Jewelers – Fraud

Preventing In-Store Credit Card Fraud

It’s happened to jewelry stores from New York to California. A “customer” shops for a high-value item, finally makes a selection and hands the jeweler a credit card for payment. Nothing unusual, except that the credit card is stolen. The professional thief even has a fake driver’s license that matches the credit card information. In many instances, the card owner isn’t even aware that the card is missing.

What’s a Jeweler to do?

If you haven’t already purchased a new EMV chip credit card machine, now might be a good time. Effective October 2015, you and your processing company will be liable for counterfeit smart card transactions. EMV stands for “Europay, MasterCard and Visa,” with the goal of creating world-wide standardized protocols for “integrated circuit” cards and the hardware necessary to accept these cards.

The new cards look like the old magnetic strip cards with one exception: they have a small square metallic chip on the front. The chip holds payment data — some of which is currently held on the magnetic stripe on old cards — and provides a unique code for each purchase. The metallic chip is designed to reduce fraud, including counterfeiting.

Here are other steps:

  • Review your contracts with credit card processors/ issuers regarding fraudulent use of cards and identity theft. If the card processor can charge back a fraudulent purchase, you may be on the hook for the sale.
  • Inform staff of this current ID/credit card fraud situation and review your procedures for accepting payment, especially for high-value items. Remember, you are doing your customers a service by assuring that credit card charges are legitimate.
  • Check the credit card security features. Use a black light to view the images encoded on major cards (MasterCard, Visa, American Express, and Discover).
  • Verify that the name, address and signature on the card match the individual’s photo ID. Look at the photo to assure that it matches your customer.
  • Swipe the card and check the authorization response. Assure that the embossed account number on the front of the card matches the account number displayed on the POS
  • Trust your instincts. If you feel something isn’t right, call the credit card Voice Authorization Center and inform the operator of a Code 10 Authorization Request. The call will first be received by your merchant bank, which may ask for merchant and/or transaction details. The call will then be transferred to the card issuer; a special operator will ask yes/no If possible, hold onto the card during this phone call. The operator may authorize the charge, deny the charge, or ask to speak to the cardholder to determine if he/she is the true card owner.
  • Report credit card fraud and ID theft to your bank or payment processor, your local police or U.S. Secret Service office, and your insurer or insurance broker.

 

Be proactive! Develop a plan and execute!

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