Payment Tips

Credit Card Scams Merchants Need to Know About

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Josh Phelps
March 13, 2023


Almost 20% of US businesses fail before two years of operating. Although this may seem like an alarming statistic, there are steps you can take in order to prevent this from occurring.

Unfortunately, there are many different credit card scams out there that aim to take advantage of small businesses. The better you understand these, the easier it will be for you to protect yourself in the future when accepting credit card payments.

Let’s take a closer look at everything you need to know.

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Suspicious Email Addresses

This is one of the most common types of credit card scams you might face. If an email address used to make a purchase looks suspicious, it’s best to double-check before processing credit card payments. This could be anything from an obviously fake name to a misspelling in the email address. It’s important to remember that some scammers are good at hiding their true identities. The more vigilant you are, the better you will recognize email addresses like these.

Suspicious Transactions

It’s also important to be aware of suspicious transactions. These could range from customers making a large number of purchases in a short period of time or orders shipped to multiple different addresses. You can save yourself a lot of trouble by being proactive.

Large Orders With No Shopping History

In general, people will purchase more goods the better they know your brand. For example, it’s unlikely that somebody would spend thousands of dollars the first time shopping with a business.

If you have no history of this customer and they make a large order, this could be a red flag you need to investigate.

Different Cards From the Same IP Address

A situation like this can indicate a scammer trying to buy goods with stolen credit cards.

If you notice multiple purchases from the same IP address but different cards, it’s best to take extra steps before processing any payments. This becomes true with a higher number of cards.

For example, the use of two cards from the same IP address often isn’t a cause for alarm. The use of eight cards from the same IP address, though, certainly is.

Mass Account Modifications

This could include password changes, shipping address modifications, or any other alterations.

This could be a sign that a scammer has stolen someone’s account and is trying to use it for fraudulent orders. Unfortunately, this can be a difficult situation to overcome — scammers sometimes use dozens of compromised accounts at once.

A High Number of Chargeback Requests

When someone initiates a chargeback, it means they are disputing a transaction or are claiming that someone has stolen their credit card information. If you notice an unusually high number of chargeback requests, look into this matter. Chargebacks can be difficult for many businesses to deal with. This is especially true if they occur on a regular basis.

The Use of Virtual Machines

This means someone is using a computer to appear as if they are in a different location. This could be a sign of someone trying to hide their true location while making fraudulent purchases. Scammers sometimes use virtual machines to facilitate international shipping. They might be located in an Asian or European country but pose as if they are in the United States.

How Can I Protect Myself?

Although the number of risks may seem overwhelming, there are steps you can take in order to protect yourself. This will go a long way when it comes to circumventing fraudulent activity in the future. Let’s explore some of the most notable.

Require Extra Authentication

Depending on the type of purchase someone is trying to make, you may want to ask for additional authentication. This could be anything from a separate photo identification to the last four digits of their social security number. It’s important to keep in mind, though, that you should only require extra authentication for high-value items. Otherwise, you run the risk of inconveniencing your customers.

Take the Time to Dispute Chargebacks

Interestingly, many business owners are unaware that you can dispute a chargeback if you feel the customer is being dishonest or fraudulent. It’s important to take the time to look into these cases and do your due diligence before disputing them.

This will go a long way when it comes to protecting yourself from potential fraud in the future.

Utilize High-Risk Payment Processing Solutions

This is one of the best strategies for protecting your business from fraud. By utilizing a high-risk payment processing solution , you’ll have access to tools and resources that will make it easier to detect suspicious activity.

This is especially important for businesses that accept payments online or over the phone as these are more likely to become targets of criminals. When looking for a solution provider, be sure to consider both their reputation and the security measures they offer.

Researching past online reviews will also help you make a more informed decision. Take a look at what other people have had to say about their experience. This will provide valuable insight into what you can expect from a credit card processing payment solution.

Avoiding Credit Card Scams Is Easier Than It Seems

At first, circumventing credit card scams can seem overwhelming. The above guidelines will help ensure that you avoid problems you may have otherwise dealt with.

Looking for more information about what we can do? Reach out to us today to see how we can help.

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Josh Phelps is an experienced sales professional with eight years of expertise, including four years in payment processing. Throughout his career, Josh has successfully secured approvals for thousands of businesses, demonstrating his skill in navigating and optimizing the payment processing landscape.


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