Credit Card Processing  Promote Your Business
Credit Card Processing
ProMatch
Directory
Cost Report
  More Services

Accept Credit Cards? How to Avoid Refund Fraud






When I say "credit card fraud" you think about stolen card numbers and identity theft. There's another kind of fraud, and if you accept credit cards you need to be highly aware of it. Here's how it works:

You get a call from someone with a common name. Think John Smith, Jenny Jones or Hector Sanchez. The caller claims that his bank asked him to call your law firm to get a check refund for a debit card transaction dated the "15th".

Sounds legit. Except the caller never bought anything from you. If you issue the refund, you can bet that if you cut a check, you'll never get your money back. Seems obvious? It's not, and incidents of "refund fraud" are rapidly increasing for service businesses like law firms who are often easy marks for scammers because either they are new to taking credit cards or simply aren't used to dealing with fraudsters.

Fortunately stopping refund fraud is easy. By following a few very simple rules you can save your firm thousands in lost money and time:

1. Only give card payment refunds by crediting the customer's credit card. Never issue a check or hand out cash for any credit card transaction, even if you know the refund actually is legitimate. This prevents the customer from being able to charge back the credit card transaction after they've been given a refund by check. Limiting card refunds to the card used to pay prevents fraudulent refund demands cold: a scammer will quickly give up when they realize that you are not going to give them money back in a form that they can use.

2. Always check your sales history to ensure the person claiming to be your customer is actually is your customer, and has actually paid you before issuing a refund. Invoices and receipts are easily doctored with modern photo editing software, making it easy for scammers to present what looks like legitimate paperwork.

3. The California Attorney General's office suggests checking an ID before issuing a refund. Checking an ID is a very good way to ensure that your customer's credit card is controlled by someone who has stolen your customer's identity.

4. If all else fails, and the alleged customer is insistent about the refund, suggest that he or she take it up with whoever issued the credit or debit card. If there is a legitimate charge, you will get a chargeback notice. If not, you'll never hear from the fraudster again.

Mike Seidle is the Chief Technology Officer for VPS, a firm that specializes in credit card processing for law firms and other professional service companies.



Be the first to find this article helpful.

About the Author

Mike Seidle, Virtual Payment Systems, Inc
5348 North Tacoma
Indianapolis, IN 46220
866-637-6125

Contact Author: request info

If you would like to re-print this article, please contact the author.
Need to find a credit card processor? Free quotes from credit card processing services.
Find Credit Card Processors

Related Topics

Credit Card Processing
Learn About the Different Methods of Card Processing
From outsized credit card terminals to portable mobile devices, payment through credit...

Tips on Preventing "Card Not Present"" Payment Frauds
This article throws light on useful tips to prevent fraud when neither the card nor the...

Vantiv Named by Forbes as One of the Fastest Growing Tech Companies
New release announcing Vantiv, Inc. being named one of America's Fastest Growing Tech...

What to Expect when Applying for a Merchant Account
Many processors operate with the expectation that you know the process and don't take...

Future Proof Credit Card Machine
The Vx520 (dual comm) is a future ready terminal (EMV and NFC READY) with many new...

Need to find a credit card processor? Free quotes from credit card processing services.

Other Related Topics

New Credit Card Surcharge Rules
A court settlement will affect surcharges for credit card transactions beginning January...

Merchant Accounts for Small Businesses
Merchant accounts for small businesses come in a variety of types, depending on your...

Top 10 Reasons to accept Credit Cards
Dont cut your self out of the pie. Impulse Spending! Customers spend more impulsively...

Are credit card processing fees too high?
One cost factor that retailers of all types deal with are credit card processing fees,...

I'm Not One Of Those Guys
I am always hearing (your one of those guys) when I talk with a merchant. It's sad that...

Editorial Disclaimer: The views expressed in articles published on this website are those of the authors alone. They do not represent the views or opinions of this website or its staff. The articles on this site do not constitute a recommendation or endorsement with respect to any views, company, or product. Authors affirm that article submissions are their original content or that they have permission to reproduce.

Free Cost Estimates   |   Credit Card Processing Companies Directory   |   Credit Card Processing Cost Report   |   Free Business Listing



Home   |   Articles & Videos   |   Affiliates   |   Networking Groups   |   Search by Category   |   Professionals

Terms of Use   |   Privacy   |   About Us   |   Contact Us   |   Member Login

©2003-2018 - VentureStreet, LLC

Join Our Business Network