It is an unfortunate fact that many businesses will come across a customer who presents a card that is not rightfully theirs.
Card Fraud is a reality and is increasing in the retail market environment, exposing you to potential losses that could be damaging to your business.
Please make the time for yourself and your staff to review this Fraud Prevention Guide. The more you know about the potential risks, the more you’ll be able to protect your business against chargebacks and fraud.
At adumo, we have a dedicated team of payment risk analysts who monitor transactions on a daily basis. They make sure that any suspicious transactions are brought to your attention immediately, and that you are always protected. They’ve saved adumo clients 10’s of millions of rands to date in potential losses due to fraud.
Your agreement specifies that you are responsible for preventing fraud occurring via your merchant services, ensuring the physical security of your merchant equipment and the protection of cardholder information.
For this reason it is essential that you understand:
How your business can become a target of fraud
How fraud can be detected
Your liabilities
Precautions you need to take
As a business owner, it is also your responsibility to advise adumo of any significant changes to your business.
This may include, but is not limited to a change:
of the business address
of location of the card machine and modem
in the business name
of the types of goods and services your business provides
Internet and mail order/telephone order transactions are commonly referred to as card not present transactions or MOTO transactions.
adumo does NOT recommend card not present transactions, unless you have specifically signed an agreement in this respect.
Due to the high risk Mastercard and VISA have advised that as from 27 April 2017 – a card imprint will no longer protect merchants against chargebacks. This means that should you be approved to accept manual transactions on your adumo terminal, you as the merchant will be fully liable for any and all manual transactions where disputes are raised by the cardholder.
An authorisation confirms the following information at the time of the transaction:
The card has not been reported as lost or stolen
There are sufficient funds to cover the purchase
An authorisation does not confirm payment or that the person providing the card details, is the genuine cardholder
A risk remains that the purchaser has improperly obtained the card or card details
If a transaction is declined, it is generally for a good reason.
Do not:
Lower the sale amount in an attempt to complete the sale on one card
Split the sale over two or more cards
Split the sale amount into two smaller transactions on the same card
A transaction may be considered invalid and may be charged back if an attempt has been made to split a purchase.
This is often done with foreign cards. Be very vigilant when you get offered a foreign card for payment.
Skimming is an illegal act that helps criminals obtain credit card account information to produce counterfeit cards, using a skimming device like the one shown.
If you see anyone in your workplace using a device that is not part of your day-to-day activity, call your bank.
Avoid processing manual transactions on the card machine, especially where the card is not present on the premises
If the card machine is faulty, request another means of payment.
Process the transaction on the card machine as soon as the problem is resolved.
If you use a manual voucher, all the fields are mandatory for completion
The voucher should also have an imprint of the Card that is being used by the customer for purchasing the goods
Because of the high-risk nature of these transactions, you will also be charged an additional 2.5% for each transaction processed
You, as the business owner may be faced with the prospect of incurring chargebacks, which can have a financial impact on your business.
A chargeback occurs when the cardholder (or their bank) raises a dispute in connection with a card transaction.
If the dispute is resolved in favour of the cardholder, the transaction is ‘charged back’ and debited to your settlement account. In other words, you as the business owner could possibly lose the value of the sale and incur a chargeback fee.
Common reasons for chargebacks, include but are not limited to:
Cardholder does not recognise the transaction (Business name on statement is not recognised)
Cardholder did not authorise the transaction (Frequently an indication of fraud)
Cancelled recurring transaction
Goods/services not as described
Goods/services not received
Goods faulty or defective
No authorisation obtained
Chargebacks, manual and fallback transactions can generally be raised by either the cardholder or their bank up to 120 days to raise a dispute from the transaction date, or from the date the goods or services should have been provided.
For this reason, you are required under your agreement to retain all sales vouchers and information for a minimum of 180 days.
A Fallback transaction is when a chip card is swiped instead of being inserted. This bypasses certain security features put in place to prevent fraud from happening.
This is not allowed and you will be charged an extra 2.5% for each Fallback transaction processed.
Should these type of transactions be disputed, you as the merchant, will be liable for the amounts in question.
While trusting your customers is important, this should not be at the expense of good business sense.
This means ensuring that whenever the card is present that staff undertake additional security measures to ensure the card is not a counterfeit (fake) and that the purchaser is the genuine cardholder.
When a card is presented at the point of sale hold onto it until the transaction has been completed and always check the following on the back and front of the card:
The hologram sticker should appear 3D and change colour when tilted. It shouldn’t be scratched or lifting off
These numbers should be evenly spaced and aligned. A fraudulent card will have defects in the number
The first digit of the account number should match the card it’s on. The following cards should start with: 3 for Amex, 4 for Visa, 5 for Mastercard, 6 for Discovery
The entire or shortened (i.e. first 6 and last 3 digits) card number should match what’s printed on the receipt
The first or last 4 digits of the embossed card number should match the 4 printed numbers directly below it
The magnetic strip should be smooth and free of signs of tampering. A fraudster might damage this on purpose to get you to manually enter fraudulent details
These numbers should match the last 4 digits of the card number on the front of the card. The numbers will always slant to the left
The signature strip should always be on the back of the card. It should be printed with a Mastercard or Visa specific overlay on a white background
The card should be signed, and the signature must match the signature on the receipt
When processing a debit card where the cardholder is required to enter a pin, please ensure that the cardholder signs the credit card slip.
This is required by law, even if the message on the slip reads: No cardholder signature require.
There is certain security information on a chip that the card machine must read in order to validate the transaction. When the card is swiped instead of inserted, not all the data fields get completed and the security measures that have been put in place is bypassed, this is known as a fallback transaction.
If the card is swiped instead if inserted, it may result in a chargeback to the business owner for non-compliance.
A refund may only be processed on the original card that was used to make the purchase.
Please check the merchant copy or the client copy of the slip to ensure the card number is the same.
A refund must not be higher than the original transaction amount.
If the purchase was done with a debit card, refund the client in cash.
Be wary of a customer when:
They seem nervous, anxious or in a hurry at closing time
They make purchases without regard to size, style, colour or price
They buy a large item and take it with them without asking for delivery
They ask to split a transaction over 2 or more cards
They take the card back quickly so you don’t have a chance to check the security features
They ask you to manually input a transaction without having a card present
They look at the card before they sign the receipt
Here are 9 tips to keeping your business safe:
Avoid manual transactions, if it needs to be done, make sure that the correct procedure is followed:
a. obtain an imprint of the card
b. call the adumo Call Centre 086 111 1665 to get approval
c. complete the manual booklet voucher
Follow your gut feeling, if someone looks or acts suspicious, ask them for another form of payment and a copy of their ID
Keep your copies of transaction slips stored in a cool and dry place for easy access if a transaction is questioned
Never split a card purchase over different cards, even if the customer asks
The card number on the front of the card should match the card number on the transaction slip that is printed from your machine
Take time to check the signature on the back of the card and that the card details match, Mr X shouldn’t look like a Mrs Y
You are required to keep your signed manual vouchers for two years, we recommend making a clear photocopy of the voucher and filing it away
If a customer does not remember his/her pin, they should come back when they do
We also recommend that you make clear photocopies of your transaction slips and keep these filed away
Contact Call Centre on 086 111 1665 and tell the call centre agent that you have a code 10.
This means that you are suspicious of the card and/or cardholder.
Decline the transaction or ask for another form of payment.
Contact your local police.
Attempt to retain the card.
