Unfortunately most online stores have probably been the victim of online or credit card fraud at some stage. While the World Wide Web brings fabulous global trading opportunities, it also brings unscrupulous players who are always on the hunt for ways to scam or defraud online traders. Sad but true!
My own business experienced this problem a couple of times in the last two months. Our online credit card transactions are set up in such a way that we don’t see the credit card details. When a customer processes an order and chooses ‘credit card’ as a payment option, this is handled by a third party system and authorised by the bank before we are sent the approval and process the order.
Seems simple enough right? Wrong.
Due to the way banking processes work, it’s usually not until months later that you find out that a transaction has been fraudulent – in other words, someone has used a stolen credit card to pay for the goods. What usually happens is the owner of the credit card makes a complaint to the bank, they contact you (the business), and the bank debits the money from your account. Usually you have already processed the order, so you are out of pocket for stock and also haven’t been paid for it.
This is something that you will never be told when starting an online store. I have found out the hard way, by experience. However, recently I discovered a boon after filing my third Police report, when the officer in charge gave me the web address of a site where suspect IP addresses can be checked to see if the location matches the location of the address on the order. It’s a sure bet that if the IP address is in China or Nigeria and the order details are from someone in Melbourne, we’re talking about a fraudulent transaction.
This is an great tool for any online business. Simply put the IP address into the relevant field on the site and see where it originates. http://centralops.net/co/ We use it for all our credit card orders now and say a huge thank you to the constable in question for sharing it with us.
Online credit card fraud is something all online stores need to understand and know how to minimise and counteract it particularly over busy trading periods like Christmas. And one more thing – go with your gut. If an order seems strange or odd somehow, then listen to your intuition. Guaranteed you will be right and it can save you a lot of money and heartache.
Happy online trading!