The Holidays are upon us. Tips for avoiding fraud this holiday season.

Credit card fraud is a serious issue that can cause significant financial losses to businesses. During the holiday season, fraudsters take advantage of the increased volume of transactions to steal credit card information and/or defraud businesses. Here are some steps businesses can take to protect themselves from credit card fraud during the holidays:

1. Always use EMV or NFC payments: EMV-enabled cards (chip cards) and NFC (contactless cards and devices) are more secure than magnetic-stripe cards because a one-of-a-kind code is created for each transaction. Transactions processed as EMV or NFC protect the business from losses due to stolen credit cards by the card issuers. The chargeback liability for accepting stolen EMV or NFC transactions falls on the card issuer and not the business.
   
2. Be aware of potential fraudsters: Watch for customers who seem not to be price-sensitive or looking to make purchases that are outside of your normal transactions. Fraudsters are not price-sensitive and tend to want to maximize what they spend as it’s not their money they are spending. These fraudsters will usually come in ready to purchase way more than normal customers and don’t care about things like shipping or delivery costs. The holiday season helps them blend in a bit more as spending per customer tends to go up during the season.
   
3. E-commerce businesses (CVV&AVS): Unlike EMV, merchants who do not physically have access to the customers’ cards are fully liable for accepting any stolen transactions. That’s why it is important to make sure your website requires CVV numbers and Address Verification (AVS). While these are not foolproof, they do give you a bit of peace of mind that the person making the purchase at least knows the CVV code and what address the card is billed to. While not possible for many businesses, shipping to only the billing address on the card may offer you a bit more protection. If there is a dispute, having proof of delivery to the customer’s billing address offers you more protection.
   
4. Keep track of purchase prices: Return fraud can be a larger-than-normal issue around the start of the year. As people take advantage of seasonal discounts only to later return products for the full non-discounted value. Even without a receipt, many stores will offer store credit for returns. However, if you don’t know at what price the item was originally sold for, you may be crediting more than should for the item. Having a Point-of-Sale system that logs customers by name or ID along with a detailed list of items would allow you to look up customer purchases even if they don’t have a receipt.

And arguably the best two for last:

5. Fraud at Point-of-Sale: It seems obvious that you would restrict access to your point-of-sale, but that’s not just a physical thing. Fraudsters will many times try to manipulate you or your employees to do something with your point-of-sale device that puts you in jeopardy of not receiving funds or receiving an unwinnable chargeback. If a customer tells you that they need special approval or you need to enter a special code or approval number on your device, do not accept the transaction without first talking to your processor. The only valid approval codes come through your processor, either directly during the NORMAL transaction process or through a process your processor tells you to go through. Approval codes do not come from customers or the number on the back of the card.
   
6. Knowing your customers: You know your business and its customers, so if you start feeling that a customer or an order feels off, at least stop and think. Sure, on some sales, it’s going to be small enough that it’s not worth risking a relationship with a potential customer, while on others you might want to ask for a more secure form of payment. Legitimate customers tend to understand, while fraudsters tend to push harder and harder about doing a transaction their way. If a customer is pushing to get something done their way, have an excuse or two. Maybe it’s a store policy, your processor told you not to, or maybe your payment device is not working.

The good news is there is a relatively small number of fraudsters, and most are looking for the easiest targets possible. These are just a few things to consider and watch out for, and by doing so, you have made your company a harder target. Train your employees on what to look out for and get ready for the holiday season!!!