One of the great things about the Internet is anonymity. One of the worst things about the Internet is anonymity - especially for the ecommerce merchant. If you utilize payment gateways for credit card transactions or are considering doing so, it is important to ask the gateway provider about their pre-screening procedures (this precedes actual credit card payment processing). Some offer none at all!
Many payment gateway providers use the Address Verification System (AVS). AVS provides some protection by comparing the billing address on the web order form to the address held by the cardholders bank - But:
The transaction may be approved even if the address verification information does not match! The merchant faces the possibility of chargebacks if the payment gateway decides to continue with the transaction on a questionable match.
The following strategies are worthwhile considering if you sell goods and services directly from your site using your own in-house payment processing. Some of the strategies can also be used in conjunction with third party credit card processing systems. It will take a little longer to process each day but it's truly worth it, especially for overseas orders.
1. http://www.searchbug.com/peoplefinder/verify-email-address.aspx is a great tool to check the validity of the email address provided for each order.
2. http://www.whereis.com will verify that the street number and name actually exist in the suburb provided.
3. Check orders placed with a PO Box address by calling the customer.
4. For some it's a little over cautious but be weary of email addresses ending with @yahoo, @hotmail, @gmail etc, as these are free and generally not verified with real details.
5. Utilise your postal companies ‘Person to Person’ service for all orders. This service requires the credit card holder to show ID and sign for the goods on delivery
6. Follow up orders with incomplete information
7. Ask that orders over a certain value are processed only if a faxed copy of the credit card, front and back are provided. This will prove that the owner of the card actually has it in their possession rather than just the numbers on a piece of paper.
8. Make your anti-fraud policy visible. Visual deterrents are still one of the most effective ways of minimizing crime. In a bricks and mortar store, signs and cameras do prevent shoplifting to some degree. Why not use the strategy on your site?
9. Finally. When in doubt, call the company.
Call the relevant credit card company BEFORE attempting to process the order if in doubt... that extra 5 minutes may save you big dollars! Even if the order has been processed through automated systems, it's not too late to follow up before shipping the goods or providing the services. The idea is to deal with the situation before the cardholder is issued a statement, notices something on it that they didn't purchase and then contacts their bank.
