that you can use to prevent fraud at the point of sale, as well as for online purchases, you can protect your customers’ valuable financial data and keep the holidays bright for everyone.