Credit card fraud prevention questions

Get credit card fraud help: For victims of credit card fraud and identity theft, and those that can help.
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Credit card fraud prevention questions

Postby funktastic » Tue Nov 25, 2014 11:02 am

Hey guys,

First of all I'm new here so greetings to everyone!

I'm in the middle of launching a website that does jewelry rental, and the biggest concern I have is how to protect myself from fraudsters.

Basically, the site allows consumers to rent out fine fashion jewelry for a fee. Customers will choose the jewelry, go to check out, and pay with a credit card. Once I get that information, I will charge them their fee plus put a hold on their credit card. I'll match up their billing and shipping address as well.

1. Are these actions sufficient to safeguard me for the most part?
2. Am I missing out anythinge else?
3. What happens if a customer takes out jewelry and then cancels his or her card while I've put a hold on it?

Looking to learn more about this. Please let me know if I've posted in the wrong forum.


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Postby Vattené » Tue Nov 25, 2014 4:09 pm

I think your issue may be beyond the scope of this forum. I know we have some entrepreneurs so maybe some around here can help you (hopefully), but we're really just consumers with better-than-average knowledge of credit card products and credit scoring/reporting. You may need to go elsewhere (if you aren't already) for authoritative answers on how to handle these business risks. It's a lot to entrust to strangers on the internet :D

Best of luck with your endeavor!
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Postby Brad Bishop » Wed Nov 26, 2014 6:55 am

Not to get too far into it, but your security issues will be both the secure transfer of the customer data plus the secure storage of their data.

There are business out there who make it their business to do the transaction for you. What happens is that you have the cart building on your side and when the user goes to checkout they are handed off to a different site which handles the credit card transaction. This can be something as simple as PayPal or Amazon or some other 3rd party which will skin it all for you so it looks like your site.

For a small business, I think that's the way to go. It gets you out of the business of worrying about it and allows you to focus on what you're selling. Obviously you will pay a fee for this but that fee will be cheaper than having a security team to develop and maintain that on your side.

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Postby funktastic » Wed Nov 26, 2014 9:07 am

thanks guys! appreciate the feedback.

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Postby whit » Wed Nov 26, 2014 3:38 pm

first of all congratulations on the launching of website and expanding ur footprint!

second how long have you been in business? I ask this because I'm curious when you "rent" your jewelry to customers in store (if you've already been in biz) how would you retain that hold?

depending on how big of a scale you're doing this (something small that can be expanded on, always gonna be a side thing, full on income maker) and the risk tolerance (cos there's always gonna be risks)

I wouldn't necessary go with paypal or amazon check out

there are a few credit card processors out there that can fit your bill as a small biz, I particularly like Braintree but a lot of people seem to use square or heck, even quicken/quick books!

instead of putting a "hold" on the amount I would physically have the amount deducted from the account as it's a transaction and the checking out to have legal verbage so that the client knows technically while they're lending it, if it's lost than they're only entitled to a portion of a "refund" of the amount paid to rent--if the cost is less than the piece, if you're doing fine jewelry it likely is not..

also if the piece comes back damaged or need cleaning that is beyond what you would do in a few sec or minutes and so won't can also deduct that from the amount they were charged and only get a portion back see?

and since this transaction is legitimate, it's hard to dispute (with exception of Amex) because it's not fraud

so billing and shipping matching would be one of the safeguards to protect you from the person saying it wasn't them who rented it. provided you can prove you shipped it to the address.

you know, depending on the market you're after you may find yourself for the most part, without fraud, and just have to expect a certain percentage of lost pertaining to that *knock on wood* I would always advise to set aside a portion of the net sales to go in this account, kinda like setting aside money for taxes, and than at the end of the year if nothing happens to use that to reinvest in your biz and next year to start all over again

just my two cents

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