Better Ways for Sellers to Block Use of Stolen Cards

Research suggests that although credit card fraud is a major problem, it actually affects only a tiny percentage of online purchases. It is foolish indeed to apply a “one-size-fits-all” method that has unintended adverse consequences. Therefore, a balance should surely apply between caution and practicality.

In another article, I ranted about sellers insisting on paying a few cents into a buyer’s bank as a means of preventing use of stolen credit cards. That can be highly irritating for the buyer because it implies fraud but it also delays the shipping, one or other of which potentially prompting the customer to cancel the order and never return. For some sellers, anything other than that automated method may be rejected because “it takes too much time”, don’t have the staff to do it”, “not the way we do things here” and so on.

What will be proposed in this article requires more effort, attention to detail and probably a change of mindset. However, the techniques will work to help protect against fraud, without offending and/or losing a valid customer.

Orders that should cause concern

  • Start by checking in your own record of “suspect orders.” (see below) I f a buyer’s details appear in those records with details of what actions was taken, you are well on the way to eliminating a potential problem and can deal with it appropriately.
  • Be cautious if the billing and delivery addresses are different. However, there may be perfectly valid reasons, especially if the billing is to a PO Box number but the goods are wanted to a physical address. In this author’s opinion and despite the advice from the banks, automatic rejection of orders with PO Box number addresses is just another way to annoy the customer – unless a very good explanation is provided for this policy.
  • It should be mandatory for all customer orders to include a contact phone number as well as an email address, so if anything looks dodgy, a phone call to the buyer is easily possible. Failure to connect or a connection to some bizarre voice message will be an obvious warning sign. Another method is to use “reverse number” software to see if there is a match. If not then by all means query the order. (this solution is available online)
  • Buyers using dodgy-looking email addresses should be regarded as fraudulent. Most honest persons will have something readily identifiable in their address, meaning a personal name or a business name. Of course, the seller can and should promptly send a simple message requesting confirmation that the order was placed by that person. Then watch to see if your message bounces or if there is no response. If the address referred to a business, it is simple to search for that business on the web. If not found, there is reason to be suspicious.

How to make the query

Have someone with a pleasant manner make a phone call to the buyer. While the contact could be done by email, the personal touch is far more likely to get positive results and provides a far greater opportunity to assess the situation without offending a legitimate buyer.

  • A sensible reason for the query MUST be provided. Any reasonable person will understand if the query is (a) prompt, (b) polite, (c) devoid of any adverse inference and WITHOUT insinuating that a problem applies to this particular customer.
  • A small “white lie” seems perfectly appropriate. Rather that say anything that may be construed as an accusation, it would be better to say “we are having a problem with our systems and though no fault of yours we cannot process your payment.” “Do you have a different card or could you please pay by bank transfer?”
  • Any hostile answer will raise the “red flag” and allow the seller to decline the order for “technical reasons and with regret.”
  • Always ask for the name of the customer’s bank. Someone using a stolen card is unlikely to know the answer.
  • For high value transactions, request a “verification check” This is a service operated by VISA and Mastercard where the customer has a password authorised by their bank. It does require the buyer to sign up for this but a legitimate buyer is unlikely to decline.

Keep records

Nothing more complicated than a simple E XCEL file (or any other spreadsheet or a database) is needed to maintain a record of suspect orders. It will take only a minute or two to enter the details. The suggested fields are as follows:

The date of the order

Buyer’s name

Buyer’s phone number

Buyer’s email address

Requested delivery address

Item ordered

Credit card number, expiry date and CCV number

Reason given for query

Result (order processed OR declined)

Excel allows searches on any of these fields to make it easy to identify any repeated attempt

Share your concerns

In obvious cases of potential fraud:

  • Report them to your bank. They will have the professional staff to investigate further, also to protect you in the event of funds being stolen from you.
  • Report the matter to the card issuing company
  • In extreme cases, also report the matter to police.
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