3 Ways To Prevent Credit Card Fraud

Posted In: Preventing Fraud

Credit card fraud is an epidemic across the country, with thousands of fraudulent transactions happening everyday. As a small business owner, there’s nothing you dread more than receiving a long list of chargebacks at the end of the month.

Although the recent shift in credit card technology to EMV is a measure to safeguard against credit card fraud, it also shifts liability to the merchant. If you’re not EMV compliant, a fraudulent transaction could be your responsibility to pay.

However, being EMV compliant doesn’t make you impenetrable to credit card fraud. Since the EMV shift is not mandatory, there will still be many customers using magnetic strip cards. To prevent credit card fraud and lost revenue for your business, you need to take preventative actions.

3 ways your business can help prevent credit card fraud:

Do a Quick Scan

When a customer presents you with their card, do a quick scan of the actual card to see if you notice anything suspicious. Ask yourself some questions, like:

  • Are the numbers and name printed symmetrical?
  • Do the numbers match up with the issuer? (Example: all Visa cards start with the number 4, Mastercard with the number 5, and Discover cards start with a 6)
  • Does the name on the customer’s ID match the name on the card?

One of the most-telling signs of a fraudulent credit card is a damaged magnetic strip. In an attempt to demagnetize the card, the criminal forces the employee to manually enter information. Make sure the card is signed, and also see if the signature strip is made from a different material than the card. Additionally, all credit cards should have designated hologram and UV logos specific to the cardholder

Educate Your Employees

Your employees are your frontline in protecting your business from credit card fraud. By providing them with consistent education, you empower them with the tools necessary to spot a fraudulent credit card.

Educate them on the small differences between American Express, Visa, Mastercard and Discover cards. Some obvious places to start:

  • Visa accounts are either 13 or 16 digits long


  • Mastercard and Discover accounts contain 16 digits


  • American Express accounts have 15 digits

Make sure employees check that the card is signed, and if needed, verify with a driver’s license. Compare signatures on the card and POS terminal or receipt. If something doesn’t feel right, encourage them to call the card issuer to double- heck. Staff your business with trustworthy people who will help you reduce credit card fraud.

Look For Suspicious Behavior

An easy way to help curb credit card fraud is by simply observing the customer.

  • Are they exhibiting signs of nervousness?
  • Are they trying to distract your attention away from the card?

Suspicious behavior can also include abnormally large transactions, the customer not having the card on them, and their refusal to provide identification. If you ever feel uncomfortable, be sure to contact law enforcement immediately.

While the shift to EMV will undoubtedly help prevent credit card fraud, it won’t eliminate it completely. A merchant should take a proactive approach to credit card fraud by learning how to spot fake cards, educating their employees, and looking for suspicious behavior. Stop it before it happens.



simplify payment processing