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Credit Card and Order Fraud

 

“Wow, I just got an order for $275!"  It is going to Taiwan, and the credit card authorized.  The shipping and mailing addresses don’t match, but it is too large an order to ignore, I need the money.” Or, they want the order to be picked up by a shipping agent! Or they want to send me a money order!

 

“I just received an order for 50 yards of material going to Nigeria!”

 

A large majority of the stores hosted by Key to the Web, LLC, are quilt shops.  Quilters are generally pretty trustworthy, but beware, just because someone is ordering from your shop does not mean they are a quilter!  There are a lot of crooks out there trying to find suckers to provide them with products (by stealing)  that they can resell and make money, so you need to take precautions to protect yourself from loss.

 

The staff at Key to the Web is providing the following information and guidelines to help protect you from losing money to fraud.

 

This spring when Bob and Turtle went to Quilt market they visited a lot of quilt shops, and one thing that became very apparent is that more and more quilt shops are having a big problem with shoplifters and quite a few even have those monitors at doorways and put special tags on their merchandise to keep it from disappearing out the door.  As Bob talked to some of the shop owners, he found that it was not quilters that were the problem, but people coming in off the street looking for something easy to steal.  An on line store is no different, there are going to be attempts to steal from your store, usually by using a stolen credit card.

 

The first myth to dispel is that getting an authorization number protects you from fraud.  In virtually all cases it does not protect you at all.  If you get a card declined, then it has saved you, but an authorization number still leaves you vunerable.  If you read the fine print on your agreements with the card companies, you will generally find that they have themselves well protected from any losses.

 

Stolen credit card numbers may get authorized up until the time the owner discovers that someone is using the card, which can often be on their next bill, so there could be a month delay between the time someone starts using a stolen credit card number and the time authorizations start getting declined.  The credit card company is not going to eat those charges -- they are going to be charge backs to your credit card account, and end up costing you not only the cost of the entire order, but also a charge back fee of $20 or more!

 

Banks have a dollar amount, often $300, that causes a flag to be raised on a credit card charge.  The users of stolen credit cards know these flag levels for different cards, and will make their orders somewhere close to the limit without going over.

 

Here are some things to watch for on your orders..  Keep in mind that these flags may not necessarily mean a bad order – you need to determine if the order is good or bad using other means.

 

  1. Foreign orders, especially to Southeast Asia (like Taiwan, Indonesia, etc.)., Africa (Nigeria)
  2. Orders where shipping and billing addresses are different
  3. Orders going to a post office box, especially foreign
  4. Orders greater than $200 but less than $300, especially if 1 and 2 above are true
  5. Orders for larger quantities of a number of  items, such as a 10 yards of a material, especially if any of 1, 2, or 3 apply.  It is much easier for them to sell larger quantities than small cuts.
  6. Name on the credit card does not match the person ordering.  The exceptions here would be using the spouse’s credit card, which is usually pretty obvious.
  7. Orders sent to or picked up by a shipping agent.
  8. Any order where they want to send you a money order.

 

On the other hand, orders that are usually pretty safe are (assuming that the order does not meet any of the above criteria)

 

  1. Domestic orders where billing and shipping  are the same.
  2. Orders where the quantity of each item is relatively small (several yards or less). 
  3. Orders less than $100.

 

Please keep in mind that none of these guidelines completely protect you.  When an order is shipped, it is possible that the customer can claim that it was never received and charge it back.  If there is ever any doubt, insure the package and make sure that a signature is required for delivery, or that you get a notification of delivery for your own protection.  Theft of packages is really bad going to some countries, so any high value orders going to a foreign country should be insured.  If you cannot get insurance on packages going to a particular country, it could be a very risky shipment for you.

 

Money orders and cashiers checks, especially for foreign orders, may also be risky, as they could be stolen or forged, and may not be detected until after you ship.

 

So what are you to do?  We recommend that you ask for an international money order and then WAIT for the money order to clear BEFORE shipping.  In 99 cases out of 100, you will never hear from the party again when asking for the international money order.

 

In virtually all cases of fraud, you are the one that loses, not the banks or credit card companies, so you need to take every precaution.