Close up shot of a person holding a credit card

How to Prevent Fraudulent Credit Card Use

Loss from credit card fraud and unnecessary chargebacks are not 100% preventable. However, online retailers can take measures to make it more difficult for scammers to cheat them through online credit card purchases.

Learn to recognize the warning signs of a possibly fraudulent transaction and use the measures below to prevent it from going through or discourage the scammer.

7 Signs a Credit Card Purchase Maybe Fraudulent

Set alerts to monitor these types of transactions and require additional security steps before the customer may cash out:

  • Different billing and shipping-to addresses
  • Total order size far above average
  • An order consisting of several big-ticket items
  • Several orders to the same address using different credit cards
  • International shipping (lack of international laws makes prosecution difficult)
  • Overnight or same-day delivery request
  • Orders with several of the same item if this is unusual

It might seem counterproductive to a goal of expediting the check-out process to add extra steps; however, most consumers are understanding if the site explains that these measures are necessary to prevent loss from fraud and subsequently higher prices. Lately, it has been noticed that most of the australia online casino sites are gradually tightening up the verification and check-out process to curb any fraud.

5 Online Purchasing Security Measures to Prevent Credit Card Fraud and Chargebacks

It is not necessary to add all of these extra steps to every purchase. However, buyers who set off a red flag based on the warning signs above should have to comply with one or more of these additional verification measures:

  • Address Verification, or AVS- This system verifies that the billing address provided matches that on record with the cardholder’s bank. This does not prevent fraud if the scammer has the cardholder’s address.
  • Credit card security code verification- Different credit card companies use different codes, but this security measure requires the buyer to enter a code printed on the card. This prevents fraud if the scammer does not physically possess the card.
  • Display contact information and a return policy prominently on the site and in an order confirmation email to help with fraudulent chargebacks. The onus is on the merchant to prove the transaction was valid; this helps demonstrate that a chargeback was not the only option.
  • Require a signature on receipt of an item, especially for big-ticket products. Incorporate the cost of this shipping feature in the price of the item. This is useful in proving delivery in chargeback disputes.
  • Use the company name on credit card statements. Most chargebacks are a result of the customer forgetting they made a purchase, especially if the credit card statement shows a numbered company instead of a name.

Credit card fraud and chargebacks are unavoidable. Reduce loss and the amount of fraudulent transactions with extra security steps. One particularly troublesome problem is that access to an international customer base opens the door to online purchasing fraud from countries well known for these kinds of activities.