While chip technology provides you with enhanced security, fraud resulting from skimming can still occur. Skimming refers to the fraudulent practice of capturing account information from the magnetic stripe of a debit or credit card in order to make a counterfeit card.
While fraud can occur in different forms, it can be prevented by implementing appropriate best practices.
Point-of-Sale Fraud Prevention Best Practices
Know and educate your Employees
You and your employees are the first line of defense against fraud. Be sure to implement strict hiring procedures to thoroughly screen potential candidates as fraudsters may attempt to join your organization. Fraudsters may also approach your employees to assist them with illegal activity. Train employees how to recognize the signs of possible fraud, and provide them periodic reminders to stay alert to potential threats. In addition, restrict access to your point-of-sale device(s) to authorized employees only.
Avoid manual card entry
Fraudulent cards often cannot be inserted or swiped at a point-of-sale device, so a customer may ask (or an employee may offer) to key in the card number manually. Doing this may bypass the card’s anti-fraud and security features. Always use the point-of-sale device to insert or swipe the card. If the card cannot be read, ask the customer for another form of payment.
Refuse “Letters of authorization”
Fraudsters may present a letter claiming to be from the cardholder, authorizing use of the card by another person. Because only a cardholder — the owner of the card — is authorized to use their credit card, letters of authorization should be declined as a form of verification.
Be aware of customer purchases
Fraudsters have been known to purchase multiples of the same expensive items, often by selecting them quickly, without consideration as to sizes, colours, or price. Another potential sign may be if the customer wants an expensive rush delivery to a new address not connected with their card.
Know and protect your Point-of-Sale device
“Skimming” is the process fraudsters use to access information on the magnetic stripe of a debit or credit card when it is swiped at the point of sale. Usually this requires an attachment to the point-of-sale device to skim the card. To prevent this, ensure you are familiar with your point-of-sale device and its operation. Keep PIN pads out of sight when not in use and inspect and secure standalone point-of-sale devices at the end of your business day. If you suspect your point-of-sale device has been tampered with, please contact RBC Royal Bank and have it inspected before accepting this debit or credit cards.
Keep accurate records of transactions
Some legitimate cardholders make authorized purchases, only to dispute the charges later in an attempt to defraud the business. To help prevent this type of fraud, keep accurate records of your transactions. At a minimum, you will need to keep copies of transaction receipts as evidence you received the authorized approval.
Look out for card security features
Ensure the card presented by the customer bears the standard symbols and marks by carefully reviewing the security features of the card. In the event the card is not working on your electronic terminal by inserting or swiping it, you may choose to enter the transaction manually into the terminal; however, to minimize your risk you must obtain a manual imprint of the card as evidence that it was presented. The imprint needs to be clear and legible on all copies of sales drafts with a record of the date, authorization number, the amount and the customer’s signature. If you are experiencing issues with your point-of-sale device which prevent you from processing your customer’s cards electronically, please contact RBC Royal Bank.
Contact the card issuer
When in doubt, do not hesitate to contact the card issuer. With the card in hand, call the issuing bank using the number listed at the back of the card and ask for an authorization. Contacting the card issuer protects both you as the merchant and the cardholder. However, please note that obtaining the authorization number may only confirm the funds are available on the card — this does not validate the cardholder authorized the transaction or prevent a future chargeback.
To find out more about RBC Merchant Services or any other information not listed here:
Visit your nearest RBC Royal Bank® branch or visit www.rbc.com/caribbean.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.