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In recent months, there has been an influx of credit card scams in the
welding industry. It seems that every time we find a way to combat the
efforts of the dishonest trying to obtain free equipment, they seem to
resort to much bolder tactics. In this article, I will outline some scenarios
that may sound familiar to you as an owner or to your accounting staff.
I will also provide a list of best practices and resources in the event
that you find that your business may be at risk.
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The Relay Call
A relay call comes through with a person pretending to be deaf, thus needing
assistance in placing the order. This tool, which is intended to aid the
hearing impaired community, is being used as a buffer so that the perpetrator
cannot be tracked down when it is realized that they have used a stolen
credit card to pay for items that they want shipped either within the
United States or to other countries. This can result in the stolen card
holder calling his bank and requesting a chargeback for the items in question.
The Call-In with a Split Bill
This crafty individual actually places an order over the phone and requests
that you split the payment onto two separate credit cards. This should
be a huge red flag to all persons working the counter at all branch locations.
These cards are usually stolen and the perpetrator does not know the spending
limit, so they ask that you split the order to ensure that the card is
not declined.
The Internet Inquiry
This is one of my favorites. I am listed on the vendor list for GAWDA,
and even though I am not a welding equipment manufacturer, I get e-mail
requests for quotes on various welding equipment and supplies. The e-mails
also ask if I ship to remote locations. Clearly these blanket Internet
inquiries should be treated with caution. Out of curiosity, I responded
to the inquiry below. It was clear that there was a language barrier,
because the e-mail recipient was unable to answer any of my questions
pertaining to their company location, phone number, address, or any information
that would indicated that it was a legitimate business.
Hello Marketing Director,
I will like to place an order
for Welding Equipment from your company.kindly get back to me if you
have the welding equipment listed below..
Victor Journeyman Welding Equipment
Victor Journeyman Welding Equipment Cutting & Kits PartNumber 0384-2009
Quantities.... 10 Pieces
So kindly get back to me the
total cost and shipping cost via Fedex.I will be glad to get back to
me the total cost,so that i can forward you my credit card details for
the payment of the products.Thanks
Regards,
Jones Morgan
The Ship Across the Country
This should be a red flag because if someone is calling one of your branch
locations to place an order that they want shipped somewhere that they
could easily walk into another distributorship and buy off the floor,
why would they pay for shipping? These guys ask for a price and are willing
to pay whatever you quote them, even if it is at list pricing. Of course,
they want to pay with a credit card and will usually agree to pay shipping.
(Now, wouldn't it be great if all customers were so compliant???)
The Call-In and Pick-Up
This person will call in an order and give a credit card number for the
sale and then come pick up the merchandise. If they can come pick it up,
then they should be able to pay by swiping the card at the counter, NOT
prior to.
If you encounter anything that sounds like the examples above, here are
some tips that you can implement as policies at your branch locations:
- Ask for the CVV number. This is the Card Verification Value. It is
the three-digit number on the back of the card.
- Make sure that the shipping and billing addresses are the same. Use
the AVS (Address Verification System) function.
- Ask for the 800 number to the issuing bank and call it if you feel
that a customer is too vague or reluctant in providing proper billing
information.
- Call the customer's main office to validate a sale. Some former and
disgruntled employees who once had access to the company account to
obtain supplies may be trying to load their own arsenal for their own
business and leave you holding the bag. Don't assume that they have
permission to use a credit card; call to verify.
Communicate this to your branches, since these instances most likely
happen there, and it can be too late by the time the issue gets to corporate
accounting. Don't assume that just because a card gets an authorization
number, the sale will be legitimate. Get the proper information, and if
the customer is not willing to provide you with the details you ask for,
do not make the sale. It is a lot cheaper to turn down bad business than
to lose inventory.
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