When you're in business, every transaction counts. To protect your company's reputation and profits, you should know how to prevent fraud, including credit card fraud. If you're not well informed, clients or employees could try to get rich at your expense.
Follow these tips to stay one step ahead.
Detecting bad payers
- Make sure the credit card is authentic. Is it issued by a well-known company? Does it have authentication symbols?
- Make sure the expiry date is valid and unaltered.
- If you have any doubts about the cardholder, ask for photo ID. This dissuades fraudsters
For non-chip transactions:
- Compare the client's signature with the one on the card.
- Keep the card throughout the entire transaction. Don't give it back until you have an authorization number.
- Never accept a card that doesn't meet these requirements.
Certain behaviour can be a warning sign. For example, someone who's buying a lot of clothes in different sizes, styles, colours and price ranges may be planning to resell them, and may be using a stolen card.
If the client tries to distract or hurry you during the transaction, be extra careful. Make sure you don't forget any steps in the verification process, including checking the signature if required.
Detecting bad employees
- Check references and criminal records before hiring candidates.
- Keep your clients' credit and debit card information in a secure location and restrict access to employees who need it (for example, your finance department).
- Regularly inspect your PIN keypads and point-of-sale terminals for signs of tampering.
- Keep an up-to-date list of the serial numbers of your devices, and check it periodically against the numbers on the devices you're using.
- Watch surveillance footage regularly to check for fraudulent activity on your devices or during transactions.
- When employees leave the company, immediately remove their access to your computer network and premises.
Are you safe from occupational fraud?
- Theft in small, independent stores amounts to an average of $1,000 a month.
- One in 11 people shoplift according to the American National Association for Shoplifting Prevention.
- Only 30% of shoplifting is premeditated.
- A third of burglaries target stores.
- In 2012, 44,975 counterfeit Canadian bills were in circulation.
- 75% of them were $20 and $10 bills.
- At least 26% of Canadian small and medium enterprises were victims of workplace fraud in 2010.
- The businesses lost a combined total of $3.2 billion.
- For small and medium enterprises, the most common type of fraud is misappropriation of inventory or assets, followed by misappropriation of cash.
- Quebec retailers lose almost $800 million to shoplifting and credit card fraud, or the equivalent of 1.4% of annual retails sales.
Desjardins Insurance prevention fact sheet on Shoplifting.
Conseils aux gens d'affaires, on the Sûreté du Québec website (available in French only).
Currency Counterfeiting Statistics on the RCMP website
Does Canada Have a Problem with Occupational Fraud? on the CGA-Canada website.