March 1, 2023
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As a jewelry store owner, protecting your business from fraudulent transactions is a key part of maintaining the trust of your customers and ensuring the security of your business. With a sharp rise in online fraud and identity theft, it is important for jewelers to take the necessary steps to guard against a loss caused by a fraudulent transaction.

Fighting fraud starts before the transaction ever begins. Chosen Payments offers some great tips to protect your jewelry store against fraudulent transactions before, during and after the sale.

Before the Sale

You may wonder what you can do before a fraudulent transaction happens. Choosing a Merchant Services Provider that knows and serves your industry can help. Chosen Payments understands the industry and sees fraudulent trends happening in various areas of the country that allow us to share the fraud scheme with our merchants before they become a victim.
  • Engage a trustworthy Merchant Services Provider with a solid reputation in the industry.
  • Use a processor who builds true relationships with clients and understands jewelers.
  • Make sure technical support is available 24/7.
  • Make sure you are PCI Compliant at all times.
Employee Training
By training your employees to recognize suspicious orders and customer behavior, you can take action before you sustain a loss. Detecting a fraudulent order is winning the battle.

During the Sale – Fight Fraud by Listening

Our ears are by far the best tool available for spotting fraudsters. If we know what to listen for, fraudsters generally provide many tips during the buying or transaction process.  Avoid becoming a victim of credit card fraud by being alert and listening for indications of fraud. Here are common indicators of a potentially fraudulent sale:

Suspicious Phony Name
Always be suspicious of names like John Smith, Bob Brown, Susan Jones. Just because they have a common name doesn’t always mean it’s a fraudulent sale, but it should get your fraud senses on high alert. Verify all customer information before you accept a payment. Complete a Sales Order that includes your customer’s name, address, and phone number. Make sure the information matches the credit card they’re using. If anything looks suspicious, don’t hesitate to contact the card issuer for further verification (Learn how below).

Use a Chip Reader Terminal
Using a chip-reader terminal is an important step in avoiding the acceptance of fake credit cards. Duplicated credit cards are easily manufactured using embossing products and magnetic stripe programmers widely available online. EMV or "chip" cards are embedded with a microchip used to authenticate credit and debit card transactions. Fraudsters can’t use a fraudulent card in a chip-reader terminal. While Merchant's can swipe a chipped card, you should never use the magnetic stripe on a chip card.

Wrong or Missing Security Code
If your client doesn’t know the 3 or 4 digit security code on their credit card, this means the card is not in their possession. This should be a MAJOR red flag. The security code is specifically intended to prevent fraud. Use it!

Use the AVS Verification
Always use the Address Verification System for every transaction. If the address numbers don’t match the exact address on the billing statement, the AVS will display a “mismatch”. Always enter the zip code as well. If one or both parts of the AVS system are mismatched, proceed with caution.

Abnormal Orders & Gut Feelings
Not every abnormal order is fraud. However, when you have a very young customer buying a $12,000 ring, this should be a red flag. Trust your gut instincts. If it doesn’t feel right, it probably isn’t.

Overly Friendly or Distracting
If someone is overly friendly or seems like they are trying to distract you during the transaction process, it may be a fraudulent transaction. Remain focused but polite and no matter how nice someone seems, always follow the same exact procedures. Do not get caught up in the game.

Add-On Sales
If a customer is insistent that you run a credit card during a phone transaction, this is another major red flag. They want to see if the card is going to go through. If it does, they are likely to purchase more jewelry from you knowing that the stolen credit card they just used was a valid card. Thieves always get greedy and most normal people don’t even discuss when you will charge the card.

Other Protection Steps
The most important step you can take to protect yourself is to obtain a signature on the Sales Order form. Have the client sign a Credit Card Authorization Form if you are doing a telephone or mail-order transaction. The signature can be compared by the issuing bank before the customer takes possession of a piece of jewelry. A signature is also an acknowledgement of the transaction and usable in court if needed. If you have any doubt, call your Merchant Hotline, and tell them that you have a CODE 10 Sale. That’s a suspicious order. This will cause the bank that issued the credit card to call the cardholder to verify it is the cardholder making the purchase.

Ask for ID
For all large purchases or first-time customer transactions, don't hesitate to ask to see the customer's ID and match the name to the physical credit card presented. You've likely had to present your ID hundreds of times yourself and likely appreciated the effort to minimize fraud. If your customer cannot provide a matching ID, ask for a different form of payment.

After the Sale

If despite your best efforts, a fraudulent charge results in a chargeback, all is not lost. Have your refund policy in written form. Make sure it’s on your website, sales orders, and in-store signage. Contact the customer to confirm any potential misunderstandings. Respond quickly to Retrieval Requests sent to you asking for additional information. Provide your credit card processor with copies of everything you think is relevant to the transaction and ask for assistance in preparing your chargeback response if you need help.

Chosen Payments -- a registered agent under Aurora Payments -- is a partner of Jewelers of America. Get started with Chosen Payments today to save up to 25% on processing fees and make payment options simple.

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