How to Fight Fraud at Your Business

  |   Fraud Prevention, Fraud Tools, payment fraud, Sertifi

Have you ever had a “that could never happen to me” moment?  


People never think they’ll be the ones to win the lottery or be struck by lightning. 


Or that they’ll be a victim of fraud. 


But payment fraud doesn’t discriminate, and it’s not isolated to one industry. If your business accepts online payments, chances are, fraud will happen to you.


It’s important to prepare your teams to fight fraud, otherwise, you risk your bottom line, your customers, and your reputation. Fraud prevention demands immediate attention if you wish to mitigate the damage.  


Be sure to check our guide Understanding Payment Fraud and How You Can Mitigate Your Risk, to learn more about payment fraud, and continue reading for five simple strategies to help prevent fraud: 



Always Use Card Security Codes – eCommerce relies heavily on “card not present” (CNP) transactions which are considered high risk since it’s more difficult to verify the cardholder’s identity. To combat this issue, card security codes were developed. Card security codes are one of the most widely used practices in helping to reduce fraud and protecting both you and your customer. CVV and AVS are both common card security codes but differ slightly.


  • CVV – These codes are represented by the three-to-four-digit numbers on the back of a credit or debit card. You’ve probably noticed these but maybe haven’t given much thought to them before. Requiring a customer to enter this number at checkout helps to confirm they are who they say they are and reduces the likelihood of fraud. However, this isn’t a foolproof tool and may not account for friendly fraud, lost or stolen cards, unauthorized card users, or other methods fraudsters use to gain obtain information.


  • AVS – Similarly to CVV, Address Verification Service (AVS) is a way to verify a person’s identity when they are not present at the time of transaction. AVS will compare the billing address used in a credit card transaction against the information the bank has on file. The bank will return a corresponding response code indicating how closely the addresses match. If the addresses don’t match at all, the transaction will likely be declined. However, you’re able to customize your decision whether to complete or decline the card based on the response code and your own set of best practices. 



Invest in a Chargeback Team – If you belong to an industry that frequently deals with chargebacks having people and resources dedicated to disputing illegitimate claims is crucial. 


  • In a chargeback case, the merchant is automatically liable. If they do nothing, it will be decided in favor of the cardholder and result in lost revenue for the merchant. However, every merchant has the right to dispute the claim in what is known as a chargeback representment. The chargeback representment process is a way for merchants to challenge illegitimate chargebacks and restore both lost revenue, and their reputation.  


  • While it may seem like a time-consuming and costly venture, it’s much better than the alternative.  So why should you fight chargebacks? 


  • To recover lost revenue 


  • To prevent future fraudulent behavior 


  • To show the banks you’re not at fault  


  • Not fighting a chargeback is an automatic loss of revenue and even worse, could be seen as an admission of guilt by the banks. 


Check out our blog post Should You Invest in a Chargeback Team? for more insights.



Implement Chip Card Readers – Chip card technology has been a major success in preventing fraud. EMV chip readers are better suited for preventing criminals from using “skimmers” to replicate cardholder data and create false credit cards. Skimmers can be installed easily over existing payment terminals and are used to collect information from the cards used in transactions. Criminals can then use the data to create fake credit cards. 


  • Beginning in 2015, there was a liability shift and merchants who haven’t switched to a chip card are now liable for fraudulent card use. Previously, the issuing bank was liable. 


  • The shift has had a huge impact (as reported by Visa): 


  • Counterfeit fraud has dropped by 82% for merchants who completed the chip upgrade.  


  • Over 2.9 million merchants now accept chip cards, representing 63% of US storefronts. 


  • In March 2018, 97% of card-present Visa transactions involved EMV cards. 



Utilize Fraud Detection Technology – Fraud detection technology uses a combination of AI and data analysis, to determine whether a transaction is fraudulent. Because of the nature of AI, fraud detection tools are continually getting better at predicting fraud. 


  • Fraud scoring tools rely on data gathered during a transaction to predict the likelihood of fraud. Each transaction is given a score that represents how likely it is to be fraudulent and the merchant is then able to determine whether to proceed with the payment request 


  • Sertifi Advanced Fraud Tools assesses many data points including: Card Details, Name, Payer IP, Address, Email, Physical Address, Billing Address, User Device, AVS/CVV Verification, and more.  



Offer Alternative Payment Methods (virtual cards, Apple Pay, ACH, etc.) – By embracing the technology age, including alternative payments, merchants can offer their customers a better experience and reduce fraud.  


  • Local payment methods offer significant improvements in security since the merchant never sees the card information (they can only see a token). Whereas before, the merchant had full access to the card information including the PAN, and even stored it in their system.  


  • By offering local payments, liability for the merchant is effectively removed. Not only does this improve your security, but local payment methods can also serve to speed up the check-out process and boost customer satisfaction. Giving customers the freedom to pay how they want is more important than ever, and something they’ll expect as apps and features such as PayPal and Apple Pay become an everyday integration into people’s lives. 


Fraud is an urgent matter and is constantly evolving as fraudsters devise new ways to attack. 


If your business regularly processes online transactions, you need to have a strategy in place to help reduce fraud and build customer trust. 


Download our full guide, Understanding Payment Fraud and How You Can Mitigate Your Risk, to start building your fraud prevention strategy. 

About the Author 

As the Content Strategist at Sertifi, Kelli loves writing and the power of words to tell stories. She assists the team with content creation and occasionally dabbles in design. Outside the office, you can find her reading, traveling (mostly to Michigan), and buying too much stuff on Amazon.