17 Dec What Happens if You Accept Payment from a Stolen Card?
When you set up your business with a merchant account to allow credit cards for payments, you are giving your business the advantage of more potential sales. Unfortunately, allowing credit cards as payment is also putting your business at risk. The main result of processing a stolen credit card will be dealing with a credit card dispute. However, it can also put your credit card processing account in danger and leave you feeling the financial repercussions, as well.
The result of many credit card disputes is a charge back. A charge back to your account means that you are now liable for paying back the amount charged to the owner of the credit card. Along with the transaction amount, you may also have to pay fees to your credit card processing merchant account provider. These fees can quickly add up and decrease your profits.
What happens when your merchant account receives a high number of charge backs? One credit card processing company would increase your fees, as your business could be considered high risk. Another may cancel your merchant account altogether. Regardless, the outcome of incurring an increase of charge backs will not be good.
How can you prevent your business from getting charge backs? First and foremost, your customer service must be your top priority. Should your business receive a phone call from a credit card holder stating they never made the purchase, you must take the call seriously. It is much better to offer a prompt refund than to let the situation escalate into a charge back.
Your business should also make use of several preventative measures to deter credit card fraud. Take all means necessary to minimize the number of charge backs, including address verification, signature comparison, and security code verification. This may not eliminate them entirely, but it will assist you in keeping the number of charge backs down.
Accepting credit cards as payment is an important aspect of business and you must not let the risks associated with it prevent you from growing your business. As long as your business takes customer service seriously and takes preventative steps in credit card fraud, you will find that your merchant account can be one of the most useful tools in your business.