Protect yourself at all times… Beware of overnight shipping requests. Every retailer I spoke with overnighted the merchandise because the customer said he needed it the next day. Don’t take shortcuts on your verifications. Be suspicious of phone orders being shipped to alternate street addresses. Again, take ample time to verify both addresses. Be on your guard in the case of quick repeat business. Most of the retailer victims I spoke with shipped multiple fraudulent orders to the same person (or an associate of that person) within a short period of time. Take extra precautions to verify subsequent transactions. Crooks aren’t nice guys, but they sure can act like it. Don’t let a seemingly nice demeanor distract you from properly verifying a transaction. Several of the retailers I spoke with said they developed a rapport with the crook during their interaction. Customer service representatives can tell you if the cardholder information matches the information you have. But they cannot tell you with certainty if an order is legitimate. Make your decisions based on your own diligence rather than on what someone at the issuing bank told you. Remember, you are 100% liable for the transaction. Order size is relative. One of the retailers I spoke with didn’t consider a $9,000 order a large purchase, so she wasn’t suspicious. But the JSA recently issued a warning about phone scammers making $1,500 purchases. Take extra precautions with all phone orders, especially those $1,000 or more. Always send high dollar packages signature required so you have proof the package was delivered and received by a person. Don’t question your intuition. If the transaction doesn’t feel right, don’t ship the product. One woman admitted she didn’t want to let go of the package as she handed it over to the UPS driver…it cost her $20,000.

Having written several articles on credit card fraud, I often receive calls from merchants sharing stories and asking for advice. Over the past few months, I’ve heard from several retailers who have fallen victim to phone order scammers to the tune of tens of thousands of dollars each.

As the short story goes, a group of crooks are calling unsuspecting cardholders notifying them their credit card account has been compromised. Believing the call is legitimate the cardholder gives the caller all his personal information in an effort to verify the account. The crooks then use this information to access the account and place fraudulent purchases.

If you accept credit card payments for phone orders in your retail store, take extra steps to verify the legitimacy of purchases. While I can’t guarantee these efforts will prevent fraud, they will help you make a decision whether to ship the merchandise or not.

Know that simply receiving an authorization code isn’t a guarantee an order is legitimate. Rather, it simply indicates the availability of funds in the account. It is crucial to speak to a representative at the issuing bank to carefully verify the cardholder’s information before shipping merchandise.

Start with verifying the primary cardholder’s name. There may be multiple names attached to an account, so ask for the primary cardholder’s name. Next, verify the primary address. There may also be a secondary ship-to address attached to account. If you have an alternate address, check if it is listed as the secondary ship-to address. Finally, verify the customer’s primary phone number. This is an extremely valuable piece of information often overlooked by retailers. Verify all the phone numbers you have in case they are listed on the account.

If the customer’s name, address or phone number does not match the primary cardholder’s information on the account, ask the customer for the correct information and re-verify with the issuing bank. Take good notes during the verification process.

If you are lucky enough to obtain the correct primary cardholder name, address AND phone number, you’re off to a good start. I recommend calling that phone number to speak with the primary cardholder to verify the purchase. If you are shipping to the primary cardholder at the primary cardholder’s address AND the purchase is relatively small, then you may choose to ship the product at this point…it’s up to you.

If the purchase is large, difficult to verify, shipping to an alternate address or if you still feel uneasy about the transaction, do a little more detective work. Compare the cardholder information you received with the information on whitepages.com. Perform a Reverse Lookup on the phone number and address to see if the information is consistent with what you have. Generally, the information on whitepages.com is older, so it is a good source to check in case an account has been recently compromised.

When doing a Reverse Lookup on the address, double check the name and phone number associated with that address. If the name matches but the phone number is different, consider making a call to that number to speak with the cardholder. When doing a Reverse Lookup on the phone number, double check the name and address associated with the phone number. If a different name and/or address is associated with that phone number, do further verification. Always print out and keep the pages from your whitepages.com search for reference.

For large or suspicious orders, consider requesting a legible scan or fax of both sides of the credit card and a photo ID along with a signed copy of the purchase order. This usually confirms the customer has possession of the credit card. It also allows you to compare signatures. Explain to the customer that you’re not asking for anything more than what you could see if he were standing in your store. If it makes the customer feel better, tell him to cover up the security code on the back of the credit card. Most customers understand your need to take extra precautions with larger phone orders. But if someone gets overly defensive, consider declining the sale or ask for a bank wire transfer instead.

Just remember, if you accept credit card payments for telephone orders, you are 100% liable for the sale if it turns out to be fraudulent. While most phone orders are legitimate, taking extra time and effort to verify now can save you thousands of dollars in chargebacks later. Plus, you just might uncover a crook in your efforts.

To read other articles written by Michelle Rahm or to learn how to feature this article on your website, please visit http://www.jewelryimpressions.com/articles.html

Michelle Rahm of JewelryImpressions.com is a recognized expert in online fraud prevention. Rahm has spoken to a number of groups, written articles and been an interview subject for a number of leading trade, Internet and media outlets. Contact her at (970) 535-4139.

Contact Michelle at 970-535-4139 to speak at your next event.