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Taking A Transaction
When a card is present, simply follow these steps to ensure that all of your transactions proceed smoothly:
Check the card's security features
Including the signature panel - to see if the card has been altered. See below.
Attempt to swipe every card through your point of sale terminal.
Always run cards through your point-of-sale terminal. If the card cannot be read, obtain a manual imprint of the card. See tips for key-entered transactions below.
Authorization Response
Be sure the transaction was approved. If the card was declined, asked for another form of payment. You should follow the directions for any additional responses, such as Call Center, Pick Up Card or No Match.
Obtain the customer's signature
Match the signature on the receipt to the signature on the back of the card.
If the customer's card is unsigned, request another form of identification with a photo and signature. Request that the customer sign their card and then compare the signatures. If the customer refuses to sign, inform them you are unable to accept an unsigned card for payment and request another form of payment.
Hold the card until the transaction is complete
This enables you to complete all of the security checks without having to ask the customer for the card back for a signature comparison or possible "call center" procedure.
Compare Information
Compare the name, account number and signature on the card to those printed on the receipt. The information should match.Also, the embossed number on the card should match the four digits displayed on the terminal.
Use Proper Disclosure on transaction receipts
Retail drafts must show all policies including final sales, customer orders, restocking fees, returns and be signed by the cardholder to be considered valid
Key-Entered Transactions
Key-entered transactions carry additional fraud risk as the contents of the magnetic stripe are not obtained. These transactions are also generally cost more than a swiped transaction. When key-entering a transaction follow these additional steps:
- Take a manual imprint of the card, check the draft for a clear impression
- Match the embossed card account number on the front to the number indented on the back of the card.
- Your terminal may prompt you to complete an Address Verification, if so, be sure to complete the proper steps.
- Complete the transaction by manually adding the date, description of merchandise/service, sales tax, total dollar amount, authorization number and signature.
- Have the customer sign the card and compare signatures. Do not accept an unsigned card.
Card Security Features
Visa and MasterCard are updating the look and layout of their cards. Until the roll-out is complete, you will see both the current version of the cards and the new versions.
Check the hologram - A hologram is a three-dimensional symbol that helps deter counterfeiting. The image should reflect light and appear to move when you tilt the card. It may be located on the front or back of the card or on the signature panel.
Check the expiration date on the card - The card is valid through the last date of the month. Do not accept an expired card.
Check the valid date - Some cards will have this feature, where the card is not valid until the date shown. Do not accept an invalid card.
Check the first four digits - For Visa and MasterCard cards, the first four digits of the embossed card number must match the four digits pre-printed above or below that number and on the back of the card. Visa cards begin with a 4. MasterCards typically begin with a 5.
Embossing - the embossing should be clear and uniform in size and should match the indentation on the back of the card.
Signature Panel - the words void will appear if the signature panel has been tampered with.
The Magnetic Stripe – should be smooth and straight.
Settling Transactions
Be sure that batches are submitted daily. Your terminal may be set up to automatically transmit at a scheduled time.
Potential Signs of Fraud:
Some potential signs that a card-present transaction may be fraudulent are:
- Large purchases at opening or closing time.
- Attempting to rush the sale or create a distraction.
- Purchase of several items without checking size, color or price.
- Purchasing large items without asking any questions.
- Purchasing big ticket, easy re-sale items, leaving & then returning to purchase more.
Do not accept a card if:
- The hologram is missing or of poor quality.
- The customer's signature does not match the one on the card.
- The card is warped or has a dull finish.
- The account number and cardholder name are ironed out and the card is embossed with a different number. Evidence of this alteration is noticeable on the back of the card.
- The account number is tilted or slanted, or the embossed data spacing is off.
- The printed information is on top of the laminated surface of the card.
- The printing on the back of the card is blurry or distorted.
- Information displayed on the terminal or electronic printer receipt does not match the account number embossed on the front of the card.
Please contact First National for more information on suspicious behavior at 800-228-2443.
Data Security Best Practices:
- Visa prohibits merchants or their agents from the storing the full contents of any track on the magnetic stripe, or from storing the CVV2 data, after a response to an authorization request has been received.
- Receipts should only print the last four digits of a card number.
- In accordance with CISP, the following individual elements of the track data may be stored account number, cardholder name and expiration date. Learn more information about data security standards.
Mail/telephone order and e-commerce transactions represent the greatest exposure to disputes, chargebacks and fraud because neither the card nor the customer is physically present.
Follow these guidelines to help you reduce your exposure:
Taking an Order
Authorize every sale on the order date
Authorizations are valid for a specific number of days: Visa - up to 7 days, MasterCard - up to 30 days. Merchandise must be shipped and sales must be deposited within these timeframes or the authorization will expire. If your shipping date exceeds these timeframes, obtain a new authorization code before shipping the merchandise.
Record the card account number on the sales draft
Remember: A Visa card number begins with a "4" and has 13 or 16 digits. A MasterCard card number begins with a "5" and has 16 digits. Diners Cards starting with a "36" and having the MC brand mark on the back must be accepted by any merchant accepting MasterCard. These transactions will be processed as a MasterCard.
Truncate Account Number on customer copy of Sales Draft
A non face to face merchant should never send a sales draft via mail or email with the entire card number present. Transaction receipts should only display the last 4 digits of the card number.
Ask for both a billing and shipping address
If the addresses are different, determine whether the difference seems reasonable.
Ask for the customer's phone number
Not as a condition for accepting the sale, but as a customer service tool. The phone number enables you to call the customer for various reasons: to inform him or her that merchandise is back ordered, to request another form of payment if the authorization is declined, or to verify information if the caller seems unclear about address details.
Use the Address Verification Service (AVS)
AVS is a simple check that compares the address information provided by the customer during the order process to the statement billing address of the cardholder. If the customer can not at least identify the zip code the transaction should be further analyzed. While this is not a guarantee against chargebacks, it allows you to make more informed decisions before shipping. Contact the First National Risk Department at 1-800-228-2443, extension 6767, for more information on utilizing AVS.
Verify the CVV2
This Card Verification Value is a 3-4 digit number and may also be referred to as CID or CVC2 depending on the card type. It is printed on the card and can be verified with the Issuer during authorization. Note: The CVV2 number should never be recorded or stored after the authorization is received.
Do not deposit sales until the ship date
Visa and MasterCard regulations do not permit merchants to receive payment for sales until the goods or services are delivered to the customer. Obtain an authorization on the order date, but do not deposit the sale until the ship date.
Visa transactions for custom-ordered merchandise may be deposited on or after the order date - if the merchant has informed the customer that he will be billed prior to shipping.
Mail an order confirmation notice to the cardholder prior to shipping
This will not prevent chargebacks, but may reduce the number of inquiries and ticket requests.
Request that your customer service number appear on the customer's credit card statement
Both Visa and MasterCard regulations permit mail and telephone order merchants to place their customer service telephone number where the merchant city would normally appear. This may help the customer recognize the charge when it appears on the statement and reduce the number of ticket requests and disputes. Contact your customer service representative to discuss this option.
Examine Expiration Date
Always verify the card has not yet expired. An expired card could impact payment even if settled with a valid authorization.
Settling Your Transactions
Settle your batches daily
Transactions not settled in a timely manner can result in higher processing costs.
Do not use an authorization code more than once
If part of an order is shipped and settled the remaining amount should be reauthorized before it is billed to the cardholder. If a new authorization is not obtained for the remaining amount, it will result in higher processing costs.
Fraud Detection
Help detect fraud in card-not-present transactions by always being aware of the following:
A hesitant caller
A shaky voice or delayed responses to questions may indicate that the caller is not comfortable with the information he is providing.
Rush orders
These are a favorite weapon of the "here today/gone tomorrow" schemes.
P.O. boxes and mail receiving services
This may indicate lack of a permanent address.
Above-average transaction orders or amounts
Merchants often know the amount of an average sale. Be wary of those transactions that greatly exceed the norm.
Purchases that can be easily converted to cash
Examples include electronics, jewelry and leather goods.
1-800 return phone numbers
Be suspicious of toll-free telephone numbers when given as the day or evening phone number. Attempt to get a direct line instead.
Multiple orders in a short period of time
Many merchant systems show all orders placed to a certain account or unique customer number. Be especially aware of multiple orders.
Fourth quarter
Fraud is always a consideration, but is particularly widespread around the holidays.
Orders made up of "big ticket" items
These items have maximum resale value and therefore maximum profit potential.
Orders containing several of the same item
Criminals usually select the items with the most resale value. As these items are intended for resale, having more of them increases the criminal's profits.
Orders shipped "rush" or "overnight"
Criminals want these items in their hands as soon as possible for the quickest possible resale, and are not concerned about the extra delivery charges.
Orders from internet addresses offering free e-mail services
For these services, there is no billing relationship and often no verification that a legitimate cardholder has opened the account.
Orders shipped to an international address
A significant number of fraudulent transactions are shipped to fictitious cardholders outside of the U.S. Fraud tools, such as the Visa Address Verification Service (AVS), cannot validate addresses outside the U.S.
Orders shipped to a single address, but made on multiple cards
This may indicate multiple stolen cards.
Multiple transactions on one card over a very short period of time
This could be an attempt to "run" a card until the account is closed.
Multiple transactions on one card or similar cards with a single billing address, but multiple shipping addresses
This could represent organized activity, rather than one individual at work.
Multiple cards used from a single IP (Internet Protocol) address
More than one or two cards would indicate a fraud scheme to test the current status of their list of stolen card information. If the transaction is approved the thieves know the card number has not been closed or reported lost or stolen.
Use Verified by Visa and MC Secure Code for e-commerce transactions
Merchants that participate in these programs receive an electronic signature much like a signature received in a face-to-face environment. In this case it is a password set up between the cardholder and their issuing bank. This password is entered after the shopping cart is submitted for purchase. It validates the identity of the shopper and offers the merchant the opportunity to receive better chargeback protection and possibly qualify for reduced processing fees.
How to Safely and Profitably Accept Checks
How can you protect yourself when accepting checks? Easy! Follow these steps whenever you accept a check:
Check Your Business
Make sure your employees know what identification to accept and what information to gather. Provide step-by-step procedures for checks that appear questionable.
Check the Check
- Does it have the standard check weight and texture? If not, contact the issuing bank to verify that the check is drawn on a valid account.
- Verify that the check contains a valid date, matching written and numerical dollar amounts, the name of the bank the check is drawn on and the account holder's signature. If any of these are missing, the check can be considered "non-negotiable," and the bank can refuse you payment.
- Pay special attention to checks with low numbers (between 100 and 500). While this does not necessarily indicate fraud, it does usually mean the account has been opened very recently; you may want to contact the drawee bank to verify that the check is valid.
- Always be extra cautious with out-of-state checks, and never accept second- or third-party checks.
Whenever a check seems questionable, contact the drawee bank to verify that the check and account are valid, and that the funds are available.
Note: verifying that funds are available at the time of your call does NOT guarantee you payment. It only serves as a means to help you determine whether or not you should accept the check.
Check the ID
- Watch the check-writer sign the check. Compare the signature to a valid photo ID (usually a driver's license). If the signature on the check varies from the signature on their identification, ask for a second piece of ID (this could be a credit card, or even a social security card).
- Verify that the photo and physical description on the identification match that of the check writer.
- Check the identification to make sure it is not tampered with or expired. Know the security features of the State IDs and Driver's Licenses in your area, and always look for these features when accepting them.
Accept the Check
You can usually accept a check with confidence, knowing that the majority of returned checks are honest mistakes. But if you follow the steps above, the chance of a returned check is even smaller.
Your customers are happy because they get their checks approved quickly and easily. And you gain repeat business from those satisfied customers.
Please contact a First National representative at 800-354-3988 for more details on which check service can best meet your business needs.
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