How to Avoid Credit Card Fraud and Charge Backs

Credit card transactions made through e-commerce platforms are notoriously fraudulent. The anonymity of the web and the ease through which online thieves find and use stolen credit cards means that businesses that cater to online consumers face many more dangers than traditional brick and mortar stores. That's why savvy business owners should know a few key steps for making sure they aren't the object of substantial credit card fraud.

Use Secure and Efficient Authorization Processes

One of easiest ways to create a safety net around your credit card payment process is to ensure that all of your credit card transactions go through a proper authorization process. Failure to do so can result in charges that are denied due to credit card cancellation or insufficient funds.

Authorization should be immediate or as close to it as possible. You should never have to wait for authorization, since the chances are greater of insufficient funding when it is performed at a later date.

Authorization should take into account address verification. This can take place two platforms: email and physical address. Authorizing the physical address means that the card user is most likely the actual card holder. Authorizing the email address increases the chances that the transaction is valid.

Authorization should be repeated, as needed. If your company has to put a credit card transaction on hold (due to back-ordered merchandise, a delay in shipment, or a wait for the product's release), it is important to do the credit card authorization a second or even third time. This is not only required by many card companies, but it means that a card has not be stolen or funds withdrawn in the meantime.

Use a Verification Provider with Complete Support

Of course, all the automated authorization processes in the world won't keep your company completely free of credit card fraud or charge backs. If you plan to work and sell online, you need to make sure you have a company behind you who is dedicated to just that - decreasing incidences of online theft and making the payment process as smooth and efficient as possible for both you and your customers.

When you sign up with an online merchant account provider, you should be getting the kind of credit card fraud support you want. If you feel comfortable moving forward with address verification, it's important to find a company that can do just that. If you want to increase the amount of protection you get, you might also want to look into card verification methods, which require cardholders to enter the 3- or 4-digit code on the back of their card. These processes . and any recent developments like increased password security . should always be an option.

Short of opening a cash-only brick and mortar business, the chances are that you will encounter attempted credit card fraud on some level. Protect yourself and your business by ensuring you have a valid authentication process in place and a merchant account provider you trust.