Credit Card Scams Consumers Try Against Merchants

Ginger HollowellScams Against MerchantsLeave a Comment

Here are a couple scenarios merchants should be aware of:

  1. Merchandise Return Scams Against Merchants

There are criminals out there who have stolen goods from retails stores. They steal the clothes, leave the tags on and then go to the store to return the items. Make sure you ask for a copy of a receipt to avoid fraudulent returns. Otherwise, you may be returning cash or loading value onto a gift card for something that was previously stolen from your store, or from another franchise owner’s store.

  1. Declined Cards

What is happening when a customer comes into your store to purchase products, they approach the counter with a credit card presented for paying, and the card is declined? The customer almost always says, “I have plenty of credit on my card and there must be something wrong with your system.” This is hogwash. When a card is declined at your point of sale, it means the card DOES NOT have enough credit for the purchase. Ask them for another card or turn down the purchase.

When a card is declined online, some customer’s call the establishment to tell them their payment system is not working. Yes, it is working. Credit card processing does not intermittently decline cards for no reason. Either the card is no good or the customer entered an address or CV2 number online incorrectly. Ask the customer to re-enter the same card making sure they enter the digits carefully. If it still declines, the card is NO GOOD! Ask them to try a different card.

Some merchants keep trying the declined card and then, all of a sudden, it is accepted. This is risky for the merchant. The credit card processing networks have defaults set after so many tries. A card may go through, but in reality there is not enough credit. The risk to the merchant is that the customer may charge the card back.

Be aware that a declined card may be an alert to you that this may be a setup for a chargeback. Taking payments online has the added risk of chargebacks. Since there is no signature and therefore proof of purchase, it is easier for people to ‘steal’ from online Ecommerce sites. Fraudsters claim they were never shipped the product and hope you, the merchant, does not have a copy of a delivery receipt.  Fraudsters claim it was damaged and they can’t return it to you because they threw it out. In the case of purchasing a service online, fraudsters claim the service was in adequate.  If you are selling a service online, we suggest you have a signed contract from your customers with the explicit terms of the agreement. This contract can act as proof that the customer knew the terms and that the charge is legitimate.

Our customer service department is happy to answer any questions you have regarding unusual situations in accepting credit card payments. Call us at 505-296-2847.