How to Guard Against Credit Card Fraud on Your Website

Identity theft is not just a problem for the consumer; it is just as much of an issue for businesses that accept credit cards. Since it is much easier to commit credit card fraud on the Internet than in a brick-and-mortar store, e-commerce sites have to be particularly careful about how they do business. Following are several tips on how to guard against credit card fraud on your website.

Credit Card Fraud Tip #1: Require the Verification Number

By now, you've probably made at least one Internet purchase during which you were asked for the three- or four-digit number on the back of your Visa or MasterCard. This is what is known as the CVV (card verification value), and is meant to protect against Internet credit card fraud. If you offer products for sale on your website, requiring the verification number will help to control the theft of card numbers.

Credit Card Fraud Tip #2: Contact Customers if You Are Suspicious

There is no law that says a website purchase has to remain over the Internet. Hopefully, you have collected the customer's contact information through your website (name, address, phone number, etc.), so you can call that customer and verify the transaction. If you receive a number that is disconnected or if the person who answers doesn't know what you are talking about, you should cancel the transaction immediately.

Credit Card Fraud Tip #3: Pay Attention to Conflicting Addresses

When you sell merchandise on your website, you should be requesting both a billing and a shipping address. If the two are different, it should send up a red flag. Obviously, many of these instances will be completely legitimate; if the customer has recently moved or if he wants the product shipped to another location, the addresses will be different. However, if you have a billing address in California and a shipping address in New Jersey, you might want to go the extra mile to verify.

Credit Card Fraud Tip #4: Use an AVS System